Two Compatible Paths — Take Both
There is little good news in current and projected college enrollments. Setting community colleges aside as a special case, independent colleges and universities are the hardest hit and will continue to be so for several years. While a few atypical independents are growing, most are struggling to meet enrollment targets. Some come close but fall victim to the silent killer: loss of total market share. Others are making budgetary adjustments to budget for a 5-10% decline. (To those adjusting budgets down: please do not cut your marketing, lead generation, and enrollment budgets out of a misplaced notion of equity.) Going forward, a key point often missed is that a large portion of enrollment growth — all of it for some institutions — can only come from market share taken from competitors.
The question I hear most from our clients is, “How do we succeed (grow) in this era of declining demographics and increasing competition from well-branded and cash-rich schools?”
With apologies to the complexities we deal with daily, the short answer is:
Become much better at the complex process of attracting and enrolling uncommitted students
Offer fresh programs that are responsive to the needs of your market
Specifically, growing in this environment will require new programs aligned with emerging needs and improved marketing and enrollment processes to attract and enroll students. Instruction based on modern learning sciences and precision managed retention play important roles as well but they account for less total success than enrollment (do it better and before your competition takes the prospective student off the market) and programming (offer the programs for which unmet need is highest). Expect to see outsized growth over the next few years in the market share of universities that enroll well, offer the right programs in an engaging structure that aligns with the learning sciences, and support students through structured retention services.
Put Enrollment Before Programs
Most of us would agree that it is bad practice to place a great product in the hands of a bad sales team. But the message gets lost when we change “sales” to “enrollment.” While most institutions have a decent if improvable catalog of programs, only 10-15% can make that claim about their enrollment function. I have more than two decades of hard data showing that the typical enrollment counselor turns away or turns off uncommitted prospective students by ignoring them, by being materially unresponsive to their needs, by seeking to enroll them before seeking to understand their needs and constraints, and so on through a dozen well documented points.
To a senior administrator’s eye, guided by the wrong metrics, enrollment teams may appear to be doing a good job because they have become proficient in enrolling prospective students who made up their mind to attend the university before inquiring. If these students (called “bluebirds” because they fly in the window under their own power) were ever enough to meet your enrollment targets, they will not be sufficient in the future.
Enrolling bluebirds requires low-level order taking skills. Being cordial is generally sufficient. Committed prospective students will do the rest. Enrollment counselors who bring these skills to uncommitted prospective students fail to convert enough or sometimes any of them. Uncommitted prospective students are comparison shopping and looking for a reason to attend based on their unique goals and circumstances. They need to know that your institution understands these circumstance and has a plan that will address them.
A Few Things You Can Do
Check your metrics. What percent of uncommitted shoppers should your enrollment team be able to enroll? The answer depends on the program, the program level, the competition, tuition level in relation to de facto competitors, time-to-degree, and other factors but a simple rule of thumb might be that your team should enroll nearly half of the uncommitted shoppers who contact your university via your website, email, or telephone (organic leads, 40-50% minimum conversion). If your metrics do not support the distinction between bluebirds and uncommitted shoppers, change them today. Separate the bluebirds and focus your assessment, coaching, training, and collateral on how well you are doing with uncommitted prospective students.
Get an audit. It is a good idea to check your equipment before setting out on a journey. This is why an audit of lead generation, website, and enrollment systems and processes is one of the most valuable services we provide. As you might expect, I have good reason to believe our audits are the best but speed is important here. Find someone to provide an expert and impartial assessment of your enrollment function. An audit should examine the structural and functional integration between branding, lead generation, enrollment, collateral, and pre-matriculation services. It should examine policy and business rules, and the relationships between role definitions, performance standards, and actual daily behavior. It should pay special attention to the metrics by which enrollment performance is evaluated and guided. Virtually every independent college we have audited over more than two decades, was found to be managing with metrics that were counterproductive to the institution’s goals. Things get better quickly when you develop, gather, and act on the right metrics. Above all, a good audit is as enjoyable as it is informative; it places detailed actionable recommendations in the context of best practice as adapted to the institution’s goals and its place in the markets it serves.
Our institutional growth audits often lead to recommending that the university temporarily defer launching new programs until the enrollment team can consistently convert uncommitted prospective students.
Bottom line: Our findings, consistent across 26 years of research, show that enrollment is most often the place to initiate a growth plan.
Enter the New Programs
If good enrollment practices are the first and best way to increase enrollments, launching the right new programs is the second most impactful path. The new program path is more risky, however, because of the time and cost required to fill the first seat and the possibility that not enough people will show up to make the program viable. These risks elevate the importance of making the right program decision the first time.
