SAT business is booming but the tipping point for the test optional movement may be close
Business is good thanks to the New SAT and its impending release in March 2016. Our surveying suggests demand from students prepping for the current SAT as well as the ACT (but mostly the current SAT) is driving revenue increases between 18%-35%. The good news is that the demand is likely to persist for several months. It will probably be a good idea to take a breath and plan strategically as growth slows. Some earlier thoughts that may help with planning can be referenced through these blogs: March 2014, September 2014, February 2015,
Although business has been exceptionally good, the horizon is visible. ACT and The College Board seem to be waging state-by-state battles for test supremacy yet many colleges are dropping the SAT and ACT from their entrance requirements. In fact, this past week The Washington Post reported that "since 2014, a slow and steady trend has developed where more schools are adopting a test optional policy" (the most recent being with George Washington University). A complete list is available here. We don't think the test optional movement is foregone or even a bad thing. The Khan/CB partnership has already begun to transform the business environment for test prep & tutoring companies. The interesting thing about the evolution of the College Board's business model is the fact that more students are likely to join the prep community as a result of the free materials. This will generate more user data. That data, in turn, could become even more valuable to test providers than the tests themselves. But that is probably not great news for test prep & tutoring--unless we can somehow adapt and thrive as a result of this change to the environment. In evolutionary theory change is neither good nor bad it is simply change. The way in which a species deals with change often reflects its level of future success. In the world of business, good companies anticipate change and spend time determining how to benefit. For this reason, we believe it is important to diversify products, align expenses to revenue drivers, and to draft 3, 6, and 12 months plans. Or, to extend the evolution metaphor: generalize, conserve, and adapt. Setting time aside to plan prior to Back to School or post the October SAT makes sense for a planning period. If you are a glutton for punishment, take a look at our SAT/ACT Business Positioning Presentation from the June 2015 Education Industry Association's EDVentures Summit. Here are some tools which you may have seen before...but just in case: SAT:
ACT:
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