All signs indicate that high school graduation rates will continue to drop due to low birth rates, leading to a potential higher education metldown that is likely to affect all academic institutions, big and small, in the years after 2024.
What steps do colleges and universities need to take to survive? The answer lies in subscribing to the law of survival of the fittest and in increasing market share.
Higher education is facing a new and potentially grave obstacle. For several decades, there have been plenty of students for colleges and universities to attract. All colleges needed to do was to throw their net to catch their fair share of students. However, as the number of high school graduates seeking college began to dwindle in the 1990s and early 21st century, colleges and universities have been forced to throw a wider net and offer shiny new features such as lazy rivers, high-end gyms and maid service to attract students. As the decline continues with the dramatic downturn in birth rates and the drop in high school graduates, colleges and universities are now forced to compete for students more strategically.
Any mention of market share, marketing, branding and other references to corporate tactics was previously taboo in academia. Recent college closures, however, have forced colleges and universities to view themselves more like corporations. Nowadays, strategic business plans, return on investment and marketing are part of the daily vocabulary used in board of trustees’ meetings and among college presidents and administrators.
The new normal for colleges and universities is to consider how to increase their market share. A typical definition of market share is “the portion of a market controlled by a particular company or product.” The only way colleges and universities can increase their market share is to battle for each student. Each student must be taken from another college or university, since there are fewer and fewer high school graduates.
Market share is often increased through a well-designed and sophisticated marketing plan, whereby colleges must literally attract and steal students from their competitors. The survival of the fittest is the next iteration of the new normal. The fittest will be the college or university that has a strong attraction engine and, more importantly, knows how to retain its students, which will result in a bigger gain of market share. Honing an effective and attractive marketing message with a strong brand promise will attract students, but delivering on your brand promise will be the key to retaining them.
Colleges with operating budgets in the $25 to $50 million range are least likely to benefit from hiring big-name consulting firms, given the firms’ large fees and lack of expertise in small, regional colleges. They tend to use a sledgehammer approach when a smaller hammer might do the job. Small colleges should consider smaller, local firms that may be more familiar with the institution and area and may also offer more reasonable fees to develop a strategic marketing and enrollment plan.
As an example, a small college in upstate New York had a contract with a well-known firm that was charging high fees for marketing and public relations work. The firm was also marking up prices for newspaper and social media ads and placements without quantifiable results. However, the institution hired a seasoned local firm to attract adult students in addition to high schoolers. As a result, the smaller firm was able to provide more tangible marketing and recruitment services for a fraction of the cost proposed by the larger firm, as well as more measurable results.
A cottage industry is emerging to take advantage of the decrease of students in higher education. Higher education institutions must be very careful how they go about selecting and using consultants and firms to survive and thrive in this new, competitive higher education space.
Alex Parnia is president of M Square Media USA, which works with educational institutions on strategic associations with global institutions and companies. He served as president of Pacific Oaks College & Children’s School from 2012 to 2015. He also served as provost of Nichols College and executive vice president at Cambridge College.