For Enrollment Growth, Marketing Beats Discounting

For Enrollment Growth, Marketing Beats Discounting

Published in Chronicle of Higher Education

David Ogilvy, legendary advertising guru, warned American businesses about the dangers of discount pricing. “Deals don’t build the kind of indestructible image which is the only thing that can make your brand part of the fabric of American life,” Ogilvy said. “Any damn fool can put on a deal, but it takes genius, faith and perseverance to create a brand.”

Yet many of today’s colleges and universities, while understanding the power of the brand, have ignored Ogilvy’s council and turned in droves to striking discount deals with promising students, all in an effort to contend with stagnant or shrinking enrollments. In the frenzy for a quick fix to fill seats, they have abandoned the basics of building a favorable image, of creating the most sharply defined personality of a brand that stands the vicissitudes of time. Says Randy Best, chairman of Academic Partnerships, “In trying to boost enrollment, large numbers of American universities are discounting tuition, some up to 50 percent, through scholarships, grants and other forms of aid.” While the practice may draw more students at the outset, the flow will stop when the price-cutting inevitably ends. “Deep discounting can jeopardize the long-term financial health of an institution,” says Best. Nonetheless, a survey by the National Association of College and University Business Officers reveals the still uneasy trend of “making a deal.” NACUBO looked at the tuition discount practices at 401 private, nonprofit, four-year colleges and universities. Two findings emerged: the discounts are steep, and almost no student pays full price. For the 2013-2014 school year, an estimated 88.9 percent of first-time, full-year freshmen received some kind of discount, with the average grant covering 53.5 percent of tuition and fees -- the highest since the study began in 2000. Colleges and universities, like other brands, are struggling to differentiate themselves in a more-crowded field. The losers in the enrollment battle most likely will be the ones with faint name recognition, a weakly defined market niche and an unbalanced reliance on discounts. In helping institutions of higher education transform on-campus programs to online offerings, Academic Partnerships has demonstrated that instead of devoting resources to discounts, investing in sophisticated digital delivery channels and marketing them aggressively through an integrated, global brand building effort is far more effective for growing enrollments. The benefits of devoting funds to smart marketing often have a sustained impact on a university’s growth, producing a stream that can replace a significant portion of declining revenues – and, for public schools in particular, dwindling state funding. Some public schools, like the University of Maryland, predict modest rises in enrollment over the next twenty years. But the increased enrollments may prove insufficient to offset continuing cuts in funding. Hiking tuition rates is one path to replacing lost revenue. But price sensitivity is a growing concern today, as more families question the value of a college degree, reflected in the inability of many students to find a job after graduation, or secure employment in their field of study. However, technology is altering the playing field. Deployed properly in the right circumstances, online learning can help colleges and universities stay relevant in an increasingly technology-based world, expand their markets globally and streamline business models without building new classrooms and dormitories. Academic Partnerships is working with public universities nationwide to raise enrollment – and keep its growth sustainable over time. Its lower operating cost, through the dual application of innovative technology and integrated marketing, enables it to recruit students in more affordable, high demand and scalable degree programs like an RN-BSN or M.Ed. – programs that many public universities have not been able to take to scale. “Most service providers focus on high tuition programs with lower enrollments,” says Best. “By working with our partner universities to market and deliver their programs, we have helped them reach record enrollment growth, which we believe is evidence that affordability is where the market is going.” Cost effectiveness also makes Academic Partnerships a bargain for partner universities. The total cost to a university is only 12% to 23% of the revenue generated by the students recruited. Online learning is the new frontier, and today’s institutions of higher education, with the aid Academic Partnerships, are realizing how a technology-based delivery of instruction can create an advantageous global reach. According to a recent survey by the Economist, “one in four respondents expects online and hybrid courses to attract more students and bring more revenue to their colleges or universities, while digital programs are allowing students to lower their own costs and shorten time to degree.” Yet, achieving the scale online that can grow a university’s overall student body by 20% or more -- takes a sustained investment in sophisticated integrated marketing. “We are in an environment where cost-conscious students can easily research online degrees at their leisure by clicking in seconds pass dozens of university offerings,” says Best. Standing out in a crowded field is crucial to success. Take nursing for example. For its partner universities, Academic Partnerships’ extensive field sales organization has established relationships on behalf of its partner institutions with almost 1,000 hospitals and healthcare systems across America and 400 community colleges, producing a recruiting advantage at a lower cost than can be achieved by the college or university alone. This field sales activity paired with a comprehensive marketing plan that combined digital and traditional media, has resulted in the nursing program of one partner university becoming the largest among public universities; it started with fewer than 150 students in its on-campus program. In fact, in 2014, Academic Partnership recruited 25% of all students enrolled in online RN-BSN programs in America’s public universities. Integrated marketing – not tuition discounts – was the key. According to Best, “to get there, we produced 68 million digital impressions -- 72% of all Google searches for an online RN-BSN.” Of the online nursing programs launched by Academic Partnerships, enrollment has increased by between 600% and 2000% in the first two years. “A big part of achieving this scale has been a 90% persistence rate from course-to-course by nursing-student recruits,” says Best. The result is that Academic Partnerships now supports more online nursing graduates than all other service providers combined. Moving forward, sustaining the vitality of a higher education institution will require a fresh perspective, with innovative means of delivering higher education and an increased understanding of how to market to students’ needs, resulting in new sources of revenue. “Smart and effective marketing is a much more sustainable strategy for

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