POSTED 05/01/2009
By Tom Abrahamson, Managing Director & Principal
There is a plethora of news stories emerging right now about colleges – particularly elite schools – and the trouble they’re having making their fall 2009 class. The focus is typically on yield – the percentage of admitted students who enroll at an institution. Why yield? Because this metric has long been considered the bellwether statistic that defines a college’s brand power and popularity. It’s the measure of first-choiceness. It’s the win rate. It’s bragging rights for colleges, students, and parents. It’s a measure of health to a bond-rater or financier. And it has been dropping steadily across the country as students apply to more colleges on average each year. After all, a student can only attend one college at a time, and the percentage of freshmen who apply to six or more colleges has gone from 18 percent to 28 percent in the last decade. So, it’s no wonder the selective college world, already feeling a bit devalued lately because of overall slumping yield rates, is now in a tizzy because home finances have collided with college dreams and aspirations.
GEAR UP FOR BATTLE
Hardest hit are less selective colleges. Most do not have the luxury of giant application pools and waiting lists. Enrollment is often unbalanced, with some programs sitting with excess capacity, while others are oversubscribed. They are being pressed by money-conscious admits to sharpen the pencil and “re-award” financial aid at a time when financial aid discounts are at or near redline. Even schools who claim to win the yield battle aren’t quite as successful this year if you take a closer look at what is behind the numbers. Even Harvard – which typically tops the list of highest yield at about 76 percent – has had to fight to maintain that rate this year by increasing its financial aid budget by seven percent, a solution other schools facing the rate drops may not be able to muster in the current economic climate.
The lesson learned by most colleges this year is that you better have enough good-fit applicants early on in the college decision-making process in order to withstand a big hit to yield late in the cycle.
JOB ONE: INCREASE CONVERSION
I predict that the name of the game for the next several years will be on increasing “conversion” – from prospects to applicants – and that yield, while still important, will no longer be Job One of enrollment managers and marketers. The implications of this are many, mainly because of the cost and time involved in serving bigger numbers that reside “up funnel.” About one in eight inquirers to a four-year college actually apply for admission to that school. That means for a college to end up with 2,000 applicants, they’re servicing a prospect pool of 16,000. If that same college wants to create a cushion and increase their applicant pool to 2,500, they’ll need an additional 4,000 to 5,000 good-fit prospects. Considering that many colleges are in budget freezes and cuts, the “do more with less” or flatline budget directive becomes quite a challenge, or more likely an impossibility. We have witnessed the undesirable effects of colleges trying to deliver on a standard of high-touch service to a larger pool when staff ratios and communications budgets are not concomitant with increased prospect and applicant pools. This approach usually results in diminishing returns that make their way down funnel to lower enrollments.
So, what to do? The answer is to effectuate a marketing mind-set around return on investment, do the best research and planning you’ve ever done, and become a champion on your campus.
Some tips:
DECISIVE ACTION IS NEEDED
Get the budget you need to get the job done. I’ve dubbed the most common budgeting approach employed by college marketers and enrollment managers (usually developed under heavy pressure from their CFOs) the “here’s what I’ve got, so what can I get with that” budget model. Your institution is counting on you to deliver the enrollment that generates the vast majority of revenue for your institution. I am an advocate for being a team player, but a strong team needs a visionary leader who is ready to “fall on a sword” for what she/he believes in – even if that means saying “my budget can’t be cut, or must be increased by ‘X’.” And here’s why: the investment of “X” will return “Y” in enrollment and “Z” in net revenue by (Date).
Shed the barnacles. Can you say with absolute certainty which, among your 50 or more enrollment marketing tactics and information channels, are productive and which are a waste of time and money? Can you say the same for your competitors? For important student segments, such as students interested in particular majors? For geographic markets? If the answer is yes to all of the above, you probably share my marketing “science” mind-set: “If you can’t measure it, you can’t manage it.” You are probably also regularly conducting marketing effectiveness scorecard research that provides you with these answers (if you’re not, let me tell you how we do that at Lipman Hearne for our clients).
TAKE CALCULATED RISKS
Build your marketing on ROI principles and measures. The tenet, “marketing doesn’t cost anything, it makes money” needs to be understood and proven to your colleagues and higher-ups. The best marketers and enrollment managers are masters of both expense-side planning and the revenue generation associated with “lifetime customer value,” and develop plans, budget requests, and objective assessments of results, accordingly.
Understand that “Flat is the New Up.” With declining high school graduates and ethnic shifts projected for most of the nation between now and 2017, it is the job of the enrollment manager and marketer to understand national and local trends and apply this intelligence to enrollment planning. If your state is expected to drop 6 percent in projected college-bound high school grads in the next two years, others at your institution must understand that first there will be a hole to fill to stay even. Growth, if desired, is above and beyond that. And, these trends are by no means a secret – your competitors are not standing still. They know what you know and many of them are gearing up for battle.
Get outside help. Augment what you can do inhouse, and get help to make the case for what must be done.
Invest, don’t retrench. (remember, marketing doesn’t cost money, it makes money)
Lead. Your institution needs you to tell it like it is and take calculated risks, if that’s what your situation calls for.
Believe in your college. Your college has succeeded this long because of the power of its mission and will to thrive. Undoubtedly, there have been some tough times in your institution’s history that required drastic measures. If this is one of those times (say, if you’re entering a third consecutive year of enrollment declines), intervention may be called for, and that’s OK. As Rahm Emanuel was quoted as saying, “Never let a serious crisis go to waste.” The alternative – to do nothing different – is not an option really, is it?
Believe in yourself. In my 30 years in this field — formerly as Associate Vice President for Enrollment Management and Dean of Admissions at DePaul University, and now, 15 years at Lipman Hearne, I’ve helped hundreds of colleges achieve their enrollment goals. I assure you that understanding the new “rules” and being a champion on your campus for marketing and optimized enrollment management will work for you. Let me know if I can help!
Download Advice to Enrollment Managers and College Marketers: It's More Than Yield (PDF).
« BACK TO RESOURCE LISTING
