From “Churn and Burn” to “Learn and Earn”

From “Churn and Burn” to “Learn and Earn”
Chris Burton
Vice President of Business Development, Greenwood Hall

Look to the right of you. Then look to the left of you. One of you will not be here by the end of the year…” said many college deans during freshman orientation over the years. Today’s retention and graduation statistics remind us of this unfortunate reality in today’s higher education landscape. And while college completion remains a priority among politicians, large foundations (e.g. Gates, Lumina), and local economic development groups who need more trained individuals to fill jobs, students are not the only ones suffering.

Inside Higher Ed’s 2015 Survey of College and University Presidents found that institutions statistically fall into 1 of 3 groups regarding confidence in the sustainability of their institution’s financial model over the next 10 years. Approximately 1/3 of those surveyed agree or strongly agree that their institution has a sustainable financial model. Another 1/3 of presidents were neutral, while the final 1/3 expressed strong concerns that their institution would survive beyond 10 years. Alas, not only are students suffering the effects of poor graduate rates, but many of our great institutions are too.

In December 2015, my company conducted a “first of its kind” study of foregone tuition among Council for Christian Colleges and University (CCCU) member schools. The results revealed a significant impact on revenue. In aggregate, tuition losses for the 115 schools in our study totaled approximately $1.3B annually or about $11.0M per school. We made no attempt to include the cost of recruitment, room, board, fees or the lifetime value of alumni giving.

The solution? Retention is where real revenue is created. And a key factor in retaining students and growing revenue is not simply admitting more students, but in keeping the ones already in your midst. Or, as Neal Raisman says, “It’s time for schools to shift from admissions-concentration to an admissions AND retention focus; from churn and burn to learn and earn.” In this paradigm shift we find the truest definition of student success, where students graduate and institutions sustain their operations and accomplish their mission.

Brookings and College Rankings

Brookings

Brookings and College Rankings
Bill Bradfield
Executive Vice President of Business Development, Greenwood Hall

A good friend of mine put me in touch with a contemporary study of College Rankings done by the Brookings Institution in 2015.  The report, which is both scholarly and weighty, makes a case for changing the traditional rankings (such as US News & World Report) with a methodology that is based on economic outcomes of its graduates.  The report (http://brook.gs/1RHNKBh) makes a case…  if only for the consumer, that schools can be ranked based on a formula calculating a school’s value add as a function of actual outcomes of alumni less predicted outcomes of alumni.  And those outcomes are almost totally economic outcomes.  The Brookings folk make the case for economic outcomes as important by stating, “Earnings are a major and important measure of well-being; earnings data are relatively precise and easy to obtain; and income and other labor market outcomes have have important civic and public policy implications.”

At its very introduction, the report states, “It pays to get a college degree.  Compared to typical individuals with only a high school diploma, typical bachelor’s degree holders earn $580,000 more and associate’s degree holders $245,000 more over their careers.”  While this concept is not new, it is new in terms of the basis of college ranking.  The new approach is both revolutionary and potentially threatening to traditionalists who prefer a “softer” set of criteria…  Are you listening, US News??

The study used five key quality factors to underpin their work:

  • Curriculum Value – Based on the earnings of people who hold degrees offered by the college.
  • Alumni Skills – Based on the average market value of skills listed on alumni resumes.
  • STEM Orientation – Based on the number of graduates prepared to work in STEM occupations.
  • Completion Rates – Based on the percentage of students who finished their degree within 2X the normal time… 8 years for a 4 year degree and 4 years for a 2 year degree.
  • Student Aid – Based on the average level of financial support given by the college to the student.

Admittedly, this analysis doesn’t even begin to approach the depth of the Brookings report.  It caught my attention since it informed a suspicion of mine that, as college costs increase and outcomes become more uncertain, consumers (Moms, Dads, and students, for beginners) will become more discerning about where to spend their dollars.  Maybe the new Brookings methodology will help inform those career and spending decisions, particularly the inclusion of completion rates as a key criteria…  Would you spend $100,000 for an education if the school could only promise a 3 in 10 probability of chance of graduation and only with skills that have limited market value?  Tough question.

So, I looked a little further and found that Brookings ranked 5,000 two and 4 year schools using the methodology (http://brook.gs/1ZnmiHL).  I immediately used the listing to look up my Alma Mater, Lafayette College and found it had scored an impressive 98 (on a scale of 0-100).  That put it ahead of Penn and a solid 8 points ahead of Dartmouth College (the school that turned down my application back in 1966).  😉  Check out the listing, it’s chock-full of surprises.

