For Struggling Private Colleges, Program Differentiation is Essential
Strategic Insights Blog | October 16, 2014
One of our most consistent findings from past studentPOLL issues shows the willingness of students to stretch financially to attend institutions of particular quality. Both our 2012 and 2010 issues — published during worse economic times than present day — revealed that at least three-quarters of students would consider a school they thought too expensive because it offered “strong academics in a particular field of study,” or the school was “a place where you can fit in and feel comfortable,” or it had a “prestigious academic reputation.”
These findings offer some perspectives on the second annual survey of higher education institutions conducted by The Chronicle of Higher Education, the Council of Independent Colleges, and the American Association of State Colleges and Universities. This study found that 53 percent of private colleges did not meet enrollment goals over the past year. Of these institutions, many reported losing students at the deposit stage of enrollment.
Many of these prospective students are no doubt aware of the sticker price and potential net price at both the inquiry and application stages, yet they are compelled to move forward with the application process. However, at the matriculation stage, the institutions themselves, particularly those with less than 1,500 students, may not have sufficiently distinctive programs or market positions to entice students to stretch financially.
To be sure, some factors are simply out of these institutions’ control: as salaries continue to stagnate and federal aid struggles to keep up with inflation, more families are going to be priced out no matter what an institution does. But corresponding studies indicate that private institutions might be struggling to provide comparative value relative to less expensive public universities. A recent Pew Research Study showed that public and private school graduates had equal life satisfaction in categories related to family life, financial status and job stability. For many prospective students, these findings provide grounds for a more rational choice. Given a decision between private and public colleges that lead to equal life outcomes, one is more likely to choose the less expensive option.
What’s left for struggling private colleges to do? They can try lowering tuition, but that has brought mixed results for many institutions that have attempted it. Instead, many institutions in the annual survey survey reported that they intended to do one of the following: improve enrollment management operations, start new programs to attract students, or put more resources into marketing.
Seventy percent of private institutions reported their intention to improve enrollment management, a tactic with diminishing returns in current market conditions. An enrollment manager cannot change the nature of a weak product, launch new academic programs or create other distinctive educational initiatives. Only the president and senior academic leadership can make those kinds of substantive changes.
Another 53 percent indicated they would beef up marketing and communications efforts. But without a distinctive differentiated program and educational experience to market, these efforts are likely to be equally futile.
Our own experience with clients and research studies demonstrate almost without fail that marketing efforts based on distinctive programs provide the best hope of changing the application and matriculation choice behaviors of students. We recently highlighted the Colorado College Block Plan and its sustained success in differentiating the college, providing a quality educational experience aligned with the College’s mission and culture, and raising the school’s national profile and prestige. We’ve seen this echoed in the recent New York Times article on how colleges with particular programs or specialty areas of emphasis have hidden advantages and strong drawing power with certain kinds of students. For those private colleges that are struggling or seeking competitive advantage, a distinctive, market-informed programmatic focus might be the best (and only) way to endure the profound challenges now and in the future.