How Much Should a Private School Spend on Marketing?

Does this sound familiar? Your CFO pulls up last year’s budget, adds 3%, and calls it done. Or your board debates the marketing line item for 45 minutes without once mentioning enrollment goals. Maybe you’re staring at a $50k marketing budget wondering if it’s too much or too little.

Most schools are guessing. Some guess high, some guess low, but almost nobody is working from actual math.

After more than a decade helping schools figure this out, here’s the framework that actually works. By the end, you’ll have a budget number, a sanity check, and a way to present it to your board. This guide can help enrollment directors, marketing staff, heads of school, CFOs, and board members alike who need to secure or defend a marketing budget with actual data—not guesswork or ‘what we spent last year plus 3%.’

The Three-Step Framework

Establish the baseline – Find last year’s cost per inquiry and cost per enrolled student
Calculate budget from goals – Work backwards from your enrollment target using your actual conversion rate
Validate the investment – Check against student lifetime value and industry benchmarks (7-12% of revenue)

What Counts as "Marketing Spend"?

Before we dive into the math, define your scope:

Include:

Advertising (Google, Meta, print, radio
Marketing staff salaries and benefits
Agency or consultant fees
Web Design
Marketing Events
Materials (viewbooks, direct mail)

Exclude:

Financial aid
Building improvements
General administration
IT infrastructure (unless marketing-specific)

If you’re calculating cost per enrolled student, your marketing staff salaries are already in that number—don’t count them twice when building next year’s budget.

How to Calculate Your Marketing Budget: The Framework

Step 1: Establish Your Baseline Efficiency

You need three numbers from last year:

Total marketing spend
Total inquiries received
New students enrolled

Example:

Spent: $100,000
Inquiries: 500
Enrolled: 20 students

This gives you two critical metrics:

Cost per inquiry: $100,000 ÷ 500 = $200
Cost per enrolled student: $100,000 ÷ 20 = $5,000

These numbers tell you if you’re efficient or bleeding money. A school spending $10,000 per enrolled student when another does it for $3,000? One of you has a problem.

Step 2: Calculate Your Inquiry-to-Enrollment Conversion Rate

Take your enrolled students and divide by inquiries:

20 enrolled ÷ 500 inquiries = 4% conversion rate
If you’re below 5-8% for day schools or 3-6% for boarding schools (typical ranges we see in our client work), you have an admissions process problem, not a lead generation problem. Fix your inquiry follow-up speed, tour experience, and application friction before spending more on marketing. More clicks won’t fix a broken tour or slow follow-up.

Step 3: Work Backwards From Your Enrollment Goal

Let’s say you need 50 new students next year.

Inquiries needed: 50 ÷ 0.04 = 1,250 inquiries

Now calculate your budget two ways:

Method 1 – Cost per inquiry: 
1,250 inquiries × $200 = $250,000

Method 2 – Cost per enrollment:
50 students × $5,000 = $250,000

Both methods should land in the same range. If they don’t, your baseline data is inconsistent.

Step 4: Validate Against Student Lifetime Value

Before you present this budget to your board, show them what a student is actually worth.

Net annual tuition (after financial aid): $20,000
Average years enrolled: 7 years
Lifetime tuition value: $140,000

At $5,000 to acquire a student worth $140,000, that’s a 28:1 return (assuming steady retention and net tuition after aid). Empty seats are a perishable asset—that revenue doesn’t roll over to next year.

(Optional: Add downstream value from alumni giving, sibling enrollment, or referrals if you track it. Most schools should start with tuition-only to keep it simple.)

Step 5: Compare to Industry Benchmarks (SBA Guidelines)

According to guidance from the U.S. Small Business Administration, most organizations allocate 7-12% of revenue to marketing. This isn’t a rule—schools aren’t classic small businesses—but it’s a useful external sanity check. For context, e-commerce businesses often spend 15-20% while B2B companies spend 5-8%. Private schools typically fall in the 7-12% range because enrollment marketing is highly competitive but has clear ROI metrics and long customer lifetime values.

For a school with $5M in annual tuition revenue:

7% = $350,000 
12% = $600,000

If your calculated budget from Steps 1-3 falls in this range, you have validation. Significantly below? You’re likely underinvesting. Significantly above? You may need to improve efficiency first.

