November test prep promotion and pricing strategy

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November test prep & tutoring promotional  strategy

As we approach the beginning of November, Test Prep & Tutoring demand will wane slightly for a week or so, resurface briefly and then, toward the beginning of December,  decrease along a somewhat predictable trajectory until after winter break.  The good news is that there are still plenty of people interested in test prep and tutoring at this point in the year. In fact, there are a couple of what I will call "micro-peaks" which surface at this time of year.  

Although the sales cycle becomes abbreviated due to the Thanksgiving holiday, we are still at a unique moment when market forces coalesce to provide opportunity.  The variables:    scores back  + changing SAT/ACT +  high school exams + Black Friday = Late Fall Demand.  

Larger companies anticipate this dynamic and will bombard the consumer base with a mix of products and offers designed to win market share ahead the January enrollment cycle (for March or April SAT/ACT).     Still, it is possible to compete and maybe even grow your share over the prior year through some deliberate positioning.  

The key for small test prep & tutoring companies is to recognize the playing field looks something like this to a larger firm:

• Total test prep market share for November available in November
• Key products for that group
• Important buying criteria to that group
• Total market share available for December and for January available in November
• Key products for that group
• Important buying criteria to that group
• Action step:  determine promotional mix that will afford greatest share of the above.

From this point forward, the buttons and levers available to the larger companies will probably involve a segmentation + incentive enrollment strategy.   Said differently, the market leaders will probably  leverage a commoditization position.   And let's face it--when it comes to having access to consumer buying trends  and then being able to  leveraging through a powerful marketing engine--big box test prep has nailed it.    

But this is as good thing.  How you ask?  Market forces like those described above generally increase consumer awareness and grow the overall market segment.  So, even though small firms may be outmatched by the big box folks, the net result is that the overall market has expanded and that means more opportunity for everyone. 

All of that having been said, an increase in market size or overall demand does not automatically confer a proportionate increase to each company.  But here are some ideas to help benchmark and improve over the prior year:

• Review prior year sales for a discrete time period.  Use that as a basic benchmarking tool.
• Use whatever empirical data or even just your intuition to define past consumers.
• Message  offerings that have the greatest appeal to that group but...
• Remember that the majority of consumers view Test Prep & Tutoring as a commodity and, as such, have begun to expect commodity-type promotional messages.  The usual suspects? Early-bird SAT sign-up incentives and Academic Subject tutoring in advance of exams).
• Try it yourself:  test  pricing incentives and value-add messages.   Remember to create urgency.
• Don't forget to promote.   The last thing one should do is expend the mental energy required to come up with a grand incentive plan and then just sit by the phone.  One needs to fold this approach into a marketing plan.
• Build a bridge to better practices in the future by measuring and noting the results.

Good luck!

Fall 2014 Tutoring & Test Prep Strategy | Event Calendar

Fall 2014 Tutoring & Test Prep Strategy  |  Event Calendar

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October  2014 Newsletter SAT/ACT Test Prep & Tutoring Strategy www.testprepprofessionals.com

