The Education Business Blog

Do you need to pick a target market when entering the education market? One of the true signs of a rookie is a business plan built on selling to all schools. Just because all schools should be using your widget doesn't mean they are ready to buy it.

Picking a target market is a discipline many people try to avoid - they don't like getting boxed in. Others don't understand just how big the education market is or think all schools are the same. If you are in love with your product you may resist the idea that some schools don't want it or don't need it.

Today we tackle issue #2 in our series on selling and marketing to educators. As a consultant in the education market I work with a wide range of businesses. This series covers the common execution errors I see with new executives and companies when they enter the market.

Part 1 is here.


Part 2. "Education" is not a target market - it's an industry.

Education is a vast enterprise. In almost every community the school system is one of the top 3 employers. Thats right - every community. In the US education is second only to defense in total spending.

A target market is a niche, an industry segment that is particularly friendly to your story and solution.

Picking a niche to target (which I've written about here and here) is not complicated. Schools vary widely in their infrastructure, politics, test scores, pedagogical preferences, and budgets. Your goal should be finding enough low hanging fruit to keep you busy as you build your business without overwhelming your capacity.

If you are selling education technology - find the schools that already have the infrastructure to run your product. Otherwise you have to first sell them a bunch of someone else's stuff.

If you have a hot new reading product find the schools with the lowest reading scores - they are motivated to look for something new.

If you are capital constrained limit yourself geographically to keep your costs down. Build out from there.

If you focus on a particular pedagogical philosophy the presence of similar or related products should be a green light.

You also want to make sure you go where the money is.

In many cases you will pick from all of these. Lets say you have a new reading intervention for middle schools. To keep your average sale high you might want to target large middle schools with bad test scores and funding to address it. If you are in Newark you may want to focus first on your home state to keep costs down.

How do you find the data to help you focus?

I use a tool called MarketView from MDR which makes it easy to ask questions like "how many middle schools in New Jersey are missing AYP and have more than 500 students?" The answer is 107. This is a critical number for business planning (market size, share projections, revenue projections, sale force capacity, etc.). I could also easily create a mailing list and a call list for a Rep from the results of this search.

Scholastic's QED division also has resources and services to help you answer these kinds of questions.

State DOE websites are a great source of data. For example California has lists that allow you to drill in deeply on test scores by school, district, or county.

These quantitative qualifiers are a starting point - you then start calling on these schools and asking the questions you can't get answered from a database (e.g. what pedagogical approaches do they favor?, is this issue a priority for them this year?, do they have complimentary products etc.). By narrowing the list and then qualifying further you spend the most precious asset wisely - your time.

You can do a lot of this yourself if you choose to - but in many cases a seasoned hand can shorten the distance between your product and the right customers. But please - no matter how you approach this question pick a market to focus on.

A side note - unless your product is specifically designed for private schools or the home school market don't prioritize them initially. They are relatively small and highly fragmented markets. Public schools are 90% of the opportunity. This isn't an editorial on the merits of either market - just a dollars and cents suggestion to maximize your investments of money and time.

School Sales & Marketing Series

Part 1. Obey the calendar. Schools buy on a regular schedule, design your business around it.

Part 2. "Education" is not a target market - it's an industry. No matter how great your product you need to pick a target market to focus on.

Part 3. This is a zero sum game. In order for you to win someone else has to lose.

Part 4. Teachers don't have the time to take the rough edges off your product. Teachers make or break a product.

Part 5. It's all about learning - mostly. You need to know the politics of selling to schools.

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Posted In: Data Driven Selling , K12 Publishing , Marketing Management

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Rookies in the education market make a set of common mistakes. There are five concepts you need to grasp about selling to schools that will help you avoid execution error as you enter the learning market. Consider these the iron laws of marketing to public schools. Accept them, nay embrace them, and your job will be easier.

In my consulting practice I go through these topics with almost all clients who are entering this market from other industries or countries. In this series I will post my thoughts on each of these rules and I welcome your comments and reactions. We will cover:

Part 1. Obey the calendar. Schools buy on a regular schedule, design your business around it.

Part 2. "Education" is not a target market - it's an industry. No matter how great your product you need to pick a target market to focus on.

Part 3. This is a zero sum game. In order for you to win someone else has to lose.

Part 4. Teachers don't have the time to take the rough edges off your product. Teachers make or break a product.

