It wasn’t entirely unexpected, but the anger arose faster and more intensely than anticipated when I referred to prospective students as customers in a conversation about recruitment.
“Our students are not customers, and talking about them that way cheapens what we do,” came the reply. “We aren’t some shady business hawking worthless stuff to the masses. We educate. Our students are more than just numbers.”
It wasn’t the first time I’ve stepped into that discussion. I know colleagues, too, occasionally borrow a business mindset and are even crass enough to talk about higher education offerings as products.
Because it’s true. And it’s hardly an insensitive or soulless effort to commodify the transformational character of higher education. Quite the opposite.
Approaching higher education as a business helps everyone in the industry do something critical yet often taken for granted amidst the constant state of crisis facing higher ed—put the student (customer) and the student’s (customer’s) persistent relationship to the institution above all else.
From the highest point of the ivory tower to the lowest rung of the bottom line, there’s no argument. Students are valuable.
Student lifetime value, or in business language, customer lifetime value, is a common metric for the total worth (primarily monetarily) a customer has to a company over the span of their relationship—how much revenue each customer brings in during their lifetime.
Higher education uses tuition revenue to define a portion of this metric at its most basic. Each academic term, students pay an average amount for the education and services they receive. That amount, less the cost of recruiting, enrolling, and providing education and services, gives you revenue. In essence, more students and/or higher average tuition equal more money coming in. It’s simple enough, and it’s worked so far for many schools. Though it’s an equation that may prove challenging for many as demographic numbers shift and schools wrestle with reimagining how they deliver education.
But, just as in other businesses, there are layers of complexity to understanding the actual lifetime value of a student and the spectrum of things that influence potential value over time. Within those layers and the dimensions they introduce—recruitment, yield, retention, graduation rate, philanthropy, and so on—lie the most compelling benefits of the metric for higher education, and most importantly, for the student.
No complicated math required: The best way to make students more valuable to you is to become more valuable to them—before, during, and after enrollment. Don’t @ me.
Sprawling Social Networks
Enrollment pros often talk about prospective students, parents, and influencers as key segments for attention and interaction—at least during the recruitment phase. It’s important during that two to three year cycle, but these same groups, and the social tendrils they bring, remain important before, during, and after. In this sense, the social network of a prospective student adds incremental lifetime value to your institution, provided the student has the kind of valuable experiences worth sharing.
According to the 2017 Customer Service Barometer commissioned by American Express, people share negative experiences more readily than positive ones—they tell an average of 15 people about bad experiences, and 11 about good experiences. So the stakes are high. The kinds of things shared hardly fall within the terms of engagement dictated by an institution’s enrollment, marketing, or alumni office’s output and regular business.
For example, think about a prospective student who shares their thoughts about a recent campus visit on social media. (You’re closely listening to find these conversations, right?) So you engage with a quick follow up to see if the student needs anything else, and maybe even offer to send a sticker or T-shirt, something fun or helpful for the student (i.e., not a glossy info brochure). One extra step could give this interaction the kind of ripple effects that improve lifetime value—you take a minute to look at the user’s other posts and see they often post selfies with their younger sibling. So you send two stickers or T-shirts with a note. You now have two excited prospects, albeit different cohorts, sharing the positive experience with a broader social network. For $20 in gifts and mailing, you’ve created the potential for twice the lifetime value. The goal isn’t necessarily to convert all of these prospects to customers, but to provide experiences that keep them excited about your institution for the right reasons so, even if they don’t covert, they have the tools to convert others. It’s not immediate, so these efforts are rarely captured on the balance sheet, but they matter. And it’s the way all work in higher education should be.
What can you do to make the experience better for the student? Limiting thinking to the traditional cycle only limits potential for long term, lifetime value.
Before They’re Prospects
Plenty of institutions smartly invest in K-12 programs, community outreach, research, and many other dimensions of public good. Some consider it part of longer-term brand building and pipeline development. Schools doing great work and providing meaningful opportunities that benefit individuals, communities, and causes are only a good thing for the world. The added benefit for schools is that the work helps form positive perceptions and associations early, which ultimately influences college choice. Don’t underestimate the impression that small moments can make, too. Finding opportunities to celebrate good work and the people who value it naturally broadens the prospect pool. A quick congratulations on social media goes a long way, so be sure to listen for opportunities and consider what other activities, initiatives, and content you can offer that helps people in their lives.
We Got ‘Em
Many years ago, I cynically described the stages of higher education engagement as “recruit, enroll, ignore, solicit.” While I’m sure some students still feel this is accurate, especially as they continue to receive annual giving solicitations a few months after graduation, the industry’s emphasis on improved student experience is welcomed. Enrolling students is only the first part of the equation. They then spend three to six years with your organization, absorbing the education, services, and experiences you provide. Retention is a real challenge here, and losing students (“churn” in the business) obviously lowers lifetime value. The absolute best strategy for increasing lifetime value, during and post enrollment, is to provide exceptional experiences that are without a doubt worth the cost of attendance for students. Cultivate trust at every turn, if for no other reason than that current students sharing their experiences can impact prospects and alums, families and friends, the community, and the public. It’s a lens that changes how you look at your work at every level of the business.
Right now, as colleges and universities wrestle with the uncertainty of a pandemic-influenced fall and announce clever plans to open, partially re-open, and offer some sort of online instruction to keep tuition dollars coming in, the most critical question must be answered first. How are we creating more value for our students? Do students trust that this is your motivation, or do they see an institution trying desperately to stay afloat at the expense of benefit for students? Trust isn’t tenured, so there’s no guarantee you’ll keep it unless you work to do so. And retaining trust is critical to adding additional value over time. As students graduate to alumni, how will they remember their experiences? What causes does your institution push that alumni want to support? Will students remember that when they needed you, you helped them with the full force of your institution, not simply asked them to help you perpetuate it?
Not only do you need to retain students through graduation, you want them to continue to provide value to your institution well beyond their tuition commitments.
Every single institution I know has at least a few alumni cohorts who have a less than stellar relationship with the institution. Maybe it was a financial crisis that shaped the student experience for a few years, or a series of administrative scandals that eroded trust. Whatever the cause, it costs the college over the long term, well beyond any reputational hit or temporary surge in transfers when alumni have no interest in giving back. Looking at the average gift, whether by cohort or individual, adds additional nuance to the concept of lifetime value. And, at its best, influences decisions now to ensure trust is maintained and cultivated for a lifetime.
Lifetime value must be mutual to matter. Not only should customers have value for you, but also you for them. Make this your business.
Tim suggested social listening as one way to find conversations that will help increase your value to students. If you need some tips on getting started, these free tips and tricks can help.
This post originally appeared on Campus Sonar's Brain Waves blog.