FALL  STRATEGY  II With the confluence of  ACT, PSAT, and SAT test dates in October, combined with the fact that SAT Subject Tests are offered, and with impending changes to both the ACT and the SAT scheduled in the near future, test prep & tutoring concerns should be averaging about 15-25% more in gross revenue vs. prior year.  That is, unless this increase demand has been better anticipated by others.  Unfortunately, when the circumstances I have mentioned align, hyper-competition can ensue. Bigger companies diversify offerings to take advantage of heretofore un-leveraged products...think SAT regular, SAT short course,  and  something like:  SAT 1600 (and then multiply x2 to add online companion products).     Fast followers will match the bigger concerns--not so much with inspired strategy but with duplicate market messaging and hastily prepared product extensions.   And let's not forget that Khan Academy has begun  "democratizing" test prep. So the largest two or three companies combined with whatever large regional player exists in your geography will likely fight it out for the surplus share resulting this Fall.    As a result, even with an increased in total share available, it may be difficult for small or medium sized companies to carve out the revenue increases mentioned above. Many folks will be satisfied with increases vs. last year and, lets face it, most are so inundated at the moment, that gauging relative improvement vs. potential improvement will fall low on the list of things to do.  The good news is?  Performance can be measured in hindsight.  The better news is that there is still a great opportunity more fully leverage opportunity without getting too far afield from delivering one's service.  Here are some tips for this particular Fall: 1.  Know your strengths and define what you are good at and stay committed to those ideals BUT keep an open mind about diversifying products to match dynamic demand.  2.  Know your competition's strengths - visit web pages, view product lines.  This is just good business.  3.  Determine how to best leverage your product mix, pricing strategy, people, and promotional efforts and frequently ask yourself if you are doing so.  4.  Examine your lead - funnel ( this will help you empirically assess demand ).  You may be able to benefit by ramping up high yield,  low time-involved activities over the next four weeks.  If you have not, add a "chat feature" to your website, every inquiry is a potential client (we use OLARK...its free). 5.  Remember that consumer needs are extremely dynamic --particularly as the test dates draw nearer.  For example, two weeks prior to a test date is an ideal time for short courses, or small group single-subject tutoring (Math is pretty popular) etc.  Updating a Facebook page, email list, and current clients with a highly specialized product that matches consumer needs, costs very little and can teach one quite a bit about product diversification.  I kept things short because I know most folks reading this are probably tutoring from morning to night at this point in the cycle.  Feel free to visit our call to learn more about what has  been written here. www.testprepprofessionals.com. Warm regards, Kevin www.testprepprofessionals.com 617.285.4036

Positioning for the New SAT www.testprepprofessionals.com

The SAT is changing (again) The Collegeboard's recent announcement that the SAT will change in Spring of 2016 has created ripples throughout the test prep and tutoring world.  Collegeboard President, David Coleman, explained the changes during a press conference on March 5th.  One of the more intriguing topics involved the decision to enlist Khan Academy as the provider of free SAT preparation.   Many folks in the tutoring industry became rightfully concerned.  If Khan Academy provides free SAT test prep, what will happen to the for-profit tutoring and test prep companies? Although concern is an appropriate response to the issue, a viable alternative may be enthusiasm.  Why enthusiasm? Well for one thing, historically test changes create consumer anxiety and anxiety generally translates into opportunity for companies with the right mindset.  For example, although the SAT is changing, it is not changing for two years.  In the interim, the media hype around the test will create greater public awareness.   And greater public awareness will generate an increase in things like web hits, lead flow and call volume between now and Spring 2016.  Not to mention the fact that when a story like this is routinely carried by national media, it can turn into free PR. Another benefit from the announced changes includes the consumer segmentation between current 9th, 10th, and 11th graders.  Students in 10th and 11th will still see the current SAT.  On the other hand, 9th graders may be faced with a choice:  take a known test or try the new one.  In any case, consumer segmentation tends to help companies focus their marketing messages through more discrete targeting of  email, direct mail, SEO etc.   Said differently, there is both marketing momentum (from the media hype) and a market based consumer-segmentation event that should allow forward thinking business people to better target their messaging. Still not convinced?  Consider also that the ACT will likely benefit from the change (think New Coke and Pepsi).  The comparison is not ideal nor identical but it is likely that the ACT will extend its lead in overall test takers through at least the Spring of 2016.  The caveat here is that the ACT plans to offer both the traditional paper & pencil test as well as a digital version in  2015.  In my view, this is still an opportunity. You may be thinking, "okay, great, the next two years could be fine--even good-- but what about after that?!"  I'll answer your question with a question:  if you were a stockbroker and you knew two years in advance that the main stock in your portfolio, lets call it 80% of that portfolio, could be reduced to 0, what would you do?  Would you lean on other stocks in the portfolio?  Maybe reposition and lean on the next closest stock (ACT)?  Would you could look to expand your holdings of many smaller stocks (subject tutoring, SSAT, college admissions). There are myriad scenarios available but each is unique to the region and market in which you compete.  So what should you do? Given the timeline and the access to information, I would recommend considering the following: 1.  Become an expert in the New SAT.  On April 16th, when a sample version is released, learn it intimately. 2.  Be able to talk intelligently about the differences between the current SAT, the ACT, and the New SAT. 3.  Take an aggressive posture with events and informational campaigns in order to establish thought leadership. 4.  Decide which test will be the  main stock in your portfolio and begin developing or searching for updated curricula while also  investigating services that can digitize content. 5.  Look to reduce expenses.  This will insulate against a "worst case scenario."   Generally, rent and personnel fuel the expense engines of test prep & tutoring companies.  If your lease is coming up for renewal, renegotiate and take less space. 6.  Revisit the rationale behind service delivery.  If you have not ventured into online tutoring for example, start to explore its utility. 7.  Identify a new product or service that is closely associated to test prep & tutoring and build it out (going vertical). 8.  Segment your current successful offerings into additional product lines and try to expand the margin on those new products or services. 9.  No matter how you proceed, be transparent with your team and solicit their thoughts and opinions. Diversification, preparation, and expense reduction are key ideals when drastic changes occur to a market.  Although these are uncertain times for test prep & tutoring,  there is always great opportunity for those with the vision and the ability to execute. Warm regards, Kevin

