Now granted, I don’t know the situation at every institute, but it seems to be that there is a fairly consistent misunderstanding of the value of a prospective student. Maybe “misunderstanding” is not the correct term. Maybe just the general sharing of this stated value isn’t made apparent to web people who can play a very important part of recruitment without any direct connection. An institute’s website is a VERY, if not the most, important piece of the marketing strategy for recruitment. Prospective students can learn about your institute and enter your funnel before you even know that they are interested in you. So there I go with another business type marketing word… funnel.
So to find out if maybe my understanding isn’t as accurate as I think, please answer the following question:
Does your institute have a defined value for each application received?
- Yes (53%, 9 Votes)
- No (47%, 8 Votes)
Total Voters: 17
Loading ...Why does this matter? Head of Marketing has taught us quite a lot about measuring ROI and Implementing Technology with an Eye on ROI (slides here). One problem still remains: Do people really take this to the root level to know how much marketing budget they can/should spend on a prospective student? This leads me to another simple revelation.
It doesn’t matter what you call it, a prospective student is a lead!
Let’s Look At Some Basic Math
What is the value of a student?
Student Value = average years for a student * (tuition – average discount)
So what is an applicant worth?
Application Value = Student Value * Conversion rate from applicant to enroll
So taking the above two formulas let’s say that the average number of years a student attends is 3 (a four year institution where students are always coming and going and may not stay the full four years) , tuition is $25,000 per year and average discount is $10,000. By doing some basic math we learn the student value is $45,000! That’s no pocket change. So let’s say that you average 10,000 applicants per year and your school only accepts 2,000. This means your conversion rate is 20%. So every application is worth $9,000!
What if there were ways that you could leverage the web to increase the application levels? What if you could be more selective, with a larger pool of applicants to pull from, by being able to leverage and spend money on some online channels because you now have a baseline for the value of these conversions? While we are at it how about some more questions. What is a student visit worth? What is a catalog download worth? What is the email address of a prospective student worth? If your web people don’t know this and aren’t working very closely with your admission people to accomplish these business goals then you need to wake up because we are quickly closing in on 2010!
Where Am I Going With All This?
Next week I’ll be presenting at Whipple Hill’s UC ’09 in Boston on the subject that an inquiry is a lead and ways that Higher Education really should be doing a better of job thinking about this in more of a business like perspective. Let’s be honest here…even schools that are not for profit need incoming students to survive, and if you aren’t bringing leads, aka prospective students, into your admission funnel then your school will be shut down. Guess what? Your website has become a VITAL part of this process, and today I’d be willing to guess that 90%+ of applications are processed completely online.
So I ask you again: What is a lead worth to your school and are you appropriating the correct resources to acquire or increase them?
Photo: DS Prospective Students by Shane Pope
Fantastic. The one missing component to our analytics has been attaching a dollar value to various conversions. Because of that, its been hard to impress upon people the actual value of the website. I’m very interested to learn more about this aspect.
Thanks for your thoughtful post, Kyle. Colleges and universities typically employ the latest best business practices for admissions. They may not know how much a catalog download is worth, but they know through predictive modeling who is most likely to enroll, and they focus their efforts on that group. That catalog download or student visit’s worth depends on who is doing the download and who is on campus for the tour. It varies. This is definitely the case with applications. All applicants are not created equal. What colleges do know is how much it costs to recruit a student, how much tuition is on the line with each one, as you mentioned. But believe me, higher education admissions is a big-time business employing the most competitive strategies that fit the profession.
Rick,
I agree with, for the most part, that colleges and universities know a lot of the best practices and predictive modeling and the rest of the analysis for the processes that they have been doing since the beginning of time with years of data.
What I don’t believe, and please correct me if I’m mistaken, is that they factor in their internet marketing and truly leverage that channel with all this analytical information. From the number of individuals I’ve talked to that barely know how to use a web analytics solution to simply not understanding the importance of social media and how to put an ROI on it I’m very skeptical of the widespread understanding.
And looking back at the poll I probably should have termed that a little differently: “Do you know your institutes defined value for each application received?”. I absolutely agree that all applicants are not created equal. What I want to know is which channel produces the most applicants, specifically online. Are the email campaigns we send out more effective than the post cards, or how many students enjoy our interactive map?
Better understanding of the true value for each of these channels instead of student X said they enjoyed reading our blogs really isn’t that complicated if you really know what you are doing and have the right tools. More to come on this subject in upcoming blog posts.
Kyle, when you put it that way, I understand. I guess it shouldn’t come as a surprise to me that admissions/enrollment leaders look at analytics regarding how their promotional strategies are working when I see that nearly 4 out of 10 colleges/universities do not any social media strategies either on an external platform or on their websites. There evidently are a lot of admissions/enrollment leaders not on top of their game. They should know how effective that email campaign is compared to a direct mail postcard campaign, compared to that advertising, compared to college fairs, so on and so forth.
I always knew how our website traffic was experiencing our website. I didn’t have to justify it with anyone on campus (everyone agreed that the website was a huge strategy in recruitment), so I wasn’t quantifying the potential dollar amount of each transaction as you described in your post. While it’s surprising to me that any admissions director would have to justify website work to leadership on campus, I do understand that social media may require more effort to get additional university resources. But whatever the case, tracking the effectiveness of all promotional strategies should be part of the process of admissions/enrollment.
Thank you for the thoughtful exchange. Good luck with your presentation!
Thanks Rick,
I’m really talking about more than just web analytics though. I guess at the end of the day we all love to have 100,000 visitors to the site in a week but if you were truly measuring it wouldn’t 100 visitors and 20 applications be more valuable than 100,000 and 5 applications? Assuming that those apps were of the same quality. Targeted traffic that is measurable and quantifiable is so important.
Having a facebook page for your school is great but what is the engagement in those discussions worth? Do any of those conversations result in future students and how do you measure it all? We are still VERY much in the beginning of web analytics and lead nurturing on the web but it truly looks like a new wave of decision making made by data instead of a few conversations with selected students.
What an amazing writing, Kyle. I loved the ways you calculating the formulas (Honestly, I guessed most of the colleges are using it as a standard).
nice post…I guess it really is a numbers game ??
I couldn’t have said this better myself. In the last couple of wks. I’ve had a similar conversation with my College of Business dean. He was in agreement that an inquiry IS a lead and should be treated with an immediate action. Now to spread that gospel to the marketing masses. Great pc.
Interesting post! It’s all worth to read and to share. You really have great insights!
Great article! I didn’t realize that recruitment was all about the numbers.
Fantastic article! I totally agree with you.