January 2009 Lawlor Focus

Trends and Tips for 2009

The Lawlor Group offers this synthesis of the marketplace conditions we predict will have significant impact on student recruitment and enrollment efforts at independent colleges and universities during the coming year, along with recommendations for dealing with these conditions.

1. Students and families are facing an inability to pay. The current economic climate is such that more students are struggling to finance their expected family contributions. Colleges and universities must focus on retention efforts among current students, as well as persuade prospective students of their institutions' affordability. Anticipate current students' concerns by asking what potentially could be undermining their sense of educational worth. Respond accordingly to reinforce the value of the financial sacrifice and investment families are making, and demonstrate a commitment to finding affordability solutions for those students facing an inability to pay.

2. Pragmatism is taking precedence. Among those students who have the ability to pay, willingness to pay is the issue—they are "buying down," choosing colleges they perceive as less expensive and a better value. An institution's value proposition can no longer be implied; support it with evidence that not only motivates and inspires a willingness to pay the monetary price of education, but also overcomes students' concerns about the effort costs, psychic costs and time costs involved in paying for that education. Be persuasive in conveying the value of the "quality" component that has traditionally been the main differentiator for private colleges by reframing quality attributes in a practical context.

3. Swirling is increasingly common. Inability to pay and pragmatism are converging with demographic trends to produce an increase in the number of students who are "swirling"; that is, attending multiple institutions on their way toward a degree. To mitigate the negative effects of swirling, turn retention efforts toward demonstrating the value-added components that influence perceived worth. To help retain current students who may be considering a transfer to a more affordable institution closer to home, explore developing delivery systems such as online courses and courses at satellite locations. And because population growth is occurring only within demographic segments that have been traditionally underserved by four-year colleges, these colleges can turn the swirling phenomenon to their advantage by intensifying efforts to recruit transfer students and developing articulation agreements with community colleges.

4. Outcomes are defining institutional worth. Given the pressures on their ability to pay, students are doing cost-benefit calculations that focus on the utility of their educational experiences. Students are seeking evidence of a college's value proposition, so focus on (1) linking specific educational experiences to desired outcomes, (2) directly correlating learning outcomes with the skills employers seek, and (3) developing assessment tools that provide evidence of successful learning outcomes. In addition to highlighting the job and graduate school placements of recent graduates, convey the real-world benefits of experiential learning opportunities, internships and extra-academic experiences.

5. Word of mouth has moved online. Innovations in communication technology are requiring institutions to give up their reliance on traditional means of mass communication and instead join the conversational fray of online social networks. In the midst of affordability concerns and demand for evidence that reinforces perceived worth, word-of-mouth marketing has become an even more essential undertaking for colleges as a cynical marketplace seeks unfiltered information. Delivering well-timed and targeted messages requires a strategy for communicating with prospective students where they already are, and that means utilizing social media platforms such as blogs and social networks such as Facebook.

6. The public desires authenticity. The stealth marketplace places a high premium on transparency and demands that colleges provide relevant and authentic information about their offerings and operations. Colleges must reflect on their raison d'être. When the institution derives its self-worth from its reason for being, the value proposition is more easily framed and more authentically communicated, even by unofficial messengers via social media. During these times when economic and marketplace conditions are exerting pressure on college enrollments, colleges must increase their focus on the "product" (as opposed to just focusing more on the "promotion" element of the marketing mix) by being mission-driven and demonstrating an authentic commitment to their institutions' core values.

7. A moral imperative is emerging. Our nation is placing renewed focus on education as an engine of social mobility, challenging colleges to be more accessible and affordable. Private colleges must continue their efforts to overcome students' perceived financial barriers to enrollment by (1) demonstrating a commitment to containing costs, (2) making the net tuition price as transparent as possible as early as possible, (3) structuring institutional aid to increase the enrollment of low- and moderate-income students, and (4) implementing programs that narrow completion gaps across socioeconomic groups.

To view data and statistics that provide evidence of these trends, you can download a .pdf of our handout "Trends & Tips for 2009: Seven Circumstances that are Shaping the Private Higher Education Marketplace," which was introduced this month at the Council for Independent Colleges (CIC) Presidents Institute.

In the news

Moody's Investors Service issued its "U.S. Higher Education Outlook" for 2009, warning of negative credit trends throughout the sector. Expecting private institutions to be strained more than public institutions, Moody's cited four critical risks: increased pressure on tuition and financial aid; the broad impact of losses on operations and philanthropy; illiquidity of balance sheets, amplified by alternative investments; and volatility in debt markets as well as debt structures. "Fundamentally, 2009 will be a year of re-evaluation of underlying assumptions for endowment management, tuition pricing strategies, and risk management," the analysts predict.

To request a copy of the report, contact The Lawlor Group at tlg@thelawlorgroup.com.

Did you know?

College students are four times more likely to blog than all online adults. More than 80% of college students use Facebook, and LinkedIn is starting to catch on among 10% of college students.

Source: Anderson Analytics' GenX2Z