The K-12 edtech market has had the wind at its back for more than a decade. After a period of steady growth enabled by the buildout of school internet infrastructure and the installation of computers, mostly shared, in classrooms at all grade levels, the COVID-19 pandemic catalyzed a massive pull-forward of adoption. Districts relied on the Elementary and Secondary School Emergency Relief Fund to complete the implementation of one-to-one computing and to rapidly adopt digital curricula to keep instruction going in remote and hybrid learning environments.

K-12 decision-makers have consistently told us that they will maintain that one-to-one computing infrastructure. The software-enabled classroom may be here to stay, but the outlook for the edtech market is changing. In surveying K-12 supplemental curriculum decision-makers over the past two years, we found their expectations for market growth have slowed, particularly in English Language Arts (ELA) and Math. Expiring Elementary and Secondary School Emergency Relief (ESSER) stimulus is one reason. Another factor is saturation, with the average district having six to eight supplemental ELA products and five to seven supplemental Math products. Simply put, teachers do not have time in the school day to make use of it all. As budgets tighten, districts will be thinking more critically about what they will buy going forward, reducing the number of edtech products purchased and driving consolidation within the industry. The adoption of generative AI will also create a new crop of winners and losers.

The growth engine for K-12 edtech providers will shift as well. A provider’s ability to capture and maintain market share will drive growth rather than market tailwinds. To succeed as the market matures into this new phase of consolidation, leadership teams, and investors must revamp their go-to-market strategy.

We see that strategy as preparing for three key battles in the adoption lifecycle: the budget battle, the usage battle, and the renewal battle. Organizations can assess their readiness for each of these battles by asking a series of questions and revamping their strategy accordingly.

Strategies for mastering the budget battle in K-12 edtech sales

Winning the budget battle requires deploying the right number of salespeople against a fragmented opportunity of about 13,000 public districts, 100,000 public schools, and 30,000 private schools. It also requires the right organizational enablers, such as territory construction and incentives, to capture value and reach all potential audiences. Leaders and investors can assess their strategy by asking themselves crucial questions that uncover whether they have the right number of salespeople in the right roles, whether they are correctly identifying top performers, and whether their compensation packages are incentivizing the right actions.

Winning the post-sale usage battle in edtech

After the sale, winning the Usage Battle becomes critical to cementing the adoption with customers and setting the stage for renewal. This battle is especially important in today’s environment when many K-12 districts have more products in the classroom than teachers can realistically use. While there are product considerations - ease-of-use is a top one across product categories - go-to-market strategy has a critical role to play. When assessing their strategy at this phase of the customer relationship, K-12 edtech leaders and investors should examine their approach to professional development and training, whether they should actually be charging customers for it, and sharpen their ability to assess when usage might drop off so they can successfully intervene.

Securing renewals in the competitive K-12 edtech landscape

Achieving a successful renewal is a measure of product quality and the culmination of efforts made by the go-to-market team throughout the adoption lifecycle. Renewals also provide an important opportunity for upselling and cross-selling. As budgets are constrained, renewal decisions are becoming increasingly competitive. K-12 edtech leaders and investors should review their strategy with an eye toward whether they can demonstrate usage and outcomes to customers, assess whether they have the right roles in place to handle renewal and upsell, ensure they have established a logical cross-sell path within their portfolio, and that pricing is aligned to the overall strategy.

Revamping edtech strategies for market impact and growth

Using this series of questions, we have helped K-12 edtech organizations revamp their go-to-market strategy and drive meaningful impacts to growth despite market challenges. Below are some of the results our clients have achieved.

• Accelerating growth with a constrained budget by pivoting to a field-first sales orientation, focusing on the highest opportunity customer segments. This enabled a client to grow more than 30% over two years after a period of stagnation.
• Driving rapid expansion for an underinvested business line by growing the sales force to shrink territories and drive share gains, as well as prioritizing sales team expansion using a phased approach to increase coverage in the most underserved areas. This put a client on the path to more than double topline revenue in less than five years.
• Changing sales mix to more profitable business lines by implementing an incentive plan that rewarded sales reps for the more difficult job of selling recurring subscriptions rather than easier one-off sales. This enabled a client to improve customer retention, provide better revenue visibility to guide investment decisions and shift their revenue profile towards higher valuation recurring revenues.
• Reversing a revenue decline to return to growth by changing incentive plans to set targets based on current and expected share in a territory, reducing incentives paid to underperformers, and using the savings to accelerate incentives for overperformers, removing decelerators and caps for the highest achievers. This helped a client turn a business segment from mid-single-digit declines into mid-single-digit growth in a flat market.

K-12 edtech is at a point of transition. The era of easy money and market-driven growth is ending. We believe that companies that successfully pivot their go-to-market teams to prioritize share gain and retention in this slowing market will be in a strong position as the sector matures.

An organization’s success in this environment will be determined in large part by go-to-market strategy. Further, the next phase of the K-12 edtech market will likely be marked by consolidation, which will occur along go-to-market synergies. The winners in this environment will be those leaders who lay the groundwork now to optimize their go-to-market teams. Those who do not make this transition are likely to struggle and, eventually, be acquired by those who do.