Part 5. It's all about learning - mostly. You need to know the politics of selling to schools.

It doesn't matter what you are selling - 60%-70% of your sales will come in the months of May-July. There are two reasons for this. First - most schools want to install, organize and train on new products during the summer when the kids are off. Introducing big changes during the school year is just too tough. Second, most school fiscal years go July-June. This means that they either have money left at the end of the year to spend in June or they are spending out of new budget authority in July.

This ebb and flow affects the entire business.

Sales - The fall season is spent generating prospects, during winter you demonstrate and write proposals, and spring is time to close the business. Deals do happen outside of this window (30%-40%) but they are spread over 75% of the year.

Product Development - In order to meet your goals you need to schedule product releases so that you can demonstrate them starting January 1 and ship them starting May 1. It may be necessary to pilot products starting Aug 1. If you are shipping an update it needs to be ready by May.

Marketing - Marketing works 2-3 months ahead of sales - creating awareness campaigns in the summer to run in the early fall, sales tools during the fall months, events during the winter months, and then planning for the next year in the spring.

Support - This group will always have a spike during the May-August time frame and it is useful to have a cadre of trained part-timers who can step in during these months to help with installation and training issues.

Finance - Your line of credit also needs to carry you through the lean months - make sure finance understands this.

I've worked in computer hardware, enterprise software, textbooks, supplemental materials, and education technology and they have all followed this schedule. You are not likely to be the exception to this rule.

In many ways this is similar to the retail world with their huge annual spike at Christmas. The good news is that with decent pipeline reporting you can usually tell several months ahead of time what your sales are likely to be. Budgets for education are set at the start of the year so there isn't the kind of economic uncertainty you find in retail. Most of the companies I've worked for were able to predict within 10% what their annual sales were going to be by the end of the 1st quarter (usually January).

Part 1 - Obey the Calendar
Part 2 - Education is not a target market - it is an industry
Part 3 - Education is a zero sum market

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Posted In: K12 Publishing , Marketing Management , Sales Management

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Piping hot education related blog topics served here! The debate over formative assessment, the top 10 sites for educational games, crowd-sourcing the next great novel, controversy around Microsoft's new ads, the relationship between quality and advertising, and a hilarious spoof of Politicians all get the nod this week.

Education Week has a very interesting article about Formative Assessment. Given the burgeoning mantra that formative assessment makes the biggest difference in outcomes it is revealing to see how little consensus there is on what it really is. Is it a practice or is it a product?

John Rice has a list of the top 10 sites for free EduGames. It is worth a peek and linking through to get a sense of what kids are actually playing. This should dispel the myth that EduGames need to rival commercial games in graphics and sound. What matters most is fun game play.

HarperCollins launches Authonomy. The site uses crowd-sourcing to allow readers to vote on the next best seller. Springwise has a quick overview - Publisher Hopes Crowds Will Spot Next Bestseller. I'm working on a similar project for a client in education - should be interesting.

Microsoft's new ads - love 'em or hate 'em? Seth Godin thinks they are rot that won't fix what is wrong - What Ads Can't Fix. His thesis is that the company has a solid business serving the stolid core of the market, and ads are not going to turn it into Apple. Ben McConnel believes they are a great opening salvo in redefining who Microsoft is by reclaiming the definition from Apple. As a bonus all the ads are in his post if you want to see them. In this debate you could substitute mainline textbook publishers and come up with largely the same analysis - both posts are worth a 2 minute read and some reflection.

As always Indexed nails her topic. This graphic about quality vs. advertising is amusing and revealing. We know this is how the education market works - one teacher tells another when they like something. I think of her wry charts as Mad Magazine for grownups. There is no connection to the link above about Microsoft. Really.

The Front Fell Off. Perhaps because we are dealing with a financial disaster this comedy skit resurfaced recently. It is a drop-dead funny take on a Politician evading the truth and trying to sound like they have a clue when they really don't. It is non-partisan so enjoy.

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Posted In: Culture , Education Technology , K12 Publishing , Marketing Management , Serious Games

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Education Channel Partner published a story I wrote about partnerships for companies that serve the education market. Whether you are a textbook publisher, an education technology developer, a fellow management consultant, or a reseller/dealer I hope you will find some useful ideas in the article. Think of it as Business Development 101 for education.

