A white paper released today by a UK-based provider of information systems has shown that the global financial crisis may have had more of an impact on white-collar and managerial professions – typical independent school buyers – than previously thought.
The summary from the CACI document Consumer Reactions to the Recession suggests that while the slight recovery in the market for new mortgages this year has been biased towards socio-geodemographic neighbourhoods where homeowners tend to have higher salaries and greater equity in their homes, a number of conclusions have been reached that could negatively impact on independent schools’ marketing potential:
- “Unemployment has doubled but managerial employment has quadrupled”. The report found that the number of Job Seekers Allowance (JSA) claimants based in neighbourhoods classified as 1A (using CACI’s Acorn profiling system – the same system used in mtmconsulting’s MANDARIN school catchment area analysis research) increased by a ratio of over two times, from making up around 0.8% of JSA claimants in September ’08 to around 1.8% in September ’09. mtm’s school market analysis - MANDARIN – invariably illustrates that schools’ pupil bases are dominated by families living in 1A households.
- The report also showed that other core independent school markets: 1B, 1C, 2D and 3H experienced the next highest relative increases in numbers of JSA claimants.
- A map showing the highest increase in managers and professionals claiming JSA clearly shows the worst-hit areas to be London, South of London, the South-West, the West Midlands and the North-West, all areas with large numbers of independent schools.
Chart showing increase in JSA claimants by ACORN group. Copyright CACI 2009.
The impact of this could be significant for independent school business strategies. The report suggests that “since in these areas unemployment was traditionally very low the change may feel more dramatic and have a greater impact on attitudes and therefore on spending.”
To take this suggestion to its logical conclusion for schools, there will be a greater need for all independent schools to clearly reassert their value and benefits in order to attract new parents, to keep fee increases to a minimum in order to avoid alienating existing parents, and to control costs as much as posible in core areas to add value elsewhere. mtm’s Independent Education Sector Report 2010 supports this notion, stating that “we expect that teaching costs will have to be reduced in the coming years.”
Of course, all independent schools’ marketplaces are hugely different, but this paper clearly shows that school marketing teams must ensure they send out the right messages to prospective and current parents in order to maintain strong pupil recruitment in coming years.
mtmconsulting’s Mandarin uses sophisticated analysis to thoroughly explore school catchment areas. Using a school’s parental body’s postcodes we profile their buyers using Acorn and Paycheck systems. We then assess the number of families in the catchment area matching these profiles, with school-age children, and use this to illustrate the areas of best potential for pupil recruitment alongside competitor schools’ influence mapping and changes in population over the coming years.
Please click here to download the full CACI white-paper Consumer Reactions to the Recession
Information on mtm’s Independent Education Sector Report 2010 is available here.
To discuss how mtmconsulting’s Mandarin schools’ market analysis can help your school please contact us.
