990s Don't Lie
The Real Competitive Analysis
If you work in higher ed marketing, you no doubt have been the recipient of a late-night email from leadership with some emerging - and often unfounded - fear about the competition.
Whether it was sparked by some unexpected airport advertising or a nearby neighboring billboard buy, concerns about the competition tend to come in waves in our space.
And while I do think there is a lot we can learn from tracking the competition, it’s important we don’t inadvertently find ourselves following them, especially when we may not have the full picture about how well they are - or aren’t - actually doing.
Understanding Competitive Indicators
While new creative in market is a common source of concern when it comes to the competition, the truth is, we shouldn’t be as concerned with what the competition is doing, as much as we should be concerned with how well what they’re doing is actually working.
So that means when it comes to competitive analysis, it’s a rare area in marketing where we should be just as concerned about lagging indicators (applications, enrollments, revenue, net profit, etc.), as we are about leading ones (program offerings, creative in market, marketing spend, etc.).
Because if we focus only on in-market activities, it’s entirely possible we could find ourselves following a competitor who actually isn’t doing that well in the first place.
So how do we actually understand how our competition is actually doing?
What 990s Can Tell Us About The Competition
990s are an IRS form that tax-exempt organizations - including nonprofit colleges and universities - are required to provide to the government, which includes information related to revenue, expenses, assets, and liabilities.
The information provided on the 990 form can paint a pretty clear picture on how an organization is actually doing, not from an in-market perspective, but rather from a point of actual profitability.
And thanks to ProPublica’s Nonprofit Explorer tool, you can search your own competitors to review their actual 990 filings and learn how much they’re spending each year, how profitable they actually are, and even how much their top employees are getting paid.
When you combine that information with the already-publicly-available IPEDs information related to tuition, application volume, enrollment, retention, and more - which is well organized and visualized by Deloitte’s DataUSA website - we can start to get a true picture about how well - or not - our competitors are actually doing.
A Case & Point
Here’s a quick example of how the above information can be helpful…
Recently, someone brought up a mid-sized online institution and mentioned that they seemed to “be everywhere” lately, referring to how much they’d been spending in marketing.
By pulling their 990, I was able to see that they ran roughly a -10% loss in 2021 and a -5% loss in 2022. They had increased their marketing spend - which appeared to be funded by tapping their endowment - and the result (as seen via DataUSA) was that despite the increased investment their enrollments were actually flat.
When I shared this information - that this organization was losing millions of dollars a year to stay flat - suddenly the conversation shifted from being concerned about the competitor to being concerned for the competitor.
Final Thoughts
So the next time you get that late night email concerned about perceived progress from a competitor, take a minute to dig into their 990 and then search their performance data across DataUSA.
It’s entirely possible that there is a lot to be concerned about, but before we get ahead of ourselves lets be sure to not just worry about promotion, but actual profit; so do yourself a favor and do a little digging - and be sure to bring your leadership along.
About The Author
Seth is the founder and CEO of Kanahoma, a San Diego-based performance marketing agency on a mission to build a better agency for organizations building a better world.
You can learn more about who we are and what we do at www.Kanahoma.com.