Too many partnerships fail because the partners didn't work through all the questions they needed to address individually and mutually. This article attempts to lay out a process for evaluating partnerships and a partnership taxonomy to help determine what kinds of partnerships are right for your company. It draws on my experiences at Apple, Chancery, Pearson, and Harcourt.

From the blurb:

Why do some partnerships succeed and others crash and burn? In profitable K-12 partnerships, companies carefully structure the relationship and know exactly what kind of partner they need. Here’s a guide to the elements of a successful partnership and a taxonomy of the kinds of K-12 business alliances out there.

I'm really pleased to be working with the team over at Education Channel Partner. Later this year they are publishing another article from me on data driven selling. That article expands and develops the ideas noted in this post from last spring - Data Driven Selling - Quick Start Guide.

Link to the full partnership article.

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Posted In: K12 Publishing , Marketing Management , Sales Management

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EdNet turned 20 this year. EdNet 2008 is happening right now in Boston. A huge congratulations goes out to the whole EdNet team for forging one of the required stops for the Educati. Nelson Heller, Vicki Bigham, Anne Wujcik and the rest of the team continue to put on an outstanding event year after year.

I've been attending since the early 90's and it is wonderful to see so many familiar faces and so many new ones every year. It is always a delicious tension to juggle attending sessions and spending time out in the hallway conducting business. More often than not business wins - but either way you come out ahead. You can learn valuable insights in the sessions or you can make valuable connections in the schmoozefest out by the coffee.

Ever since 9/11 EdNet has also been a somber reminder for me of the events that day. We were all in a general session when it happened and we retired en masse to the bar (not open) to watch in horror and sympathy as the grisly events unfolded. We could see the smoke at the Pentagon from our rooms in the hotel. I remember walking in the park a couple of days later and the unsettling silence because there were no planes weaving down the Potomac to National. Every 15 minutes a lone F18 would circle overhead.

No one could leave Washington and no one really wanted to conduct business. Strong bonds of friendship were forged in those days of waiting and grieving. The people who were there that week have a special place in my heart.

I'm hoping I attend in 20 years. I'm optimistic for the future - precisely because I've seen the impact that people like Nelson, Vicki, and Anne can have. Thanks.

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Posted In: K12 Publishing , Meta

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Barack Obama is proposing significant new investments in early childhood education. More attention has been focused on his drive to recruit an army of new teachers but I believe the early childhood focus is equally important.

Why? As students age the gap between low performers and even average performers gets so wide that it becomes much harder to bridge it. The chart below illustrates this concept.

[This chart is for illustrative purposes only]

In the early grades - K-3 - the focus is on acquiring basic skills in reading and math. As soon as the shift to applying those skills to learning other subjects occurs in 4th and 5th grade the gap begins to widen. By the time students have reached 7th grade it is often so great that only heroic efforts can help. When a student drops out in 10th grade the cause can be traced all the way back to 2nd grade or even Kindergarten. Obama's experience in the Chicago Public Schools taught him this lesson.

We can see this clearly in the product lines of the supplemental publishers. Their materials for the early grades are mostly targeted interventions, what a friend dubbed "workbookity" stuff. Their materials for secondary schools are comprehensive alternative textbooks. In secondary schools the gap has widened so far that you can't teach all students with the same textbook because the low performers simply can't read it.

Oral language is hard wired into humans but reading and writing are acquired skills - very similar to music in that practice helps enormously. Hence the focus on fluency in the National Reading Panel's report. By the time students reach the 6th grade students who read regularly have often read at least 1 million more words than students who do not. That makes a huge difference.

So targeting the early grades - when the gap can be closed quickly and easily - is an essential part of school reform. Yes - it will take 12 years to see the benefits - but they will be long lasting throughout the lives of the children who benefit. I believe Obama has got this issue right.

Does this mean that there is no hope for kids in the higher grades? Absolutely not. One of the reasons I'm so passionate about video games for learning is that the research out of Harvard and other universities who are studying this topic shows that it disproportionately benefits students in the lower third of performance and that the biggest benefits come in the middle school years. The Tabula Digita study out of Florida is only the latest in a string of studies suggesting that this one way to reach these kids. One other interesting finding - for every 2 hours that kids play game they spend an hour reading about them.

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Posted In: Culture , Education Technology , Policy , Serious Games

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As print and technology products in education blend together the distinctions between textbook publishers and ed-tech providers are blurring in some very interesting ways.

A recent report by the Pew Research Center for the People and the Press on how on-line and traditional news media are blending together raises some provocative questions for how this will play out in education.

