In recent years, supplemental education franchises have gained traction and are poised for major expansion in the next five years as parents continue to invest in education for their children.
From 2014 to 2019, industry revenue is forecasted to rise at an average annual rate of 4.0% to $2.1 billion; this includes expected revenue gains of 4.2% during 2015.
Given that parents are concerned about the quality of education their children receive, industry operators typically keep facilities relatively small, ensuring that children receive personal attention from instructors.
As a result, to meet growing demand, the number of facilities is projected to grow at an average of 4.1% per year to 2,892 in 2019.
Companies that offer preschoolers a head start and tutoring services that help high-schoolers boost SAT scores will continue to perform well, but it’s the STEM (science, technology, engineering and math) focused franchises, such as Bricks 4 Kidz and Primrose Schools, that are showing the fastest growth in this category.
As these child-education franchises continue their expansion and growth efforts, they need to start looking at the value of customer analytics and the role that this data can play in their site selection process.
If you look at the education franchises that are leading the pack, they have one major advantage over most businesses…they collect customer data.
The Educated Franchisor
If you have read many of the blogs on this site, you certainly know how important it is for a business to collect customer data.
While many education businesses collect information from almost 100% of their customers, the data is used mostly to track student progress and notify parents. However, these businesses are quickly seeing that this data can also create the solid foundation of a predictive model for site selection and strategic growth planning.
Some would say that quality education is a basic necessity and therefore everyone with kids is a potential customer, so why use data and analytics?
The quick answer to that is best illustrated with an example: eating is a basic necessity, yet hundreds of restaurants have and continue to identify who their customers are and where they live because every consumer has his or her own individual preferences.
So even though a business might think that anyone with money is a potential customer, the bottom line is that they are not.
There are certain segments of the population that have a greater propensity to spend money at a learning center, and each brand of learning center appeals to slightly different segments of the population.
Being able to differentiate between the households that are more likely to use tutoring services for elementary-age children and those who would use it for high school students or even for SAT/ACT prep classes is valuable.
It can aid in picking site locations as well as in direct marketing efforts.
The other benefit is that as franchises develop modeling solutions for site selection, their brand begins to grow by continually opening above-average performing locations and not having to invest time and money into the ones that struggle.
With this data they are able to paint a picture of success to a potential franchisee, thus expanding the brand.
The value of customer data cannot be stressed enough – using that data to understand who your customers are and where they live will propel you beyond the competition.
Buxton gives franchisors the tools they need to truly define and locate their target audience while giving them the ability to make informed, data-driven decisions for site selection, marketing strategies and territory development. Explore your analytic solution options with us today.