Why Market Share—Not Demographic Shifts—Should Drive Your Recruiting Strategy

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0:00:12.1 Speaker 1: If you haven't heard the warnings to beware the demographic cliff, you are
either brand new to working in higher ed or you simply haven't been listening. On today's episode,
our guests suggests that while the dangers of the demographic cliff are real, shifting demographics
probably aren't having nearly as big an impact on your ability to hit enrollment targets today as
direct competition from other institutions in your state and region who are targeting many of the
same high schools that you are. Our guests share tips on ways to first find out how your institution
is trending relative to competitors in terms of market share, and then to shift your recruiting strategy
accordingly. Thank you for listening and enjoy.

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0:01:02.9 Larisa Hussak: Hello everyone, and welcome back to Office Hours With EAB. My
name is Larisa Hussak, and I'm a director of research on our Blueprint for Growth team, which
investigates the future of the Higher Ed Enrollment landscape. Today, I'm joined by one of my
colleagues and enrollment experts, Brian Schueler, to talk about some of the most important trends
shaping the enrollment landscape. Welcome to the podcast, Brian.

0:01:25.9 Brian Schueler: Thank you, Larisa. Glad to be here.

0:01:29.6 LH: So, for the past several years, a lot of the conversation in the domestic
undergraduate enrollment space has really centered around the idea of demographic shifts,
specifically the fact that low birth rates observed during the Great Recession would result in a steep
drop in 18-year-olds heading to college beginning around 2025. We saw headlines around this
demographic cliffs and institutions across segments, sectors and regions all seem to be focused on
developing an enrollment strategy that would allow them to weather this impending storm. So
Brian, let's start here by setting the scene a bit. I'm curious, how have you seen this focus on
demographics and the demographic cliff, play out in institutions enrollment strategy. What have
schools really been focused on?

0:02:17.3 BS: Yeah, certainly it's a great question, and it's one of those challenges that many people
are familiar with, the demographic cliff coming, but some of the answers to how you address it can
be a little bit challenging. I think intuitively, many of our partners who are in areas where they're
maybe already seeing fewer 18, 19-year-old undergraduates or are anticipating declines coming in
the future. Now, the intuitive answer is sort of, “Well, let's look somewhere else perhaps.” And
we're hearing a lot of institutions that are saying, “Well, let's look at some of the states where those
projections are more positive.” Folks going to and recruiting more in the southwest or in California,
and some of it just... well, these are some large states, there's a lot of people there, so hopefully we
can get kind of a toehold in some of those markets. So, we're hearing a lot of institutions that are
and a lot of our partners saying, that's what they're looking at, they're trying to go somewhere else
essentially, and get away from maybe a declining market. In another way, we're also hearing
institutions look at different populations to serve. So hearing a lot about institutions that...

0:03:35.0 BS: And I've heard a lot of partners say, Well, we're facing demographic decline, and so
we're looking at really investing and expanding more in our adult and graduate serving programs.
And this is really common, actually. We did a survey of strategic plans a few years ago, and we found that 75% of university strategic plans listed adult and graduate education as big priorities and
for larger institutions, that might make a lot of sense. Your research universities, obviously, that's an
area where you might expect that to be, but one thing that surprised us is that 56% of the smaller
private and regional public institutions we work with, actually also were looking at adult and
graduate Ed, areas they really hadn't traditionally been playing in. So we are seeing this... One of
our partners running in this way. I think broadly, it's leaning away from local undergraduate
markets and leaning towards farther flung areas, whether it's different populations or geographically
farther flung.

0:04:41.8 LH: That's really interesting, and I've definitely heard more than a few institutions,
particularly those in the Northeast, look longingly at the map and areas like this out in the
Southwest for recent high school grads, or look at the growing number of adults without a college
degree as is the new frontier in enrollment. But actually, some of your recent research has suggested
that that strategy chasing demographic growth, the brand new markets is actually not the best way
forward. Why is that?

0:05:14.8 BS: Yeah. So, I think the first point with why you might not want to be leaning away
from your local undergraduate markets, even if they are seeing decline. The first point is just that
recruiting away from campus is hard. I think we all know this. If you're in enrollment, you know
that, well, if you're gonna go to farther states, it's gonna be a little more difficult, but one of the
things that we've actually found is it's not just a little more difficult, it's a lot more difficult.
Recruitment messaging and contacts to prospective students are nine times more cost effective if
they're done within 25 miles of campus compared to beyond 500 miles from a survey of some of the
partners we work with. And so it's not just that it's a little bit more difficult to recruit a long ways
from campus. It's very, very difficult in some markets. Now, this isn't the case if you're really, really
well-known nationally, but very few institutions are lucky to have a name brand that stretches all
the way across the country, even some that are very selective.

