Could Your School Become the Next Service Merchandise?

2016-05-22 10.46.37

On Sunday, I drove from my home in St. Petersburg, FL, to Dothan, AL, to work with Houston Academy, an independent college prep school of just over 600 students. During my trip, I passed an old Service Merchandise store and the memories came back.

I remember shopping at Service Merchandise in the 70’s and 80’s.

The store was set up as a catalog showroom. You could look at the merchandise throughout the store and then you had to place your order. Once your order was placed through a catalog order form, your purchase arrived on the conveyor belt. None of the inventory was kept on the shelves, except for jewelry and other small items.

The store actually began in 1934 and continued until 2002. Service Merchandise reached its peak in 1994 with net sales of $4.05 billion and net earnings of $56.1 million. However, from this point on, the company spiraled downward until its closing in 2002 (see Wikipedia article).

According to the Brentwood Business Journal, “The Brentwood-based catalog retailer’s demise was intricately related to its antiquated business model and inability to successfully transform into a traditional retailer.”

Did you read that? Their business model was antiquated and they failed to transform to effectively reach their market.

It’s hard to believe that a major retailer like Service Merchandise would spiral downward and shut its doors. Competition from other big box stores, along with the recession, certainly affected their business model which led to their demise.

This made me think about our schools today.

Is it possible that a once thriving school could eventually end up like Service Merchandise?

Could people pass by your school in the future to find an empty parking lot, a dilapidated sign and the remnants of your building?

Your school must be willing to change and adapt. We live in a changing world and just because we have always done it “this way” doesn’t mean that “this way” will always work.

Your school must be relevant in your market. If your school isn’t relevant, then it won’t be able to attract and retain parents—your customers.

Your school must be led by strong, visionary leadership that is willing to do what it takes to offer a high quality education that meets the needs of families.

Your school must have parents that are satisfied with the educational experience, otherwise they will leave and negative word of mouth will spiral out of control.

Once your enrollment begins to decline, it is critical for you to find a way to turn this around. I have seen this in several schools that have called me when it was too late. In fact, the issue was not the marketing effort, it was an issue of the quality of the school, parent satisfaction, meeting the needs of parents and other environmental factors.

Service Merchandise declined and eventually shut its doors because their business model was no longer relevant and the competition outperformed them.

Heed the warning of Service Merchandise.

In case you missed the recent webinar on Eastern Christian’s Enrollment Turnaround, you can access the recording online by entering your name and email address. Click to listen to the recording.