Back to school: Selling to the education market

Back to school: Selling to the education market

Ask a cross-section of manufacturers and resellers about their experiences selling to the education market and you'll see a pattern start to emerge: the education market can be a lucrative one, provided you're not in it for a quick buck and you're committed to understanding the special needs of your customers.

"A lot of vendors don't really understand the education market - they don't really know how schools work. What happens is that they approach the education market the same way they would the banking industry or other corporate sectors and that isn't going to work," said Melbourne-based Phil Mellifont, education marketing manager with distributor Dataflow.

Mellifont knows of what he speaks. Prior to joining the computer industry he was a teacher. "Education is quite different to a lot of other markets," he said. "For a start, it's a much slower process. You can start talking to a client in February or March and not close the sale until October. Of course that happens in other markets, too. But the point is, across the board, selling to schools is a very gradual process."

Compaq's education marketing manager, Wilma Carruthers, agrees. "The decision-making process in education is very slow. There are a lot of approval processes to go through," she said. "In terms of the speed of decision making, I'd compare it to other public sectors such as government. What makes education unique is that we don't see a lot of dedicated resources. The computer coordinator, if there is one, is often a volunteer or someone who's also juggling other duties. That's one of the reasons the wheels turn fairly slowly."

Adding flexibility

One of the ways vendors and resellers have sought to make those wheels turn faster is by offering education buyers more flexibility in the way they can procure computer equipment. Enter leasing and renting.

"Leasing gives education buyers at all levels - from primary schools all the way through to universities - a number of advantages," Carruthers said. "It allows them to stagger the funding - they don't have to find all of the money at once. It also helps to combat the obsolescence factor. Rather than an outright purchase of computer equipment that's going to end up obsolete, a leasing agreement makes it possible to lease equipment for, say, three years, and then upgrade to new equipment at the end of that term."

Ian Yates, a networking consultant who has done a lot of work with Sydney University, says renting is another alternative. "Renting's become quite popular. It works much the same as leasing, but it's sometimes cheaper in the long run," he said. "You rent the equipment for about three years and pay about 70 per cent of the equipment's value. At the end of the rental agreement, you can either return it or purchase it at what are usually greatly reduced rates."

Because Yates is an independent consultant he's more candid than some of the representatives of the large corporates when it comes to characterising the education market. "It can be quite strange," he said. "A lot of education clients tend to want to get everything for nothing, and they want endless support. The quantum physicist doesn't always stop to read the computer manual, so you can end up getting calls for a lot of routine things," he said.

A is for Apple

Any discussion of the education market has to include Apple. Apple was there first and the fruits of its labour include an estimated 40 per cent market share in education. Interestingly, the company hasn't been able to replicate its level of success in education in other markets.

"Going back to the early '80s, Apple has always made the education market a priority and I don't think there's any question that's why we're dominant in that market," said Jan Hedge, Apple's national education manager.

Hedge agrees with Yates's contention that education buyers are often looking for cheaper than cheap deals. "I think there is a belief on the part of some buyers that they're entitled to the very lowest rates, but people are also starting to realise that a company can't give things away and stay in business. We've always tried to give the education market the best deals we can. For example, we've introduced a new margin structure that gives our education customers a 13 per cent discount off what we normally sell equipment for," she said.

"We've got more than 100 education resellers throughout Australia and there aren't any manufacturers who can claim that," Hedge said. "A lot of our education resellers come from education backgrounds, either as teachers or people who were involved in purchasing computers on behalf of schools. They really understand what schools are looking for."

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