Positioning Your Product in a Funding Decline

By October 24, 2012October 13th, 2017No Comments

As year-end approaches there’s a looming threat of across-the-board cuts to federal programs, including education, according to Jennifer House and Paula Love of RedRock Reports. House and Love led a webinar recently explaining the potential impact on education funding and how to improve product positioning and sales in spite of the possible cutbacks. Here are a few of the highlights.


In 2011, a Congressional committee was established to determine a plan for reducing the federal deficit by $1.2 trillion. As a motivator for Congress to reach an agreement, it was decided that sequestration would be triggered if the issue wasn’t resolved by Thanksgiving. Sequestration, a fiscal policy adopted by Congress, implements automatic budget cuts of previously approved spending. Unfortunately, Congress still has not come to an agreement, and if it fails to do so, sequestration will begin in January 2013.

Under this scenario budget cuts will be imposed over a span of nine years until the goal of $1.2 trillion in reductions is met. If this happens, education funding would suffer more than an 8 percent decrease. Amounting to $4.1 billion, these cuts could include $1.2 billion from Title I and nearly $1 billion from IDEA. [Figures found at www.ascd.org]

Market Opportunities

Many in the education industry assume these scheduled cuts will narrow the market for their products. Yet, all hope is not lost. Opportunities may be harder to find, but they still exist. The webinar included the following areas with positive prospects in the industry.

  • Online learning. An increasing number of states now require that students take at least one online course before earning a high school diploma.
  • Professional development products. There is a growing emphasis being placed on educators’ professional development. The use of substitutes, in particular, creates a pressing need for professional development products and services. Recent trends show that $4 billion is spent on substitutes each school year, yet only 15 states require them to have a college degree.
  • Charter schools. Many companies are waiting to target charter schools until they encompass a larger portion of the market. Yet, with 5,600 schools serving 2 million students, House believes this market is already big enough to take notice.
  • Competitive funds. While many formula funds are decreasing, competitive funding seems to be growing. Federal competitive funds have seen a 16 percent increase. These include programs such as Race to the Top District (RttT-D) competitions and School Improvement Grants (SIGs). State and private sectors also provide competitive funding that creates opportunities.

Active Positioning

House stressed that in order to take advantage of these and other opportunities, marketers must begin taking an active approach to achieve better product positioning and sales. She strongly emphasized throughout the webinar:

  1. Determine which states will be most likely to buy your product. First, determine which states have the most money allocated to education. Which ones offer the best competitive funding? When states have surpluses, wait to see which will apply these funds to education. Money, however, isn’t the only factor to keep in mind. Each state and district has its own education goals to meet. Which has goals that your product can meet? Even if a district has the money, it won’t be interested unless your product is positioned to help it achieve these goals.
  2. Be knowledgeable enough to provide options. It is crucial that education industry marketers be well-versed on requirements and funding options in a targeted district. Educators can easily say they don’t have enough funding to buy a product. That’s why you should always have an alternative option at the ready. Be prepared to explain what other forms of funding are available, how your product addresses district goals, and why a particular funding source can be used to buy your product.

Are you staying hopeful despite the potential funding cuts? How do you plan to maintain your product or service’s active positioning?