Tuesday, February 16, 2010

Reading more than is there

Sometimes you can read between the lines and get something others might miss.

I got a call the other day from someone I had advised a few years back. They had just read an article in the Wall Street Journal (Feb 2) entitled “Funding for Education Would Get a 9% Increase.” The article came with a chart of “Winners and losers” in the federal budget (the federal agency winners and losers).

The call was in reference to the increase in the Education budget and my friend wanted to know how much more they should focus on the Department of Education and the education market in general.

The article focused on the Obama plan to revise the Bush “No Child Left Behind” program, which has operated with very mixed reviews since its inception. This means the money would be going out in the form of grants to local jurisdictions predicated on meeting some new criteria (not germane to our discussion).

So I asked my friend these questions:

· How much of your business is the education segment?
· How many of the 13,506 school districts do you currently sell to?
· How are you planning on reaching the decision makers in each of those districts who are interested in what you sell?
· What makes you think that increase will be spent on what you sell?
· Would this mean you will spend less money marketing to the agencies that spend more with you?
· Now, do you still want to increase your marketing to the education segment?

I don’t know what my friend will end up doing, but here are the real issues:

· A 9% increase for the Department of Education translates into $4.5 billion, pocket change in terms of the federal budget.
· Even if the money is divided equally amongst the districts (which will not happen), the increase will not amount to a large pot to go after.
· If you have a limited marketing budget (and most companies do), you are better off making certain current customers are better served first before going after new customers.

Sometimes there is something to read between the lines, and sometimes there isn't.

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