Step 6: Adjust for Market Competitiveness

The framework above assumes average market conditions. Adjust based on your reality:

High competition (multiple strong competitors within 20 miles): Add 20-30% to your calculated budget

Medium competition: Use your calculated number

Low competition: You might spend 10-20% less, but don’t sacrifice long-term brand building

What This Looks Like in Practice

Your board approved $100,000 last year. You enrolled 20 students. You need 50 next year.

Here are your options:

Option A: Hold the Budget ($100,000)

Inquiries generated: 500
Expected enrollments: 20
Assumption: Baseline $200 cost per inquiry, 4% conversion—nothing changes

Option B: Scale the Budget ($250,000)

Inquiries generated: 1,250
Expected enrollments: 50
Assumption: Same efficiency, just more volume

Option C: Optimize + Increase ($175,000)

Inquiries generated: 875
Expected enrollments: 52-53
Assumption: Improve conversion rate from 4% to 6% through better admissions process

Most schools choose Option C—strategic budget increase plus operational improvements to admissions process.

Common Mistakes Schools Make

Copying competitor spending: You can’t accurately estimate what competitors spend, and their efficiency might be terrible anyway.
Ignoring conversion rates: More inquiries don’t matter if your admissions process can’t convert them.
Using percentages without context: A school at 95% capacity needs different investment than one at 60%.
Cutting marketing when enrollment drops: This creates a death spiral. If you have 10 unfilled seats at $25K tuition, that’s $250K in lost revenue this year—revenue that doesn’t roll over to next year. Empty seats cost more than marketing spend.
Spreading spend evenly across 12 months: Front-load your budget during peak inquiry season (typically September through February for day schools, earlier for boarding schools—adjust timing for your market’s academic calendar). Scale back in summer but don’t go dark—maintain brand presence and nurture campaigns year-round.

The Reality Check Nobody Wants to Hear

If your tuition is $25,000 and you have 10 empty seats, that’s $250,000 in lost revenue this year. Those seats don’t roll over to next year—that money is gone forever.

Marketing isn’t an expense. It’s cheaper than empty classrooms.

The schools that treat marketing as discretionary spending are the ones watching enrollment decline while wondering what happened. The schools that budget strategically—using frameworks like this one—are the ones filling seats.

Next Steps

You now have three validation points:

1. Your historical efficiency metrics (cost per inquiry, cost per enrollment)
2. Your goal-based calculation (working backwards from enrollment targets)
3. Industry benchmarks and student lifetime value

When all three align, you have a defensible budget. When they conflict sharply, you know where to investigate: Is your admissions process inefficient (high cost per enrollment)? Is your market more competitive than you realized (requiring more budget than benchmarks suggest)? Are you comparing yourself to the wrong peer schools?

Present your budget to the board as a range with clear assumptions: “Based on our 4% conversion rate and goal of 50 new students, we need $250K. If we improve our admissions process and reach a 6% conversion rate, we can achieve the same enrollment goal with $220K.”

We’ve turned this framework into a free workshop replay where I walk through the calculator live with real school examples—including how to handle the messy parts like inconsistent data and board objections.

Watch the free Private School Marketing Budgeting workshop replay here

Or if you’d rather talk through your numbers with someone who’s done this hundreds of times, schedule a complimentary strategy session. No pitch, just math.

FAQ

What if our board says we can't afford the calculated budget?

Show them the cost of empty seats. If your tuition is $25,000 and you have 10 empty seats, that’s $250,000 in lost revenue this year alone. Marketing is cheaper than empty classrooms.

Should we spend the same amount year-round?

No. Front-load spending during peak inquiry periods (typically September-February for day schools, earlier for boarding). Scale back in summer but maintain branded search and nurture campaigns year-round.

What if our conversion rate is below 4%?

Fix your admissions process before increasing budget. Audit:

Inquiry follow-up speed (should be under 5 minutes for web forms)
Tour show-rate and experience
Application complexity and length
Yield materials (ROI calculators, shadow day opportunities)

More leads won’t solve a conversion problem.

How long until we see results from increased marketing spend?

Inquiries come quickly (30-60 days). Enrollments take longer (6-12 months from first inquiry to enrolled student). Budget for the full enrollment cycle, not instant results.

What if we're already at 90-95% capacity?

Your focus shifts from volume to selectivity and yield. Marketing becomes about attracting mission-fit families and improving conversion of accepted students, not generating more top-of-funnel inquiries.

Talk to the Experts!

Need help crafting the perfect marketing strategy for your school? At Spiral Marketing, our team of experts specializes in innovative private school marketing strategies that drive results.  