Exactly How Much Is An Applicant Worth To Your College or University?

Exactly How Much Is An Applicant Worth To Your College or University?

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)

student value blackboard Exactly How Much Is An Applicant Worth To Your College or University?

Student Value Example

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

application value blackboard Exactly How Much Is An Applicant Worth To Your College or University?

Application Value Example

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.

Final Thoughts

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.

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application value, recruitment tools, student value, website roi

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This post was written by:

Kyle James

Kyle James - who has written 227 posts on .eduGuru

Kyle is currently the Customer in Residence at HubSpot, a Co-Founder at nuCloud and  formerly the webmaster at Wofford College. Kyle is an active contributor in the social media spectrum. Although his background is technical, he claims to know a thing or two about marketing, but mostly that revolves around SEO, analytics, blogging, and social media. He has spoken at multiple national conferences and done countless webinars on topics ranging from e-mail marketing to social media and Web analytics. He's definitely a fairly nice guy.

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12 Responses to “Exactly How Much Is An Applicant Worth To Your College or University?”

  1. Avatar image
    Karine Joly Says:

    Great post, Kyle!

    And, as Avinash Kaushik told us last week at SIM Tech, you can even go further and put an economic value to your web conversions (submitting the application) and your visitors referred by your marketing campaigns by tagging them and segmenting traffic.

    But, that’s probably the topic of your next post ;-)


  2. Avatar image
    Karlyn Says:

    why gee, this looks an awful lot like a presentation I started giving over two years ago…. ;-)


  3. Avatar image
    Jen Swartz Says:

    Really good article. Now lets see more budget allocated toward attracting these students!


  4. Avatar image
    pmw Says:

    Of course you’re only computing their gross value. You should also look at the other side of the balance sheet and figure out what a student costs your institution so you can arrive at their net value, which will be somewhat less than their gross value.


  5. Avatar image
    Karlyn Says:

    He’s talking about the revenue that a student brings into the institution, which the institution can spend any way they like. Yes, it’s a simplistic calculation but it’s still more complicated than what most schools are doing. Baby steps.


  6. Avatar image
    Andrew Careaga Says:

    Nice job, Kyle. You could take it a step further and determine the lifetime value of a student by calculating the average alumni giving amount until age 78 (roughly the average life expectancy in the U.S.). If the average grad gives $50 annually, over 57 years that would add another $2,850 to the value. Of course, this would be a conservative estimate since it would not take into consideration campaign gifts, planned gifts, etc. But it would take the bigger picture into account.


  7. Avatar image
    Isaacson Says:

    This is definitely an interesting article but I think there are some dangers of this oversimplifications.

    Three quarters of Americans in higher education are in public institutions. At such schools paid tuition has nothing to do with revenues. Tuition goes to the state and revenues are determine by state legislators, often in ways that are unrelated to enrollment, or even sometimes inversely related to enrollment. Admissions offers are often in a bind because the politicians exhorted them to open the doors to more students, but then allocated less money the more students enrolled.

    At tuition-driven private schools revenues are related to enrollment, but in complex ways. For example, a school may lose money on a full scholarship honors student who enrolls, but they want them in the hope they attract other students. And that’s just the tip of the iceberg in trying to quantify the relationship of enrollment to value.


  8. Avatar image
    Mark Rothbaum (Varsity Outreach) Says:

    Really interesting post. I think quantifying performance and identifying expected values (especially on the web, where more data is accessible than in other media) is a must.

    One question… how many schools have trouble filling their classes? What I mean is how many schools, if they got 10% more applicants, could enroll 10% more students, for example? If yes, this simple formula could be a great way to think about admissions marketing efforts.

    To be honest, I don’t know what the answer is. My sense, though, is that highly selective schools and large state universities, at the very least, have no shortage of qualified applicants. If that’s the case, then more applicants doesn’t translate into more revenue. It may translate into a more diverse class or a more accomplished class… both of which are obviously desirable.

    Ultimately, I think your idea of quantifying performance and measuring the return on your investment (of time, effort, and money) is dead on, though.


    • Avatar image
      Kyle James (author) Says:

      @Mark - let me throw another thought your way that I’ll talk about in the post I have planned for next week. We all know how schools love their rankings right? We all know it’s bullshit but people love things like the US News Rankings. Well if you could increase applicants and be more selective does this not a) increase your rankings because you can say you are more selective b) over time make your institution a more prestigious school because you are able to be more and more selective with each incoming class.

      Just a few more pieces for thought.


  9. Avatar image
    Mark Rothbaum (Varsity Outreach) Says:

    Interesting points.

    I wonder if it’s worth coming at it from the opposite side (cost instead of revenue). What’s the cost of getting applicants? How can schools most cost-effectively reach their enrollment goals?

    Aren’t most admission offices working with fixed budgets? The challenge is allocating that budget most effectively… unless you’re a for-profit university that can ramp up efforts as enrollment and revenue increase.

    I think these same principles that you discuss in your post come into play. You still need to measure your performance, but instead of approaching it as “how much is each student worth?”, you ask “how many students applied, enrolled, and ultimately graduated based on how I spent my budget?” Which initiatives gave me the most bang for my buck?

    Just my two cents… if it’s even worth that ;)


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