As students and families of all income levels become more intentional about determining what they are willing to pay for college, the higher education marketplace is highly attuned to return on investment (ROI). Accordingly, our Trends for 2017 report, “Three Focal Points in the Private Higher Education Marketplace,” examines the three primary variables that students and families factor into their value equation: their price to attend, the quality of the educational experience, and the resulting outcomes of the degree.
Drawing upon our extensive qualitative and quantitative research for independent college and university clients throughout the United States and curating other marketplace intelligence, we note that:
- Sticker shock affects even families with the ability to pay. Most undergraduates attend a four-year institution with tuition and fees of $11,730 or less, but the average sticker price at private colleges is almost three times that—and has doubled during the past 27 years, even after accounting for inflation.
- Families are more price-sensitive and cost-conscious. Most families cross a college off their consideration list due to its published price before applying to it, presumably before knowing what their actual net cost would be. Student loan debt is viewed negatively, so families are holding out for more merit aid.
- Reputation does matter, and people check it out online. A strong academic reputation has consistently been the top reason students select their college, more important even than the college’s price. Families turn most frequently to third-party online sources to research colleges and their rankings.
- High sticker price drives expectations of high quality. To gauge the quality of colleges lacking national name-brand recognition, families consider the personal attention they provide. Student satisfaction is highly correlated with receiving support and guidance from faculty and staff in a welcoming environment.
- Academic alignment with job demand is important. The most important reason students give for attending college is “to be able to get a better job,” so families put a premium on clear paths to employment success, knowledge and skills that are relevant to the job market, and experiential learning outside the classroom.
- Worth is ultimately based on post-graduate results. Due to heightened demands for accountability, college outcomes by institution have become more accessible. Time to graduation, employment/graduate school results, starting salaries, and student loan debt loads are all factors for determining whether a degree is worth its cost.
The three ROI focal points in the higher education marketplace—price, quality, and outcomes—require private colleges and universities to likewise focus on their value proposition and how they deliver ROI, especially in the context of differentiating themselves relative to their key competitors.
Lawlor’s Trends for 2017
Our annual trends report is available for download, and the online extras contain our recommendations and citations. (The Lawlor Group)
Broader Marketing Trends
Leveraging technology is key to what the best brands will do in 2017, according to a forecast from Kindle’s director. (Andreas von der Heydt)
Macro Business Trends
Analysis by Mary Meehan, who specializes in understanding future consumer behavior as a path to innovation and growth. (Forbes)
Our online version of “Trends for 2017” contains infographics, links to the sources we cite, and our recommendations for responding to the trends. “Affordable” is in the eye of the beholder, and even those with the ability to pay their expected family contribution for college think about whether they are willing to spend that much. Authenticity, distinction, and relevance are key as students and families assess what a college is great at delivering, what it offers that others don’t, and how well it matches what they seek. Ultimately, a college must demonstrate how its alumni achieve the end results desired by prospective students in order to communicate its value proposition and prove its return on investment.
Most colleges lacking national name brand recognition do realize they need to heighten awareness of their institution. Yet in a bit of irony, many that have invested in spreading the word are not actually spreading the right word. The marketplace progressed in sophistication from caring about features to caring about benefits—but now it has moved a step further, to caring about results. If your institution has authentic evidence to prove its investment value in terms of the resulting outcomes of the educational experience it provides, then spread the word and heighten awareness about those relevant results.