October 2009 Lawlor Focus

It's Never Too Early to Demonstrate Value

This month, The New Yorker staff writer James Surowiecki poked a few holes in the theory that “this recession has permanently remade American consumers, turning them from spendthrifts into tightwads.” He finds reasons to be skeptical that our nation is experiencing a fundamental change in consumer behavior toward a new frugality that will endure after the recession ends. He points out that “you don’t need psychology to explain what’s happened: Simply put, Americans have been spending less because they have less money to spend.” But that’s exactly what is of immediate concern to enrollment officers at colleges and universities throughout the nation.

In fact, the prevailing narrative coming out of last month’s NACAC conference was that the current admission cycle will be “much grimmer,” as The New York Times put it, than last year’s. While families last year were far enough along in the admission process when the recession hit that it didn’t alter their college plans significantly, families today have had time to adjust their expectations regarding which higher education institutions they will be able to afford. In addition to their actual financial concerns (families can cover only 11 percent of the total cost of their children’s college education this year, down from 15 percent in 2008, according to a Fidelity Investments survey), these families are also exposed to media coverage that is calling into question the perceived value of the college investment.

• In “In a Recession, is College Worth It?” USA Today reported, “Many graduates are discovering that the college payoff could be a long time coming—if it comes at all.”

• In “Is a College Education Worth the Debt?” National Public Radio observed, “There’s one thing that’s clear about this recession: A college education does not guarantee a high paying job” and asked, “So is it really worth it to go to college during an economic downturn?”

• In “Left in Debt, is College a Good Deal?” The Arizona Republic concluded, “The debt challenge should encourage students to take a tougher look at their financing options. Maybe it would make sense to delay college, to take more classes at community colleges, to live at home or economize in other ways.”

• In “The College Calculation” The New York Times Magazine asked, “How much does a college education—the actual teaching and learning that happens on campus—really matter?” and speculated whether “college isn’t, after all, all that different from locking somebody in a closet for four years.”

These articles and others not only focus on the rising price of a college education, but also whether that price is even possible to afford during a recession—citing factors such as a student loan default rate that has risen to 6.7 percent, up from 5.2 percent; employers expecting to hire 22 percent fewer graduates from the class of 2009 than they hired from the class of 2008; and college graduates being the fastest growing segment of unemployed jobseekers. So while all of these articles ultimately conclude that a college degree is indeed “worth it” when the lifetime earnings figure for a college graduate is compared to that of workers with only a high school education, the argument that the economic downturn is diminishing the value of that investment puts increased pressure on all colleges and universities to be more effective in articulating their value propositions.

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As the recession causes more and more families to struggle not just with their willingness but with their ability to pay for a college education, the institutional message about value and price, along with the financial aid package you are able to offer, will be crucial during the yield stage of the selection process. But this year, families’ financial concerns appear to be coming into play much earlier in the consideration process. Even the perception of being unaffordable, simply based on a published price point, can immediately preclude a college from getting into the set of institutions under consideration.

There’s been considerable buzz lately that the junior year in high school is the new senior year. It’s not so much that high school juniors and their families are making decisions in favor of colleges, but that they’re making decisions sooner about which colleges to eliminate from consideration. Therefore, any messaging about your value and affordability that has traditionally been disseminated primarily during the latter phase of the selection process should now be spread via every available communication channel during the entire course of the admission cycle. Consider the following tactics:

• Design a mobile marketing campaign that delivers, via text message, a series of “Did You Know?” factoids that reinforce value and affordability.

• Produce a video segment featuring recent graduates who dispute, in their own words, the notion that college isn’t worth it.

• Customize your campus visits—which can be the “silver bullet” in establishing value and improving yield—for individual prospective students by highlighting the campus experiences and graduate success stories that add value to their particular intended pursuits. Since faculty members are most likely to stay in touch with graduates, getting them involved with prospects during a visit can provide more relevant and compelling evidence of post-graduate success.

• Arrange for current students who benefited from financial aid to visit their hometown high schools (or other venues in their hometowns after school hours) with the admission representative and provide testimonials regarding the value proposition.

• Prominently feature a link to your financial aid calculator throughout your institutional web site, in your e-newsletters and other e-mail communications, and on your social networking sites.

• Communicate admission decisions as early as possible, along with financial aid package estimates, so families have the knowledge and time they need to plan and budget. (Those colleges with early action or rolling admission policies may enjoy a competitive advantage this year.)

• Recruit in geographic areas where you have substantial pockets of alumni—not only can you capitalize on word of mouth, but you can also highlight alumni career successes that are meaningful to prospective students.

• Send a series of “outcomes” postcards that explicitly link specific college learning experiences with particular alumni successes.

• Engage the parents of traditional-age prospective students with e-newsletters that communicate value, successful outcomes and affordability.

In the news

MarketingVOX reports that Microsoft is developing a new monitoring tool called Looking Glass that will aggregate various social media feeds (from Facebook, Twitter, YouTube, Flickr, etc.) and connect them to a customer relationship management system in order to make the social media information more actionable.

Did you know?

“Putting money away for higher education is the top savings goal for today’s teens,” according to a recent TD Ameritrade survey. About 87 percent of teens said they save their money, 62 percent save specifically for college, and 78 percent said they “want to establish a plan with their parents that involves splitting the cost of education.”

Source: Associated Press