0:06:23.6 BS: I think the second aspect though that I wanted to touch on is a little more of a... this
was more of a surprise to me because one thing that we found as we were researching enrollment is
that market share is volatile, and so the amount of students, the share of students that each
institution gets even from their local markets can shift quite a bit, and this surprised me because
when I came into this research, I assumed lots of these institutions are leaning away from their local
markets due to demographics, and we hear all of the time about institutions that have been around
for hundreds of years, very steady, you think in your mind like this is pretty much... they have
everything very steady in terms of their enrollments. I expected that the share of students that they
would get from their local areas would be rock solid, really wouldn't change if you're the University
of a certain state, you get a big chunk of that state's enrollments and that's not changing. And that's
not true. When we looked at the numbers, we found that these shares of the student shifts quite a
bit, and that changes how we should think about the strategy there. It's not simply that, Well, we're
in a declining market, our share is always gonna be 25%, and so we need to get somewhere else.
You can change that share and that changes and adds another essentially thing to be looking at
when you're adjusting to and looking at your enrollment futures.

0:08:01.9 LH: So it sounds like what you're saying here is, even in areas that may have a stable
demographic outlook or stable demographic trends, it's possible, and perhaps even often the case
that institutions still see a lot of volatility in their market presence or in their enrollment. Is that
correct?

0:08:21.5 BS: Absolutely. Yeah. Much more volatility than even I expected for even the
institutions that I would have expected are super stable. And for institutions, when we're looking at
private institutions, particularly with regional privates, even a little bit more volatility in some
cases.

0:08:39.2 LH: That's really interesting, and you mentioned this idea of share and market share, and
so for folks who may be unfamiliar, when you talk about market share within a given market, what
do you mean by that?

0:08:53.0 BS: Yeah, and that's a good point because it is a little bit of a technical, more business-y
term, and really what we're referring to there is, if you consider all of the students who come from a
certain area, in most of the analysis we've done, it's been state by state, because that's the data that
we can work with. But let's say the number of students in Ohio, for example, the total number of
students who come from Ohio and go to any university is the market, we might say, and if you're an
institution, the percentage of those students who go to your institution is your market share. For a
lot of institutions, it's pretty small. We're often talking about less than 10% from the majority of
institutions. In many institutions, maybe less than five or less than 1%. There's a lot of institutions
that enroll folks, and so that sort of the market share is your share of all of the students who come
from a certain state, and that's really what we're talking about when we're looking at how market
share is shifting.

0:10:02.5 LH: Got it. And so when we think about these institutions who have seen large shifts in
their market share, what are the sort of factors or forces that are driving those shifts? Why might an
institution see an increase or a decrease in their market share over time?

0:10:17.5 BS: Yeah. That's one of the areas where it can get pretty complicated, but boiling it all
down, it's competition. When students are deciding where to go, oftentimes it's between two
different institutions and for market share, there's only a 100% of the total number of students from
a state, so it is by definition a zero-sum game, and so it's largely competition between two different
or more institutions. We do see a decent amount of the competition that shaped and changed by
external factors, policy changes, how some institutions are reacting to shifts in the market and
affecting other institutions. One of the big, broader level shifts that we've seen is largely for your
public institutions that have been growing their market share and trying to reach out, especially
your big state flagships growing and expanding their market share, and that's largely because we
think because of cuts in public funding, these institutions with fewer public funds are now looking
to expand their enrollments and expanding their market share to make up for that, but it is at the end
of the day, a competition game.

0:11:46.5 LH: Got it. And so when we think about some of the forces shaping the current
enrollment landscape and the future enrollment landscape, obviously we've touched a little bit on
demographics already, and that's dominated the headlines in terms of predominant environmental
forces, but you also bring this idea of market share shifts and competition to this conversation as
well. So how might you rank these or prioritize these two different environmental forces, if you
were the head of an institution's enrollment strategy? Where should they be focusing most of their
attention and resources right now?

