People love the term ROI. It’s such a sexy term, but quite frankly I think it’s something that is regularly ignored in the world of higher education web. This could be partially due to the fact that it’s a term loved by people with MBAs. And let’s be honest, most web people went down another path.
When dealing with a boss or college administrator, being able to show a return on investment (ROI) for the time we spend doing things for our college or university website is a quick and powerful way to buy credibility and authority. Quite frankly it will help you get decision making power.
Over a year ago I asked a simple question in a blog post. Does your institute have a defined value for each student application received? The results came back 50/50. Now maybe you aren’t in admission and don’t care about this, but if you work on the admission part of the website you should know and care about this. In that post I started driving into what is the value of a student to your institution. I want to recap that and go a little deeper to help you build a formula to compute your own website ROI on applications. First we need to figure out how much each student is worth to your school.
What Is A Student Worth?
There are probably many more complicated and detailed formulas that you could use to compute this, but I want to give a fairly simple one that any web individual could ask a few key people to get the correct data and compute a fairly accurate data point.
- Average Years - what is the average number of years a student stays at your institution? If it’s a four year college I can guarantee you that 100% of your students don’t stay all four years. Your enrollment department should be able to tell you this information.
- Cost Per Year – How much does it cost to attend your school for a year? You could compute this by semester and change years to semesters. There might also be a difference for in-state students or those living off-campus. Use your best judgment or dig a little deeper to get the breakouts and come up with an average based on last year’s data.
- Average Yearly Discount – Find out what is the average discount that financial aid gives to each student. You could look at this as a percentage of cost per year, but I like using dollars here.
If you can get the three data points above then you can pretty accurately see what each student is worth to your school.
Student Value = Average Years x (Cost Per Year – Average Yearly Discount)
What Is An Applicant Worth?
Now that we know the value of a student it’s time to see how much each of those applications filled out online is worth.
- Conversion Rate on Application – If you can get the number of applications that were completed last year and find out how many of them were accepted and became students you are good to go. Hopefully anyone in admissions could get this information for you.
That is the only additional data point we need to figure out how much an application is worth.
Application Value = Conversion Rate on Application x Student Value
So this means that every single application has a potential to be worth a full student. By knowing that percentage we can place a value on each application. Almost every recruitment driven conversion hopefully leads to an application being completed so we now have a baseline to continue to work up from. In a follow-up post next week I plan to take this another step up the marketing funnel to give you an idea about how valuable other items on your website can be.
If you don’t work on the part of the website that addresses recruitment this doesn’t mean that you are cursed with no way of showing true financial value from your web work. Simply think about the activities that are incorporated with the website that you run. Do any of them drive prospective student interest? Do they lead to alumni donations or any other things that have real physical value to the institute? You should spend the time to find out what those items are and exactly how valuable they are to your school.