December: Customers Will Pay for Great “Experiences”

I love visiting with schools, and participating in some lively discussions about how the rising cost of tuition has affected their enrollment, making it more and more difficult to survive from one year to the next.

Then I ask the “wicked” (to use an adjective from the New England area of our country) question: “How are your development efforts faring?” The answer usually starts out with, “Well, it’s getting more and more difficult to fundraise too, so we’re looking at new fundraisers with the hope that they’ll be more successful.”

Unfortunately, that’s not an answer to the question I asked.

That’s been a continuing trend – ask a question, and there’s not a direct answer, but the answer conveys something about the answerer’s mindset.

As for the answer proffered, hope is indeed one of the three things that lasts, but it’s not a strategy to get you from the place you are to the place you want to be. It’s just like those people who keep hoping the lottery scratch-off ticket will be a big winner and solve all their monetary problems.

The other common answer is, “We charge a development fee to those parents who don’t want to participate in the fundraising that needs to be done.”

And that further blurs the line between the definitions of “fundraising” and “development,” especially in the minds of the parents.

As a parent of children who attended Catholic school a number of years ago, I hated the thought of having to ask family, friends, neighbors and coworkers to buy candy for Christmas and Easter, or wrapping paper, cookie dough or magazines. At the time, we didn’t have a lot of money to spare, and the community in which we lived didn’t have a lot of money to spare either.

Then I was exposed to Development. It’s “The meaningful engagement of people in the mission of your organization” as one Development professional calls it.

Note that it isn’t all about the money. It’s about “engaging” people.

Development is about “relationships” and, more precisely, the depth of the “relationship.” The deeper the relationship, the more committed individuals become, and the more they are willing to share their gifts of time, talent and treasure. Further, a “relationship” mindset invites and introduces others, and it’s by the connections created that the community develops, which can lead to significant gifts from those who want to see your school’s work thrive from those who have the means to support it.

And frankly, if you’re looking at why things aren’t working at your school, the root of the problem is probably in the “connections” that create functional systems within your school.

When you expect parents to fundraise by selling “stuff” for your school, you’re putting them in the predicament of not just paying tuition, but also may expose them to tax liabilities, since if they raise money that is a direct benefit to their child and their family, that may be considered to be “taxable income.” (Consult your tax advisor about the potential ramifications.)

Fundraising is important – but events, not sales of products, are what not only raise dollars for the school, but also requires the parent community to work together for a common goal. Strengthening the parent community fosters student retention, which drives word of mouth marketing, which serves to increase enrollment. Here’s where it gets interesting – events need to be enjoyable, to the point that they provide a great “experience” not only for those attending the event, but for those working it as well.

The parents of the children enrolled in your school are “customers.” In any publication that speaks to improving customer satisfaction today, it’s the “customer experience” that is paramount to improving a company’s bottom line. In the case of the business, that means more profit for the company. In the case of your school, that means being able to increase salaries to pay teachers an appropriate wage, to implement technology within the curriculum to foster collaboration and research, to improve the surroundings and atmosphere of the physical plant, to innovate by creating new programs and activities that will attract new parents to your school, and inspire constituencies with a five-year strategic plan that will move the school toward the vision you have for it. The Five I’s make it easy to remember: Increase. Implement. Improve. Innovate. Inspire.

If you’re a school leader, and you’re thinking that’s going to take a lot of work, especially when parents aren’t currently paying their tuition, you’re absolutely right.

So let’s take a look at why parents don’t pay their tuition. There are really only 3 reasons: they forgot, they can’t, or they won’t because of other priorities.

If they forgot, your school should be using a tuition management/fee billing partner that puts you in control of the process, allowing you provide whatever ministry is necessary to accommodate their needs. I’ve talked with school leaders that are changing to a particular system because “they’re paying for it anyway,” or they’re proving some significant price reductions to the school or it’s parents. While those things are nice, you really need to do your due diligence, since the bottom line is finances. If a parent asks you to change their payment date, and you don’t have the ability to do that, you need to call someone, or submit a request and someone will get back to you, that’s not what parents today are expecting. If you’re not in control of the process (such as using a company that charges a punitive late or follow-up fee which the company keeps, even if the parents have paid their obligation on time), that could be a reason why your parent community’s experience of your school is not a positive one. When it comes to tuition processing issues, many times parents won’t tell you about it; they’ll simply leave.

If they can’t pay, perhaps they require additional financial aid because of an unforeseen life event – a parent is laid off from their job, or their spouse is diagnosed with a serious illness. Or, as I’ve heard in a number of schools, parents tell school leaders they don’t have any money and can’t afford to pay ANYTHING for tuition. This is where you need 2 things: a partner to determine a family’s financial need, but also a person responsible for securing development revenue for need-based financial aid and scholarships. They work hand-in-hand.

If your school “can’t afford” a person like that, you’ve now identified the real issue. If you’re a principal of a school, and the board says, “That’s part of your job,” then you have a decision to make, especially if you became a principal as a way to be a “principal teacher.” The principal’s position today is akin to the CEO of a small business…not the first line of defense for a teacher that calls in sick.

If parents WON’T pay because of their other priorities, that’s where things become problematic. Every school leader has a story about a parent who asked to be patient with them in the payment of tuition, and saw them drive to the school in a new vehicle, or then asks that the child be excused from school for a week so they can go to a popular vacation destination in Central Florida or on a cruise.

Rather than jumping to judgment regarding these families, realize that families will pay for – here’s that word again – “experiences.” The vacation or a cruise is not simply “a vacation” anymore. It’s an experience. Driving a new vehicle is an “experience” as well – especially if their previous car was 13 years old with 168,000 miles, failed to pass state inspection, and this is the first time a family is faced with a monthly car payment in quite some time.

Think of it this way – when parents of prospective children visit your school for the first time, do they “Ooh” and “Ahh” in excitement, or do they “Eww” and “Aww” when they’re seeing what you have to offer? Their “experience” of your school must be one of excitement, especially since they’re going to entrust their child to you for a significant part of their young life, as well as pay for the privilege of doing so.

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