0:12:24.7 BS: Certainly, yeah. I would say that you have to be looking at both. Both of those factors, they exist together. One thing that we did is we actually looked at and tried to measure
what, whether it was demographics or market share, what the impact of each of those was on
average for the individual institution, and so looking at all of the different institutions across the US
from 2008-2018, and thinking about their... looking at how their enrollment changed and how much
of that was explained by demographic shifts and explained by market share, and we actually found
that market share explained about two-thirds of those shifts, so it's a big factor. Certainly though,
you have to be still looking at the demographics because that is shaping both the competition in
your area, and it's also going to be shaping how other institutions are going to be thinking about
your region. Are more institutions coming in? Maybe they're going to be leaving and providing a
better opportunity for you to compete in your local area, but both play a big role, but I would say
you can't be visualizing and understanding your institutions enrollment, future and the future
strategy, if you don't have a picture of both.

0:13:46.0 BS: And I think many institutions understand the demographics, but the market share
piece is something that is newer and I think an important element for institutions to be tracking, to
be looking at, and to be thinking about as they're building their strategy for how they're going to
move forward.

0:14:03.3 LH: Absolutely, and to your point, it sounds like there's an interplay between these two
forces and how they may interact and shape an institution's enrollment outlook, but just to circle
back to the point you made. Two-thirds of enrollment shifts being due to market share is a pretty
significant number, and to your point, is potentially the magnitude that most institutions don't
realize, and so this to me seems to represent a pretty significant paradigm shift in terms of
enrollment strategy. Instead of just asking, Where are the most prospective students? You're
suggesting that that institutions instead ask, Who are our biggest competitors and what are they
doing in our current markets? What other questions do you think that institutions need to be asking
in order to stay on top of market share?

0:15:01.7 BS: Yeah, the competitor thing is a very important one, looking at what competitors are
doing, but I think also... You don't necessarily need to be looking at other institutions, the more
you're focusing on the students and really keeping on top of what students are looking for, how their
preferences are changing and shifting, being able to adapt to changing student preferences is going
to be a fantastic way to make sure that you're getting on top of market share, 'cause ultimately it's
about being a institution that students want to go to, and the students find really attractive and
interesting, and I know that you've done some work looking at how student preferences and student
interests have shifted over the last five or six years, and especially with the pandemic, to be more
experiential and focused more on sort of that immediate experience that they get in an institution in
a little less, or perhaps relatively less on the long-term sort of promise of college that's been a little
more table stakes anymore, if I'm maybe representing that accurately.

0:16:13.4 LH: That's right. We definitely saw a shift, particularly over the past year in students
prioritizing some of those, whether it's short-term experiences or upfront costs when we're making
that college decision, and so it definitely seems like an important input for institutions who wanna
grow their market share is understanding exactly what their customers, their students are looking
for.

0:16:36.7 BS: Most certainly, and that really stretches, it turns the enrollment question, and I think
it takes enrollment strategy across the entire institution too, 'cause it really requires the entire institution to be building that experience and building that really attractive offering for students. I
think a great example that we came across was one institution in... an area of the US, it's already
experienced a demographic decline, and they were a smaller private university, and so despite
facing this really strong demographic decline over the last decade and one that's projected to
continue through the next decade, they've actually been able to see enrollment increases, and that's
mainly because they've doubled down on their local market, a place that's... even though there's a lot
of things going against them, by focusing on the student population, the prospects in their area,
really thinking about, this is an area with a lot of first generation students, and so re-upping their
offerings and their marketing material and how they're reaching out and connecting with these
students early, they were able to see increases despite that by expanding their market share and by
catering to the unique needs and really getting more of a relationship with this area, with these
students and their needs, and so just one example that we've seen of a lot of institutions that are
looking at market share and thinking about that and adjusting their strategy accordingly.

0:18:12.4 LH: Absolutely, and that reminds me of some of the stories we've heard. I think at the
beginning of the pandemic, when everything went virtual, we heard stories from some institutions
who were optimistic that this move into a remote environment, particularly in the recruiting space,
meant that they would be able to reach some of these far-flung destinations that perhaps before had
been too expensive. But I think over the past several months, we've seen a little bit of a shift
towards what you've just described, as institutions come to realize that even when they can
technically reach far off places via remote recruitment, their core opportunities, their biggest
payoffs are in their local markets where their brand has the best recognition, where they can
establish relationships with local communities and students, and so it seems like what you're
suggesting is that moving forward, despite increased opportunities to expand institutional reach, the
best investment opportunities are really in more local primary markets. Is that right?

