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Lipman Hearne Chairman Tom Abrahamson's presentation with Southern Illinois University's Terri Harfst and Abbey Fisher at the 2013 AMA Symposium for the Marketing of Higher Education in Boston.
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Welcome
The Neglected “P” in Higher Ed Marketing: Strategic Pricing for Student Recruitment
2013 AMA Symposium for the Marketing of Higher Education
11/12/2013
Why Lipman Hearne?
Tom AbrahamsonChairman, Lipman Hearne
tabrahamson@lipmanhearne.com
Lipman HearneMarketing for visionary
organizations
4Lipman Hearne | Southern Illinois University
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Nearly 12,000 Students Said…
SOURCE: Lipman Hearne 2013
Lipman Hearne | Southern Illinois University
How many “P’s” are you working with?
DO YOU THINK PRICING IN HIGHER EDUCATION IS
MESSY?
7Lipman Hearne | Southern Illinois University
Pricing Situation• Approximately 80% of all freshmen in 2012 received some form of financial
aid • Nearly 90% of students who attend private college receive some sort of aid
or discount • 54% of private institutions increasing tuition discount (record high)• 42% of public institutions increasing tuition discount• Have you ever seen an institution publish its tuition discount rate?
(Moody’s, 2012)
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THE GAP BETWEEN STICKER AND SALE PRICEIS VAST
9Lipman Hearne | Southern Illinois University
MOST THINGS WE BUY = 0% DISCOUNTCAR DISCOUNT = 5%-15%
HOME DISCOUNT = 0% - 10%COLLEGE DISCOUNT = 25% - 60%
HOW WE PERPETUATE TWO MYTHS OF
PRICING
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Myth #1: College Costs are Skyrocketing
Lipman Hearne | Southern Illinois University
SOURCE: The College Board, Trends in Student Aid 2013
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Myth#2: Stop Out and Save Up
SOURCE: The College Board, Trends in Student Aid 2013, Figure 11A
Lipman Hearne | Southern Illinois University
Distribution of Outstanding Education Debt Balance
<$10,000 - $24,999 $25,000 - $99,999
$100,000 - $200,000+
Average loan: $28K/10 yearsMonthly payment: $322Salary required: $35K
4 Ways to Provide Pricing Leadership1. Leverage and segment
a. Leverage data on students’ ability and willingness to payb. Develop a need and academic segmentation strategy and tailor
communications to those segments2. Add to your institution’s “profit”
a. Devise a pricing strategy that fills capacity and builds enrollment in programs that have the highest contribution margins
3. Be ready with a position on radical price adjustmenta. Determine if a reset is right for your institution by conducting benchmark
research to understand its competitive pricing among peer institutions4. Brand: understand and improve your college’s perceived value
a. Conduct research on perceptions and price elasticityb. Institute branding efforts to elevate value and enhance communications
around tuition increases and discounts
13Lipman Hearne | Southern Illinois University
Case Study:Southern Illinois University
Terri Harfstterriw@siu.edu
Abbey Fischerabjones7@siu.edu
SIU Profile• In Carbondale IL• 18,000 students• Carnegie: “high research” university• 50 states and 92 countries represented• $291 MM total financial aid administered• 88% of SIU students receive some type
of aid• 42% Pell eligible• 39% of 2013 freshmen African American
or Hispanic• 45% first generation• Destination draw campus
15Lipman Hearne | Southern Illinois University
Financial Aid for MarketersFundamental aspects of financial aid a marketing professional should know:• Cost of Attendance = COA• Estimated Financial Contribution = EFC• COA and EFC are consistent at every
institution• Difference is the price of institution and
awards they offer• Need-based versus need blind
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SIU Financial Aid
Lipman Hearne | Southern Illinois University
SIU’s financial aid program before the redesign• SIU only had enough aid for a set amount of students • SIU over-awarded by 2:1 but aid was exhausted in
early March• Communications drove students to website to find aid
amounts
SIU’s financial aid program after the redesign• SIU partnered with Lipman Hearne and Williams & Co.• A shift in funding allowed student’s offer to be partially
need-based and partially gift aid• Revised communications included the shopping list
and scholarship and institutional aid available
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SIU’s Scholarship ProgramBefore redesign: • Offers made only through February• Awards renewable for only one year led to
self-manufactured attrition• Misaligned to SIU’s access and retention
goalsAfter the redesign: • Increased award value and extended awards
to four years• Increased the number of students interviewing
for scholarships• Created new programming and premium
experience for scholars• Service requirement = 254 ambassadors
Lipman Hearne | Southern Illinois University
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2013 Results• Merit-based award increased five times
over prior year• 780 scholars enrolled in 2013 vs. 148 in
2012• Overall ACT score increased one full point• Revenue boosted due to increased
enrollment• Freshmen in Honors Program tripled• SIU met 94% of Need• 50% was Gift Aid• SIU enrolled its largest freshman class in
20 years
Lipman Hearne | Southern Illinois University
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2014 Year-to-Date• Off to a great start!• Meeting yields and goals• SIU has delivered three times the scholarship
offers compared to this time last year
Lipman Hearne | Southern Illinois University
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Suggestions for Collaboration• Understand FA process/undergo training • Get to know your financial aid office staff –
they are typically an untapped resource for marketing and messaging
• Set joint goals and measure progress• Work as a team to examine metrics,
results, and implications
Lipman Hearne | Southern Illinois University
Discussion
Copyright 2013
Thank you.
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