A recent study found that 48% of university programs generate fewer than 10 completions per year, meaning that 48% or more of the programs are probably operating in the red. Losing money on a program does not necessarily represent a failure if the loss aligns with a strategic decision and the program is managed to achieve whatever negative margin is deemed acceptable. Unfortunately, most of these programs are not intentional or mission-related losses. The majority of losses come from a fundamental misunderstanding of the nature of risk mitigation when determining what new programs are needed, by whom, in what numbers, in what format, and whether the institution is or would be viewed as a desirable provider.
The most common mistake made in mitigating new program risk is selecting new programs based on gross demand rather than net demand understood in the context of institutional value proposition.
Gross demand reports are widely available from the large marketing companies. Objective data and market logic show that gross demand may or may not align with program success. Moreover, the correlation coefficient between gross demand and program success, never high, is well below chance level in competitive markets. Flipping a coin might be an equivalent alternative.
A more longstanding mistake is selecting new programs based on demographic and psychographic attributes of theoretically prospective students. There is some merit in understanding target market demographics but that kind of information is best understood as a modulating variable in estimating enrollments after program feasibility and success have been determined by much more precise research methodologies. A few other sources of error in selecting for program success include launching programs deemed needed by faculty or those suggested by currently enrolled students.
How To (and how not to) Mitigate Risk in Selecting New Programs
Unless you are fortunate enough to have no competitors combined with large unmet demand for a new program, you need research-driven answers to 5-10 questions before making the decision to launch a particular program or move on to another possibility.
Together, the answers to these few questions create what you need to know to mitigate risk, and what you need to know is this:
Is there reliable evidence of sufficient and growing unmet need for a program for which my institution possesses enough brand equity to enroll a desired number of students in my target market?
Not all information contributes to risk mitigation and some kinds of seemingly useful information can actually increase it. Information that can increase the risk in a program launch decision includes data from job boards and the (uncorrected) BLS and enrollment propensity profiles based on demographic attributes and classifications. Even though reports based on these kinds of information appear to contribute to better decisions, the information they contain has low and sometimes negative predictive validity. At most, market research provided by “big box” companies offering boilerplate software-generated reports might suggest areas to consider for development but they do not address the issues central to growing profitably in a highly competitive environment.
Real risk mitigation requires the kind of intelligence that comes from hands-on work in your market to determine net demand and net growth assessed in relation to other factors including, for example, the value proposition and current market share held by competing programs and the ability and desire of these programs to scale to meet additional demand. Early in the process, valid risk mitigation assesses gross demand in the context of finely gradated (qualified) supply metrics and other factors that determine net demand and projections for net demand growth. These “net” metrics are then assessed against other critical success factors. The results of these research, analytic, and interpretative processes is a determination of the probability and conditions of a successful launch and a final launch recommendation, all with considerable detail attached.
The research process by which we get to a final recommendation is determined by methodologies we have refined over 26 years and 3,000 individual research studies, reports, and opportunities to follow through to assess impact. First, we examine our own longitudinal knowledge base. As one example, our detailed research interview notes from more than 40,000 employers, university program managers (competing programs), program accreditors, regulators, etc. are at our fingertips. Given the comparatively small number of academic program studies, we have thousands of personal interview notes in our knowledge base for most programs. In this background preparation phase, we also search external databases for emerging issues. The next phase involves having telephone conversations with university program leaders that will be your competitors. Are they growing? Are they at capacity? Can they expand to meet new demand should it appear? Can they fill their externship placement requirements? We have similar conversations with employers who may want to hire your graduates and may be interested in helping your program succeed. You get the idea by now. I’ll stop here and note that this is real research executed by senior academic researchers with more than two decades of experience.
Questions To Be Answered
The methodology sketched out above provides answers that will eliminate program launch risk to a negligible level. Consider the questions typically answered:
If you offer this program, which existing programs will be your de facto competitors?
If blended, is the need located within the area from which prospective students are likely to attend your new program? Is your method of blending optimal for your audience and context; if not, what is?
If online, what kind of branding and lead generation budget will be required for your program to succeed against your de facto competitors in a defined market attraction area?
Would you be better situated to launch online, blended, or both?
If demand increases, can your prospective competitors easily scale to meet need and are they committed to doing so?
Is uncommitted future growth of the program such that you can secure sufficient enrollments from the expanded market? If not, what proportion of your growth would depend on taking market share away from competitors and what would that entail?
Does your institution possess sufficient brand equity to offer this type of program in this market? If so, how will your brand stand up against the competition?
Do employers in your market perceive an unmet need for more graduates of this type of program? If so, what are the details of that need?
Are employers interested in collaborating with you in ways that might be mutually beneficial? If so, what is their situation and contact information?
Our experience demonstrates that mitigating all of the knowable risk in advance of a program launch decision is possible but only if you ask the right questions with a valid research methodology and if you develop an adaptive strategy based on the answers.
Comments? Questions? We would love to hear from you.