0:19:19.3 BS: It is. Yeah, and I think that we would... In most cases, there are some exceptions, but
in most cases, for institutions, your local market's gonna be your best place to be investing and
working to develop those relationships and build your market share, you have the advantages there
as an institution, people might know a faculty member from your institution, they've certainly heard
of you if they're real local, and it's a lot easier for them to encounter and recognize the experience
and that value that you provide, compared to if you're trying to reach someone who's long ways out
of state who maybe has never heard of you before, as an institution, you have to go from zero to
100 for those students, those prospects really, really quickly, and that's just tough to do, especially
because there's plenty of other institutions that those prospects have heard about, that they maybe
know about them, and they are interested in, and so it's a much more challenging game, and it's
something that I think a lot of institutions have that benefit, if you are...

0:20:29.6 BS: Well, let me adjust for a second, there's the opposite aspect there too, if you are
investing all of your resources and time chasing those students who are a long ways away, this is a
competitive area, it's a competitive market, there are a lot of institutions working for students and
you can certainly lose your local market share, you can lose those local students where you have
that advantage. And to some extent, you could see the worst of both worlds where you put a lot of
effort into expanding your reach far flung, in far-flung areas, and ended up with someone coming
and eating your lunch at home. So overall, I would say the first thing to look at is that local market,
prioritize there, make sure you're reaching out to prospects, building those relationships, and then
only then really start looking at expanding and expanding into some smaller sort of test markets at
first, once you start building that name brand and the recognition, it's almost as if you're playing a little bit on home field territory, you've already got your name there, you already have students and
alumni in an area, and you can start playing that home ground strategy in those areas as well, but starts at home, and I think that even with some disadvantages in terms of demographic decline, you're still in a much better position to be playing to the local markets first as your first priority.

0:22:03.7 LH: So we found in our research, there's a lot of evidence for the success of this strategy of owning your backyard, even amidst challenging demographic trends and shifts, and while we've focused a lot on competition, on market share during this conversation, as you mentioned earlier,
institutions certainly can't and shouldn't ignore demographics, so how should they be thinking about the impending demographic shifts going forward, how would you frame that for an institution?

0:22:37.5 BS: Yeah, yeah, we've talked all this about market share, and I mentioned earlier that we still have to be thinking about demographics, and I would say the way that I think about it is not like a roadmap, I think a lot of institutions are focusing on demographic decline too much like a roadmap, let's go to places that are growing, but it said more like a weather report, the demographic weather help shape how you're going to do things, and it gives you an idea of just how challenging
the conditions ahead might be, but it's not going to be the end all or be all for your strategy, it just adjusts your strategy a little bit, and I think with those two elements, so lets you know, are we facing a light rain perhaps where we need to adjust our strategy a little bit, we need to invest more
in getting students just a little bit, or are we facing a big headwind, are we facing really something challenging that is going to require us to revamp our institution strategy, to really rethink a lot of the
elements of the value proposition and who we're serving as an institution to be able to weather the storm, essentially. And so for me, I think that's probably a better way to be thinking about the interplay between these two elements, the demographics, let you know how tough it's gonna be, and
I think market share helps you understand the way forward and sort of some of the ways that you have to adjust to those challenges.

0:24:15.0 LH: I love that, and that's such a great, great analogy. And you talked earlier about
market share being the number of students that you're able to enroll in a given market or in a given
region, and so obviously this is a metric that's important for enrollment leaders and institutional
leaders to be keeping track of, but in the absence of near constant data polls, how do you advise or
recommend the institutions stay on top of their market share performance and perhaps even the
performance of other institutions in their region?

0:24:51.3 BS: Yeah, certainly, this is something I've been working in the past six months on, is
providing some resources and opportunities for our partners to be able to look at their market share
and look at some of their competitors market share, and so we're putting out a tool called the
Enrollment Scenario Explorer, and that's really gonna be available as a facilitated discussion for our
partners, so we're looking to get in front of cabinets, talk with university leaders to share with them
about how their market share has been looking over the past 10 years, how it's been shifting. What
their demographic... A demographic projection tailored to their institution, you know what we're
anticipating, and also help them understand if we shifted our market share in ways that perhaps
have happened before or haven't happened before for your institution, what will that do to your
projection? How will things move? What are your avenues for it? And so, very excited that we're
getting close... We're still in the end stages of development, we're getting very close to launching
the Enrollment Scenario Explorer and being able to provide that to our partners.

0:26:03.9 LH: That's great, and I can share that one of my favorite features of this tool, we call it an Enrollment Scenario Explorer, is the opportunity for institutions to create potential future scenarios
to explore what would happen if they were able to increase or decrease market share within a
particular market. And based on a lot of the research that we've done on strategic planning, we
know that doing some of that future exploration, that scenario planning is absolutely key to
developing a strategy that is agile and market-aligned, and so it sounds like this tool will not only
provide partners with historical information and trends, but also with that opportunity to envision
future scenarios, and start to chart a course toward being successful in a variety of different future
states.

