Make More Money This Fall!
Some schools are statistically better prospects.
Jun 22, 2022
By Bob Stimolo
SMRI’s quarterly survey of school marketers clearly demonstrates a strong market comeback. The 2022-23 school year should be a strong one for those who provide materials and services for schools and educators.
Knowing which schools are likely to have the most discretionary funds remains a critical factor in the success of your marketing programs. Our education list providers offer numerous selection criteria for both postal and email lists. The key to success is in finding which criteria have the strongest relationship to sales. The best way to accomplish this is through regression analysis, often referred to as modeling.
Invest in Tools to Improve Your Targeting
Regression analysis allows you to use information about your best customer schools in order to identify those prospect schools that have similar characteristics. A modeler compares your sales data against the various fields in an education database. Those fields of data found to have a statistically significant relationship to your sales receive a score based on the strength of the relationship. Each school receives a score and then all schools are ranked from highest score to lowest. This ranking is divided into tenths called deciles.
Often we find that the top 3 deciles, or the top 30% of the schools, are providing 60% of the revenue, or more. Conversely, the bottom three deciles often provide 20% of the revenue or less. The advantage to having a marketing tool such as this is that we can focus our marketing investment where we get the greatest return. We can invest more in the top deciles and less (if any) in the bottom deciles.
Not All Schools are Equally Promising Targets
In spite of the fact that the education market is on the upswing, there still exists significant inequality between schools. Schools in more affluent communities have more money to spend on supplemental materials, supplies, and facilities. Schools in poorer communities do not.
Regression models do not make sense for everyone. Companies with smaller marketing budgets should consider a less expensive marketing tool such as a match. A match identifies which schools in a rental database contain your customers. It allows you to promote to prospects who are in your customer schools. These prospects will outperform prospects in schools where you do not have customers.
Models and Matches Pay for Themselves
A model costs about $7,500 and is good for 2 years. If you mail twice each year, the annualized cost is $1,875 per mailing. If you mail a catalog at a cost of $.70 each, you need only identify 2,678 records in each of four mailings that are not worth mailing to in order to recover your investment. If you mail 50,000 catalogs each time, that represents 5 percent of your list.
The cost of a match can be as low as $2,250. It is typically redone each year. If you mail twice each year, the cost is $1,125 per mailing. It enables you to mail prospects in schools that buy from you in addition to or in lieu of prospects in schools that have not bought from you. A prospect in a school where someone else is a customer is more likely to buy from you than a prospect in a school where no one has purchased from you.
Far Superior to Selection Criteria Available on Education Databases
These marketing tools – models and matches – are far superior to the selection criteria available on education databases. Many education databases offer more than one hundred different selection criteria, but none of those criteria are based on your sales experience.
A model identifies schools that are similar to your customer schools based on statistical significance. A match allows you to increase the mail into your customer schools. Both of these processes are more likely to result in sales increases than any combination of “off the shelf” selections offered by list compilers.
SMRI manages both the modeling and matching process for several school marketers. We have been working with these marketing tools for decades. Please email me at email@example.com to arrange a conference call about how these tools can help you start making more money this fall. There is no fee to have this discussion.
Bob is EDmarket’s Official School Market Consultant and president of School Market Research Institute, a full-service direct marketing agency. Learn how you can target educator’s most likely to purchase based on our years of research. Contact Bob at firstname.lastname@example.org. Portions of this article first appeared in Essentials.