Strategies to expand your test prep offerings      www.testprepprofessionals.com

Diversifying SAT/ACT Offerings in a cost effective way If one visits a major test prep company's website, one is likely to see a number of offerings beyond the standard tutoring packages or classroom course.  Lets look at the SAT since it is timely.  If we visit either of the two largest companies, we are likely to see:   1) The standard classroom course   2) some sort of intensive short course   3) standard tutoring package offerings   4) small group tutoring.   Moreover, we are likely to see each of the categories above segmented  even further into online and in - person options. I chose the word "segmented" by design because this sort of brand diversification is essentially known as a segmentation strategy.  Without going into too much detail, the general premise of segmentation strategy is that consumers span a continuum. What I mean by this is that some consumers want the standard classroom offering while others want face to face attention, and still others prize convenience over all else.  To expand even further, price sensitivity exists along the continuum as well.    Given these variables, there is a strategic benefit to crafting courses or offerings that match the varying needs along the consumer continuum.  Said differently, having more than one offering  is important in order to span the continuum.   The result is a series of different value propositions designed to meet varying consumer needs.   Large test prep and tutoring companies have the advantage of resources and are therefore well suited to employ this strategy in order to capture as much market share as possible. So, what can smaller concerns do to join in the fun?  Interestingly, small companies can be effective following an approach similar to that of the big guys.  Here are some general recommendations. 1)  For classes:  Take a good look at your curriculum and determine if you can reduce the content to some core offerings that could fit into an "intensive" format.  This may mean reducing 18 contact hours and 3 proctored tests to 8 contact hours and 2 tests.   Something like this could theoretically fit into aweekend only offering or a one week intensive class.  The price point could be reduced because the overhead expenses (room rental, instructor time etc.) are reduced. 2) For tutoring:  Consider small group offerings that target key parts of the curriculum.  Again, the overhead is reduced and the profitability enhanced because one tutor will have more than one student, therefore the margin of profit is essentially increased by a factor equal to the  number of students.  I would be remiss if I did not point out that it is good form to compensate your instructors  at an elevated level since they are on the hook for more work.  Also worth noting, small group tutoring is most effective when the group of students being  instructed has a similar set of  competencies. 3) For either:   Timing is important.  As the exam date draws nearer, the subset of students who have not adequately prepared grows larger.   This is an opportunity so be ready for it.  Marketing messages should focus on this subset of learners.  Don't forget to name your new offering;   names like"intensive,"  or "boot-camp,"  or "short course"  resonate well. 4) Expertise worth something:   Proctored exams with item-analysis feedback and teach-back sessions for a nominal fee have merit.  The expenses are typically reasonable (a room, a proctor, and maybe 2 hours of instruction 1 week later).   Most big companies will use this as a loss-leader (i.e. FREE)  to increase awareness and enter practice-test takers into their lead queue.  Still, the big companies cannot be everywhere. 5) Lastly, at some point having the ability to offer online products will reach a tipping point in our industry.  After a good deal of research, I have only been able to find one company that offers (SAT) white label supplemental programs for a reasonable price to test prep providers.  By reasonable I mean $80 - $100 per student for two to three online diagnostic tests, about 500 quiz questions, and complete video explanations.  You can access their site here  SAT Supplemental Online Offerings.  Scroll down the landing page to find out more. These are just some general ideas to consider.  The key take-away is that an existing product or curriculum can be segmented into a series of additional offerings or value propositions without adding a great deal of expense.