Several years ago schools bought technology and print products from completely different budgets and with very different purchase processes. As educators have become more sophisticated about what technology can do and what it can't do they are demanding that providers blend the best of technology with the best of print.

We are already seeing this play out in how people consume news and the Pew study sheds some valuable light on this topic. Here are four big ideas that came out of it for me.

1. The Integrators - the 23% of the population who are actively using traditional and new media - tend to be affluent, highly educated, and middle aged. They grew up with traditional media and are comfortable with it, but due to their interest in politics and sports are using on-line media to dig deeper and in more personalized ways than the general public. This group corresponds to the teaching corps in this country. If you want to sell instructional products to schools teachers are the gatekeepers - if they won't use it in their classroom you have no sustainable business. To reach their comfort zone you will need to blend the old and the new.

2. Net-Newsers - this is the most affluent and best educated group but also the youngest. 30% of them watch news clips on the web - only 18% of them watch the evening news on TV. They also are the heaviest consumers of news - digging in all day long. This group corresponds to students. While you may produce blended products in order to sell to teachers you need to make your on-line offerings rich enough to satisfy the younger users - it will be their primary interface to the content.

3. The use of print will decline - but not go away. The numbers in the report about newspaper usage are a wake up call to textbook publishers. In 1993 58% of the population read the paper daily, by 2008 this was down to 34%. Nightly network news saw an even greater drop - it went from 60% down to 29%. Meanwhile on-line went from 0% in 1993 to 37% in 2008.

The pied pipers of ed-tech who sing sweet songs about the end of print are going to have a wait a long time for that to happen. But - I do believe that just as newspapers and magazines are getting thinner and thinner our textbooks will slim down as more of the content moves on-line. The rise of the Kindle and other reading devices may also spark an evolution in how we consume "print" in the same way the youTube is changing how we consume video.

4. Politics and sports are a key drivers of on-line usage. Both the Integrators and the Net-Newsers valued the on-line tools for the insights into politics and sports. Social studies is probably the area where having on-line content that changes on a daily or weekly basis has the most value. Districts that want to bring parents into their own web resources might stress school sports - something that not even the most dedicated local paper can do for every school in their area.

Publishers can learn valuable lessons about how this transition is likely to play out in schools by watching what has happened in the news arena. This study is worth a look if you are interested in this topic.

Related Posts

Textbooks vs. Education Technology - Clash of Paradigms
The Future of Education Publishing
Web 2.0 and Education Publishing
Open Source and Education

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Posted In: Culture , Education Technology , K12 Publishing

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Hot sizzling education publishing and ed-tech related links here! Obama's call for more teachers, kids media preferences, 2.0 de jour, and assessing 21st Century skills all get a nod in a short week.

Eduflack talks about Obama's call for an army of teachers. I confess that I worry about federalizing education too much, we don't need more Reading First scandals. Having 50 laboratories is better than 1. Another wag noted a contradiction on the right - if the free market knows best and if education is the foundation for economic growth why aren't conservatives fighting to pay teachers more? That would bring higher quality candidates into the profession via market forces.

Kids 10-14 prefer the internet to TV. AHCI Lunch has commentary on a New York Times article that revealed this finding about teens media preferences. Here is my question - why didn't TV take off in the classroom given the power it holds over our culture? One of the core arguments about why internet tools, social media, and virtual worlds should be in classrooms is that they are where the kids already are. The same could be said for TV at any time in the last 50 years.

I believe the reason on-line tools will take off is that TV is passive while the internet and social media are interactive and social. TV is a baby sitter, the internet is a tutor. But it could be that there are larger institutional barriers to technology diffusion in the classroom that we can learn about from TV's failure to penetrate deeply into teaching and learning.

Web 2.0 vs. Enterprise 2.0? Elearnspace does a nice job of mapping out the differences and talking about what it means for learning. K12 Education is most definitely in the Enterprise 2.0 camp which has implications for the kinds of products that need to be built and the speed at which they will be adopted.

Will Richardson has some great comments about Assessing Network Building and how critical this 21st Century skill is. It is related to the observations I've made about homing - the ability to vector in on the most important information in a sea of data. If you know of anyone doing interesting work on assessment in these areas post a comment. I've seen a lot of talk, but very little in the way of real solutions or products.

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Posted In: Culture , Education Technology , K12 Publishing

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