0:26:54.8 BS: Absolutely, yeah, that's our hope, and I think we're really excited about having these
strategic conversations with our partners and being able to help engage with them in some of those
big challenging discussions and questions that they'll be facing.

0:27:12.0 LH: Definitely, so besides tracking market share, keeping abreast of those trends and
perhaps future scenarios, what are the other actions that you recommend the institutions take right
away to make sure that their enrollment strategy is aligned with some of these market realities?

0:27:29.9 BS: Absolutely, I think we said about reinvesting in the local opportunities, the most
local students that you have are the ones who are already on campus, we might say, and there's the
saying... a bird in the hand is worth two in the bush. And retention is the big element here that every
institution can put effort into keeping the students that they have and really investing there, there's a
lot of benefit there. And some of the research that we've been doing has been showing that you can
get big improvements in your institution's revenue situation with retention increases, not to mention
that that's just a good thing to be doing to be helping increase student success. And I even think
there'll be benefits there down the line too, you know, students and prospects are looking at the
experience that they're getting on campus, and if you're providing more support for those students,
you can point to examples of students who you've been able to help through college and become
successful, that's only more credence to that your own institution students should go to. And so I
would say for everyone, even those who are facing really challenging demographic situations, after
looking at your local markets and retention is definitely another strategy I would recommend.

0:28:58.3 LH: Absolutely, and you touched on this earlier, when it comes down to a market share
is at the end of the day, a zero-sum game, so not everyone can win within the same market, and so
you talked earlier about how so many institutions are prioritizing alternative markets, whether that's
adult in grad ed or different types of credentials, international markets. What do you think are the
strategic questions or priorities, things that institutions should be keeping in mind when they think
about alternative markets as a source of new enrollments, amidst demographic declines or market
share declines, what do institutions need to keep in mind when they start looking at other markets?

0:29:49.3 BS: Like looking at graduate or adult markets, certainly, these are definitely important
markets, and I think there's... I wouldn't say like a band on the ship or on any of these, but I think
there should be a weighing of opportunities when you're looking at setting your strategy for who
you're serving as an institution, and who you're enrolling and where you're putting your regs... I
would recommend putting local, in reinvesting in your local markets, even though I think at first
and how we talked about earlier, it's a little counter-intuitive, put that in the mix when you're
looking at investing in far-flung markets or adult, serving adult students, graduate students, etcetera.
I think oftentimes, it's missing in sort of that the choices that are put on the table is just working
more to enroll more of the local students, so I wouldn't say focus only on your local markets because there's a lot of great opportunities and ways that you can serve students in all of these other
ways too, but make sure that it's on the table, is I think how I would describe it.

0:31:07.0 BS: And I think any conversation about looking at adult, looking at graduate, looking at
these other areas, should think about the intersecting nature of all of these opportunities, if you have
unlimited dollars, do them all, but if you have to make strategic choices, make sure that you're
weighing them all together and really having a good conversation about where you have the best
opportunity to succeed as an institution.

0:31:39.3 LH: Absolutely, and it sounds like there are some pretty important ROI conversations
that need to happen around the opportunities presented by new versus existing markets, and that
will increasingly become important as the enrollment landscape continues to shift and become more
volatile. Brian, I know that we can probably talk about enrollment and market trends for hours, but I
think we've reached a good stopping point, and I just wanna circle back to one thing that you
mentioned here at the end that I think is worth highlighting, and that's that point around retention
and then the importance of student retention, not only as a student success strategy, but as an
enrollment strategy, and this is something that every institution, no matter their demographic
scenario or their likelihood of growing market share, this is something that every institution can
invest in and improve upon, and again, contribute to those student success, those enrollment and
those overall institutional goals, so I think that is a great point to land on and a great message to
continue to reinforce. Brian, it is been great chatting with you. I thank you so much for your
insights here, and really look forward to the launch of the Enrollment Scenario Explorer.

0:32:53.5 BS: Yep. Thank you.

0:32:55.8 LH: And thank you all for joining us this weekend, and we hope to see you back soon for
another episode of Office Hours With EAB.

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0:33:09.7 Speaker 1: Thank you for listening. Please join us next week when we explore why
nearly 70% of her funds that were appropriated by the federal government more than a year ago,
still haven't been spent by colleges and universities. Until next week, thank you for your time.

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