Discount strategy:  fill your SAT classes now www.testprepprofessionals.com

SAT Spring Discount Strategy If you're like me, you are probably being inundated by Cable/Satellite/FioS mailers and email campaigns.  Generally speaking, each company  is incentivizing consumers to sign up for their service.  Sometimes this can be a tangible incentive (I got a small flat screen TV some years back); other times it comes in the form of  things like "feature-based" messaging, price-locks, or discounts.   The ultimate goal for the purveyor of the incentive is to gain market share through a customer commitment.  These days Test Prep is no different.  Because Test Prep has become commoditized, Test Prep companies have become equally aggressive with incentives.  At this time of year  SAT Discounts are ubiquitous. Why now and why discounts?   Essentially, this boils down to capturing and keeping market share ahead of the June and October SAT Exams  (the two largest).  Since classes start in one form or another between now and the Fall exam, this time of year is ideal to fill classes as quickly and as efficiently as possible.  The fact that many consumers receive tax refunds in April-May does not hurt either. The major players in Test Prep will offer something like $100 Off for a defined period of time.  Discounting has become more nuanced with the advent of Social Media Marketing and Brand Communities.  Twenty-four hour discounts, or something similar, for Facebook Fans is a simplistic example.   But for our purposes, and on a more basic level, one can find post-cards and emails with $100 Off offers just about everywhere. Getting back to the main point about market share, selling two test dates vs. onecreates the potential for a better marketing ROI (return on investment).  On a more strategic level with regard to positioning for the October test, the more students one can enroll early in an enrollment cycle the greater the opportunity to fill classes, gain market share, and re-position for the late Summer offerings.  If I fill all my classes now, I can decide to add boot camps, weekend-only classes, or even late starts if demand dictates.    I can also capture revenue in the form of deposits and thereby increase cash flow which is never a bad thing. How have we gotten to this point?   The fact that there are few barriers to entry combined with the fact that many SAT course features are often seen as roughly equivalent are at least two forces driving the commoditization phenomenon.  This leads to a dynamic where differentiation is being fashioned through aggressive pricing strategies such as early or late discounts. So what can you do if your not one of the Big Test Prep concerns but have a good SAT course?   Simply put, nullify any perceived competitor advantage: 1) Make sure your features are as good as or better than the competition (think number of class hours and proctored exams). 2) Compete using a "convenience factor."  (think location, times, days of the week your classes are offered). 3) Determine your margin if you were to offer a discount.  If you have to sacrifice a % point or two to fill your classes earlier in the season and increase your cash flow, you may be pleasantly surprised with the overall volume of enrollments resulting from this tactic. 4) Look to current or past clients.  If you have an existing client base,  discounting becomes a bit easier implement and much more deliberate in nature. 5) Finally, and this is key, look to develop Hybrid Course Offerings through online classes, test questions, etc.  There is a least one company out there whose products are designed to empower smaller concerns (link provided above).    The purpose here is to compete more effectively with feature-laden courses. At the end of the day, the dynamic facing Test Prep and Tutoring providers boils down to a form of Game Theory: if one  can nullify a competitor's  advantages one has a better chance to compete on value and reputation.   Said differently, if features, access, and pricing are perceived to be equivalent, one can compete on the quality of the classroom experience.  Assuming you have a good course staffed by good instructors, consider a short term discount to grab some market share. Good Luck!

