"Do Your Suppliers Know Their Market?" By William L. Bainbridge. School and College. June 1994.

DO YOUR SUPPLIERS KNOW THEIR MARKET?

By William L. Bainbridge, Ph.D.
President & CEO, SchoolMatch

The marketing representative stood at the schoolhouse door and told his colleague, "This is a frustrating assignment because schools and colleges are cheap and rarely buy first quality products." They marched into the business manager's office carrying this negative attitude, and failed to notice the Xerox copiers, Bigelow carpet, IBM and Apple computers, GE lights, Bluebird buses, Marriott maintenance crew, Best locks, Service America meals, Pitney Bowes mailing systems and other well known brand name products and services. They also failed to understand that schools and colleges very rarely present businesses with a "collection problem" and are less likely than may other customers to go out of business.

We at SchoolMatch have spent a decade serving as a bridge between organized education and the vendors who sell billions of dollars of products and services throughout the school market. Prior to that, my colleagues and I were on the other side of the table serving as administrators in school and college leadership positions. We have conducted studies, organized training and provided comparative data to many companies interested in the education market. The above anecdote, regretfully, appears to be repeated countless times everyday. Such negative attitudes serve neither the school nor business supplier well.

One observation seems to hold true. Most decision-makers in the education purchasing arena have very little experience in business. Many of them have come "up" through the ranks with their roots in preparing and presenting curricula to students. Conversely, most representatives of firms serving the school market have no background as educators. Their experience with schools dates back to their days as students or comes from years in the school sales trenches.

When businesses select sales representatives for "the finance industry," they often hire individuals with backgrounds in banking or accounting. In the pharmaceutical industry, they find biology or "pre-med" majors with an interest in sales. Major construction companies look for experience in the building trades or engineering. On the other hand, many firms seem to believe that since everyone has been to school they automatically know "the education market". Such strategy misses the mark.

The variety of product and service selection approaches in schools and colleges varies nearly as much as the number of educational institutions. In some schools and colleges purchasing is centralized, while in others decisions are made by departments and faculties. Sometimes the key person is a specialist such as a purchasing agent, business manager or facility supervisor. It is often difficult to identify the real decision-maker. Influencers include end-users, financial managers and pressure groups. The motives are not always rational and the purchasing workflow is frequently horizontal rather than "top-down". Some individuals who appear to be decision-makers are really just gatekeepers.

More so perhaps than in the private sector, factors that influence decisions tend to change mid-project. The formal authority for decision-making is frequently at a much higher level than is practical. Many high paid administrators don't have the authority to purchase a pencil without a business official's blessing. Buying is often a service function - the purchasing agent may have less influence than the architect, treasurer, attorney, dietician, department head, athletic director, engineer or consultant working on a project.

Regretfully, many myths about the education market hamper communications and service from some school vendors. Some don't understand the enormity of the market. For example, there are probably more school and college roofs in need of repair, meals to be served, grounds to be tended, books to be purchased and passenger miles to be ridden than in any other single market. The potential for repeat sales is great, and the power of referrals is substantial. Underestimating the market size and profitability sometimes make education the same stepchild to a supplier that the "education beat" can be to journalists.

Factors influencing buying decisions in schools and universities are frequently quite different from those in large or small private sector businesses. For example, most educational institutions plan to keep their buildings for many years. In such an environment, extending a long-term warranty may be more valuable than sharpening the pencil on price. Administrators are not so pressed, normally, as their business sector counterparts to look at the bottom line on a quarterly basis. The long-term good of the institution is frequently a saleable argument in a setting where internal, external, political and public pressure can be intense. Timing can be everything in an organization with multiple decision-makers including board members, trustees, commissioners and alumni.

Educational administrators, not unlike other individuals, respond differently to the plethora of marketing strategies available. With some, direct mail is valuable while with others it goes in the "circular file". A few respond favorably to telemarketing, while most are tough to reach. Advertising can be extremely powerful in terms of demonstrating a long-term commitment to education. Combined with endorsements, presence at conventions and workshops, a well developed ad can create the right image. School and college administrators need consultative sales people to assist in solving problems. Astute educational leaders, as they become sensitive to the business of education, are learning to manage these suppliers.

Schools deserve first class treatment from suppliers. They can be excellent, long-term customers and clients. While there does exist a distrust of sales people and a "pilot-test" mentality, each institution offers a committed supplier unique opportunities which frequently go unexplored.

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Dr. Bainbridge heads SchoolMatch, a Columbus, OH, research firm assisting corporations with school data and consulting services.