Impact of Peer Influence on Marketing in K12 Education (premium segment)

Peer influence in marketing, also known as peer-to-peer marketing or word-of-mouth marketing, refers to the power of recommendations, opinions, and experiences shared among peers or individuals within a social group. It involves the influence that friends, family members, colleagues, or online communities have on the purchasing decisions and behaviors of others.

Key factors that contribute to the effectiveness of peer influence in marketing include:

1. Trust: Consumers tend to trust recommendations from peers because they perceive them as unbiased and based on personal experiences rather than promotional intentions.

2. Social Proof: When individuals observe others within their social circle using or endorsing a product or service, they are more likely to perceive it as desirable or valuable. This concept of social proof can influence their own purchase decisions.

3. Relevance and Relatability: Peers often share similar interests, lifestyles, or needs, making their recommendations more relevant and relatable. Consumers are more likely to consider products or services that align with their social group's preferences.

4. Emotional Connection: Peer recommendations can evoke emotional connections and create a sense of belonging. People may feel more inclined to adopt similar choices as their peers to maintain social connections or to be part of a particular community.
   

Peer influence in the education industry, especially in K12 education, is very important.

Peer influence is important in K12 education because school is not just a place to learn, but also a place where parents entrust their children to the care of teachers and staff for a significant part of the day.

Parents often seek strong validation of their choice of school, which can be fulfilled by peer endorsement.

There is also a moderate degree of peer pressure, as individuals of a certain social and economic status are expected to send their children to schools that match the status of their social circles.

When parents search for a suitable school for their child, they consider various aspects such as the board or curriculum followed by the school, the performance of previous batches in board and competitive exams, the quality of teachers, and the school's culture and atmosphere. This process may take some time (six months or more) and require research across multiple channels and visits to several schools, particularly for those offering international curricula like IB or IGCSE and charging premium fees.

Throughout the process, these parents reach out to others in their network to gather firsthand information about different schools. This network may include relatives, friends, people living in the same building or housing society, colleagues, or online social groups. This is where peer influence becomes important.

Let us look at an example:

A leading IB school in Mumbai noticed that their existing parents could potentially refer eligible students to the school. To incentivize this, the marketing team planned a referrals program.

However, the program faced three main challenges.

Firstly, the target audience of the program were HNIs or UHNIs, who were unlikely to be motivated by small monetary rewards and might even be offended by any kind of payout or discount.

Secondly, the communication had to be such that the parent did not feel incentivized, but rather appreciated for their contribution to the growth of the student community.

Thirdly, the offer had to be something that the target audience would value, while keeping the offer value less than the average acquisition cost of INR 35,000 per admission.

To overcome these challenges, the team decided to offer a gift voucher for a luxury cruise from Mumbai to Goa for a family of four. The voucher and package value would depend on the number of students successfully referred by the parent.

This was an ideal reward as it offered an experience rather than a monetary reward, which would be appreciated by anyone regardless of their socioeconomic status.

The referral program was named "Refer and Cruise." The program was launched with the Head of School sending out a heartfelt email thanking parents for their support and informing them about the new program.

The email was followed up with additional communication via WhatsApp through the class representatives and banners on the school app and social media pages (except LinkedIn). To further ensure that all parents were aware of the program, standees were placed in the school reception area as well.

The response to the program was overwhelmingly positive, with many parents expressing their gratitude for the acknowledgement.

In fact, the 2019 admissions from referrals amounted to 22% of the total admissions.

In 2020, despite the challenges brought about by the pandemic, admissions from referrals increased to 30% of the total admissions. It is clear that the "Refer and Cruise" program was well-received and helped to strengthen the partnership between the school and parents.

The program's success can be attributed to the careful consideration given to the target audience - HNIs or UHNIs who are less likely to be motivated by small monetary incentives. By offering a gift voucher for a luxury cruise, the marketing team was able to provide an experience that would be valued by families and appreciated regardless of their socioeconomic status. The reward also aligned with the premium segment that the school catered to, making it a desirable incentive.

Furthermore, the communication strategy was well-planned and executed. The Head of School's email was personal and sincere, expressing gratitude to parents for their support. The follow-up WhatsApp messages and social media banners helped to reinforce the program's message and increase awareness among parents. The standees in the school reception area also provided a visual reminder of the program and its benefits.

It is evident that peer influence plays a significant role in the education industry, particularly in the K12 premium segment. Parents seek validation of their choice of school and turn to their network for firsthand information about different schools.

By tapping into this network and incentivizing referrals, the school was able to grow its student community and strengthen its relationship with parents.

Overall, the "Refer and Cruise" program was a well-planned and well-executed initiative that provided a valuable reward to parents and helped the school to achieve its goals. It serves as a successful example of how peer influence can be leveraged in K12 education to drive growth and build strong relationships with parents.