Grass-roots strategy for test prep and tutoring

Grass roots marketing strategy  for test prep and tutoring companies. Many tutoring organizations start out with the premise "if you build it, they will come." This approach is a great foundation for a referral based business--and that is terrific.  There is no better advertising than a referral from a satisfied customer.  Many of the folks we work with have grown into six digit entities by doing little more than providing excellent service and high quality tutors; this in turn generally creates excellent word of mouth and therefore referral business. Moreover, these concerns have had success extending their brand recognition by providing above average pay rates to their tutors.  After all, happy employees are the easiest to turn into brand ambassadors.  The result is a virtuous and self sustaining business. At a certain point though,  this business model plateaus--that is to say--year over year revenue growth settles between 1-3%...and this can become problematic.  Why? Primarily because 1-3% on the top line has to be able to cover any sort of annual increase in expenses if one is hoping to retain a profit margin similar to that from the previous year.    Confounding factors for such nominal growth include:  employee raises (typically between 1-3%)  and planned innovation or product development costs (sometimes well over 3%).  Since tutoring is quite dynamic, most companies seek to improve their product or services each year and the most successful companies tend to reinvest a portion of their profit in the direction of product development.  Hence, there is a need for the revenue, or top line growth, to align with the company's overall strategic growth plan. Although there are plenty of exceptionally good and cost effective ways to build brand awareness via things like Search Engine Optimization, E-mail marketing, and Social Media, these options often have a learning curve as well as a level of unfamiliarity that requires research and testing before one learns the best mix.   How then can you as the leader of a six digit tutoring concern have a more immediate and tangible impact on generating awareness and by implication revenue growth?  Simply put:  Grass Roots marketing.  Grass roots marketing is a low cost brand building approach.  It can be labor intensive but doesn't truly have to be if it is embraced by all in the organization and integrated into normal daily activities.   Before I go further, I feel compelled to admit that in this day and age grass roots marketing in and of itself may give you a timely lift, but it is not a panacea for true and sustained growth over time.   Think of it as a valuable tool for your marketing tool kit. Here are some low cost ideas that I have employed with good effect over the years: 1)  Postering - Posters (or fliers) build brand awareness and allow one the flexibility to match a particular message to the sales cycle.  Good places to poster include areas where decision makers frequent.   For Graduate School programs (ie--GRE, GMAT, LSAT, MCAT) college campus boards are the ticket.  For Pre-College (ie--PSAT, SAT, AP, ISEE, ACT etc.), Try guidance counselor office boards, local coffee shops, town squares, local book stores, local JCCs, YMCAs, Churches, Synagogues, and sometimes public libraries.  Use "Tear Offs" as you get closer to a class start or an event date.  Always seek permission from locations where there is not a clear understanding that postings are allowed. 2) Desk-tops or table tops-One can use the same template used for posters to desk-top.  Simply shrink to fit four copies to an 8 1/2 x 11 piece of paper.  Again, the theory is the same, place these in public areas, dining halls, coffee shops etc.  Be sure to maintain the area and clean up the left over papers by the end of each day. 3)  Targeted Canvasing-Canvasing can be hit or miss and essentially involves placing the same item mentioned in point #2 on the windshield of cars.  I would suggest using this primarily for Pre College programs and being careful to target your audience.  For example, if there is a College Admissions Night at a local high school the parking lot may be packed with your target audience.   The same rule as mentioned above applies: be a good marketing citizen and clean up any mess created as a result of your efforts.  Also, I would recommend using this tactic sparingly;  many people, including myself, are not big fans.  it has to be targeted and timely! 4)  Career Fairs and Parent Night Tabling-Tabling essentially means setting up a table with your items when you know a captive audience will be moving from one point of interests to the next.  Always have good copy (this goes for all tactics) and be sure to offer some sort of give-away at the table that will allow folks to fill out information cards.  These information cards will form a small but targeted lead list which can be inculcated into a mailing or emailing strategy.  Invest in a branded table-skirt if at all possible and arrange your items vertically to draw attention from passers buy. 5)  Events-Hold your own Free Events when possible at local venues including but not limited to  high schools and/or  college campuses.  One can use point #4 as a companion piece and collect information cards through an event as well.  Typical events include:  Free Practice Tests (and a follow up teach back), Admissions Time Line events, or a sample Test Question Workshop.  Have an expert on hand to deliver the key information. These are just some basic ideas and, I suspect, many folks are probably using at least some of them.  The key to maximizing their impact, though, involves consistency.  Any sort of ad-copy placed out in public is a symbol of your brand and should be updated regularly and maintained appropriately.   If you choose to supplement your other strategies with grass roots tactics, be sure that the messaging is complementary.  Said differently, something like an email blast should contain a message that matches whatever  grass roots messages are visible to the public. Good luck! For more information about marketing strategies contact us at info@testprepprofessionals.com or call us at  617-285-4036.

