Securing Sustainable Growth: Maximizing ROI through Price & Aid Analysis at Providence College

THE CHALLENGE:

At the onset of the Great Recession, Providence College, like many other colleges and universities, faced revenue and positioning challenges. It was vital to the long-term success of the College that campus leadership deliver on central elements of the new strategic plan, including significant investments in academic program development. Cost of attendance, however, had fallen sharply relative to the institution’s competitors, a hurdle that loomed large as the unfolding recession intensified price sensitivity for college-bound students and families.  

OUR SOLUTION:

Working closely with Providence College leadership, we conducted a study of prospective undergraduates that included a focus on setting price within a comprehensive positioning platform. In our partnership, we developed a research agenda designed to differentiate the institution within its competitive set and maximize ROI in the execution of PC’s strategic plan. The study examined price elasticity along multiple dimensions and determined, counterintuitively, that a substantial increase in price was feasible for Providence, if combined with customized calibrations in student aid. It was a bold move that promised considerable growth in net tuition revenue that the College needed to support key strategic objectives.

Raising price in a volatile economy was a tough call to make. But with solid research to back up their decision, leaders at Providence agreed that the College needed to move forward with strategic investments, or risk losing high-ability students and further ground in the market. John Sweeney, their newly-arrived CFO, remembers thinking about a dramatic price increase: “What am I getting into?” But he now sees the engagement as “a turning point” that strengthened PC’s reputation and consolidated their unique competitive advantage. At a time when other institutions were tightening their belts, this approach set the stage for Providence College to experience 10 straight years of net-tuition growth (even during the COVID-19 pandemic)—providing the college the revenue needed to hire full-time faculty in multiple divisions, build-out signature programming, and invest in an ambitious infrastructure plan to fully support students’ academic and residential experience. 

Since this engagement, Art & Science has partnered with Providence College on a number of additional studies related to its position in the marketplace and its financial aid packaging.