How Can Colleges and Universities Persuade Prospective and Former Students to Reengage With Their Institution?

dropout factory

How Can Colleges and Universities Persuade Prospective and Former Students to Reengage With Their Institution?
Chris Burton
Vice President of Business Development, Greenwood Hall

You need tough skin when it comes to recruiting for your institution. No matter how well you craft your engagements or strategically place messaging and media, many of your prospects will express interest initially, but then become inactive (think of all those “old leads”). Or worse, they’ll enroll and then step out of their education for one reason or another (drops, stop-outs, those “taking the year off”). It’s just the nature of recruitment and retention in today’s higher education market.

However, inactive prospects and former students don’t have to be forsaken forever. Re-engagement campaigns can be a great way to reconnect with prospects and former students, and start moving them back through your funnel. I know a thing or two about reengagement from my years of experience in working for colleges and in the EdTech industry. I am ready to help find and enroll those prospects and former students whom you’ve already invested in.

Re-engagement campaigns are not just a simple one-and-done email blast to your inactive prospects telling them to finish their application, or a reminder of the deadline to reenroll for next semester. You need to invest time into planning an engagement campaign that recaptures their motivation for graduating. The most successful reengagement campaigns succeed because they involve a highly personalized touch that says we’re here to help you reach your educational goals.

Here are just a few ways you can set up programs to persuade your prospective and former students to reengage with your institution:

Incentivize
Alright, let’s be honest. I’m suggesting you offer an “incentive.” Although this is certainly not the most elegant solution, it’s often the most likely to get you results. It’s hard to say no to a special promotion, fee waiver or prioritized treatment. Remember, incentives don’t need to take a monetary form either. If you segment your lists, you should have a good idea of how to appeal to their unique circumstances or interests. Offer a piece of relevant content or suggest an online open house that falls in line with their circumstance.

Show That You Care
This is another hard one for prospects to ignore. If you cut through the impersonal nature of mass email campaigns and say, “Hey, we miss you. We want you back,” you have a good chance of eliciting a positive response. In addition to getting your students to take notice, it might also help them to see beyond your brand to the real people that are trying to reach out to them.

Empower Them
If the two ideas above seem too indirect for your style, why not simply ask your inactive prospects if you can change your contact preferences to better suit their needs? Obviously, you can’t tailor a campaign to each prospect and former student, but you can certainly send them a link to their email settings to adjust the type and frequency contact, or to give them the option to be removed from your list. Your audience always appreciates being given more control.

Touch People
Studies have shown that students attrit because they believe that the school doesn’t care about them and they get little, poor or no service. Make sure that your reengagement strategies have a high degree of personal contact, not just a “counseling function” or “center” where prospects and former students can “ask” for help. Offer help and support directly to them from professional counselors!  Pick up the phone and call them.

Next time you are feeling down about the lack of activity in your prospects, don’t despair. Instead, use a re-engagement campaign to give them a gentle nudge back in the right direction. You’ll be surprised to see how many prospects that you thought were goners were actually just waiting for you to come back around and engage them.

A Sobering Thought…College May Not Be Worth It?

drunk_homer

A Sobering Thought…College May Not Be Worth It?
Bill Bradfield
Executive Vice President of Business Development, Greenwood Hall

The average return on going to college is falling…  So begins a brief Goldman Sachs Global Investment Research paper from December 2015.  It’s a sobering warning, particularly given some of the equally sobering statistics:

  • For typical students (whoever they may be) the number of years to break even on the cost of college has grown from 8 to 9 years since 2010.
  • If current cost and wage growth trends continue, 18 year olds starting college in 2030 will only start making a positive return when they reach age 37.
  • The gap in alumni earning between colleges in the 99th percentile of scores (SAT as the proxy for selectivity) and those in the 99.9th percentile is as big as for those in the 1st percentile and the 20th.
  • Since 2009, the cost of college fees has grown 10.9% in real terms versus a .9% and -.1% change in wages for high school and college graduates.
  • Graduates from the bottom 25% colleges earn less, on average, than high school graduates.

So, all of this is “sobering” but it does foretell a potential trend in higher education…  that of a rise in consumer awareness, power and choice in higher education.  Will consumers begin earnestly looking to alternate places to get their education?  If earnings potential is low at the bottom 25% of colleges, will consumers make a conscious decision to seek another school, or another path?  Will they make such decisions about schools that have a lower probability of graduation (the national 6-year graduation rate is currently at a startling 52.9%!)?

With all the changes and challenges facing higher education, consumer awareness and threats from non-traditional suppliers (like corporate education and on-line surrogates) just add to the pile.  Education executives will need to be visionary, creative, agile and most importantly, swift in their responses to the threats.  Education is worth it.  The question is, will it be traditional colleges who provide it?

http://www.goldmansachs.com/our-thinking/pages/macroeconomic-insights-folder/what-if-i-told-you/report.pdf