Are your tutors employees or subcontractors?

Are your tutors employees or subcontractors?

Steps to determine if your tutors are employees or subcontractors The IRS test often is termed the “right-to-control test” because each factor is designed to evaluate who controls how work is performed. Under IRS rules and common-law doctrine, independent contractors control the manner and means by which contracted services, products, or results are achieved. The more control a company exercises over how, when, where, and by whom work is performed, the more likely the workers are employees, not independent contractors.  There are 20 criteria the IRS uses to make a determination. A worker does not have to meet all 20 criteria to qualify as an employee or independent contractor, and no single factor is decisive in determining a worker's status. The individual circumstances of each case determine the weight IRS assigns different factors. NOTE: Employers uncertain about how to classify a worker can request an IRS determination by filing Form SS-8, “Determination of Employee Work Status for Purposes of Federal Employment Taxes and Income Tax Withholding.” However, some tax specialists caution that IRS usually classifies workers as employees whenever their status is not clear-cut. In addition, employers that request an IRS determination lose certain protections against liability for misclassification. The common law test  The common law test: IRS examiners use the 20-factor common law test to measure how much control you have over the worker. These factors are reflected on IRS Form SS-8, (this form can be downloaded at www.irs.gov)“Determination of Employee Work Status for Purposes of Federal Employment Taxes and Income Tax Withholding.” You can fill out the SS-8, including the facts of your relationship with the worker, and submit it to the IRS to get a determination of whether the worker is your employee or not. The reasonable basis test  The reasonable basis test is considered a “safe harbor.” That is, if you can show you had a reasonable basis for treating a worker as an independent contractor, the IRS is prohibited from reclassifying the worker as your employee either prospectively or retroactively. You have a reasonable basis for treating a worker as an independent if one or more of the following conditions exist: -A court ruling in favor of treating workers in similar circumstances as non-employees; -A ruling by the IRS (usually a Revenue Ruling) stating that similar workers are not employees subject to employment taxes; -An IRS Technical Advice Memorandum or Private Letter Ruling issued to your company, indicating that the particular worker isn't an employee; -A past IRS payroll audit that didn't find workers in similar positions at your company to be employees; or -A longstanding, widely recognized practice in your industry of treating similar workers as independent contractors. NOTE: The Treasury Inspector General for Tax Administration has recommended that IRS pursue legislative proposals that would mandate withholding of income taxes on payments made to independent contractors and require monthly estimated tax payments. TIGTA made these recommendations in order to curtail estimated tax payment To learn more visit www.testprepprofessionals.com