Are you a luxury or a premium product?

Seth Godin today draws a distinction between luxury and premium goods; a distinction that is meaningful and important for independent and international schools.  Godin defines luxury goods as costly without intrinsic value; that is, what one buys is more the cache or "because I can" than any real usefulness.  Premium goods, on the other hand, are those that offer something more, such as a better quality of materials that translate into enhanced usefulness.

That contrast illuminates the marketing dilemma facing many schools.  Much of independent school growth in the U.S. across the past three decades has been from luxury purchasers--those parents who want the cache or social image that comes with sending their kids to particular private schools. A good indicator of who they are would be to figure which families in your school live in a top-tier public district; you know, one that is virtually as good (or in some cases better) than your school. Maybe they are with you for a premium service--smaller class size for an attention-challenged child comes to mind--but in all likelihood many of these families are in your school for luxury reasons.

The bottom line is that purveyors of luxury goods are hurting right now, and all forecasts are that they will hurt even more during the next year or so.  Premium providers ought to be in good shape, assuming they clearly convey the value proposition they have on offer and back it up with credible evidence (in other words, show them the data).