With 34% of colleges nationwide not meeting their fall enrollment goals come May 1, it’s clear that success in this market demands big thinking, not incremental change.
In the 15 years I’ve worked in college enrollment, I’ve seen a number of schools buck the trend, by not only meeting enrollment targets, but knocking their goals out of the park. For example, consider the enrollment results of the four EAB Enrollment Services clients below:
These schools went well beyond simply having a good year; they fundamentally changed the trajectory of the college or university. While there is considerable variation in institutional profile and specific tactics employed, the schools shared one important factor: They realized they were not going to save their way to success. They made bold investments in market expansion to think big and change their enrollment paradigm, resulting in tremendous returns.
At EAB we believe in thinking bold and our clients do, too. However, significant market expansion isn’t easy and it isn’t obvious—which is likely why more schools have hesitated to really think bold. As I consider colleges and universities that have achieved outsized results through aggressive growth, I’ve observed four lessons for successful market expansion.
1. Ensure you’ve saturated your primary markets
I have found that for many enrollment leaders, presidents, and boards, expansion into new markets represents an exciting and attractive option. This is particularly true for schools located in areas with declining demographics and for those seeking to shift their incoming class profile.
However, local markets often include overlooked fertile ground, even in areas with challenging demographic factors. With 70% of students attending schools within 100 miles of home, for most colleges, local markets prove to be far more productive than new markets. In the schools highlighted in the chart, enrollment leaders ensured optimal saturation and penetration in current markets before seeking growth elsewhere. When scaling up your targeting strategy, be sure that you’re not overlooking high-potential opportunities in your own backyard.
2. Don’t let efficiency be the enemy of productivity
Enrollment leaders are often asked to meet a variety of class mix and revenue goals while keeping recruitment expenditures at an absolute minimum. While it’s important to be a good steward of institutional resources, it’s nearly impossible to deliver outsized returns in pursuit of efficiency alone. To achieve ambitious goals, enrollment leaders must shift institutional focus away from savings and efficiency to productivity and return on investment.
Each of the schools featured above in the table invested significantly in expansion, yet each generated at least five dollars in return for every dollar invested in expansion initiatives. For all schools, a substantial part of that additional spend went toward generating more inquiries. Most schools also put additional resources toward application generation and yield management. The following chart compares the increase in these schools’ recruitment investment, relative to the subsequent increase in returns in net tuition revenue. Note that this accounts only for freshman-year net tuition revenue; accounting for subsequent years to graduation would exhibit even higher returns.
More importantly, these kinds of investments can yield “returns” beyond just financial. For example, in addition to an $8 million increase in freshman net tuition revenue, Institution C achieved a 14-point increase in average SAT score, a 15% increase in out-of-state enrollment, and nearly doubled the number of under-represented minorities in the freshman class.
A well-designed expansion initiative is an effective way for schools to meet a variety of enrollment goals at the same time, whether they’re related to overall volume, class mix, or revenue. However, it’s important to keep in mind that as a school pursues expansion initiatives to either new geographic markets or student segments, standard recruitment conversion metrics (such as yield rate) will likely go down. To ensure long-term institutional support of expansion, enrollment leaders should be sure to segment expansion initiatives in order to measure and report them separately. In addition, they should ensure that institutional stakeholders understand the inverse relationship between aggressive recruitment outreach and enrollment yield.
3. Expanded targeting strategy should be informed by analytics, creativity, and underlying logic
While expanded targeting is essential to this think bold strategy, it’s not as simple as just buying more names. And while complex models and algorithms are an important component in identifying new markets, expansion strategy must be supported by underlying logic.
For example, Institution A based their expansion initiative on the notion that their markets shouldn’t be defined by, or limited to, geographic markets. Rather, targeting strategy should defined by student type. This framework was supported by a number of logical arguments about why their school had the potential to attract a significant volume of students outside of their historical geographic markets:
- The school was located in a city with an international airport, facilitating access for students from across the country.
- Their campus was situated in an appealing geographic location.
- They already had some national recognition.
Based on this set of assumptions, they significantly expanded targeting strategy on a national level by focusing on student type, which ultimately resulted in the impressive 14% increase in enrollment and 19% boost in net tuition revenue.
The exact approach for determining expansion strategy will vary by school. And national expansion is certainly not necessary to see extraordinary results. For example, for Institution D, the right approach was to saturate markets within a five-hour drive, with limited outreach beyond the driving radius.
4. Don’t overlook the logistics
Once you’ve decided which new students to target, be sure that your operations and processes are ready to handle the increased inquiry and application volume. Schools that have been able to reap the benefits of expanded targeting have ensured that their staff and systems were prepared, and that they had broad buy-in and support for the new strategy across the institution.
A think bold strategy can seem out of reach, since it requires significant investment and a fundamental shift in established recruitment and enrollment paradigms. However, if approached the right way, it can produce results that are well worth the investment.