EDUInsight.com


"Covering Innovation and Best Practice in Online Student Communication"

Journal of College Student Retention and Recruiting for both On-Campus and Online Universities



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"Most underserved markets have been reached and the pool of potential students is believed to be limited."

Mark Shay
Chief Academic Liasion
EducationDynamics


Have We Gone Too Far?

The Education Conservancy is a Portland, Oregon group that opposes commercial influences in college admissions. Their web site offers position papers and research on the subject.






Recruiting Students

For-Profit's Insatiable Demand for New Students

As the higher education industry becomes increasingly more competitive, for profit colleges have competed very effectively with traditional schools is in the area of adult and continuing education. These part-time programs, offered both on-ground (on-campus) and online, have been lucrative "cash cows" for traditional universities in the past. Dubbed the “night school” market, such programs extend the brand and prestige of the university into the world of the working adult.

Admission to continuing education programs is generally less selective than their full-time counterparts. Students who meet entrance requirements are usually admitted, assuming space is available. Since so few qualified applicants are turned away because of limited space, for-profits have experienced additional success. The for-profit business has become very scalable, and looks something like this:

  • For every 20 students, the provider needs to add one instructor (adjunct faculty).
  • For every 200 students, providers must either add another classroom (on-ground) or another server (on-line).
  • For every 1,000 new students, they must add another regional center, and so on.

Being in public markets, investor cash is plentiful and access to capital is not an issue. However, the business model needs students. The model is most successful when student leads are plentiful. Buy leads, convert them at X%, and the rest of the business scales quite linearly.

The for-profit industry is relatively new, finding initial success by creating popular and effective professionally oriented curriculum that was delivered to an under-served market. Students with a geographic or physical barrier to attending classes at a local college found programs from institutions like University of Phoenix, Kaplan University and American Intercontinental University to be desirable; thus, the industry flourished by meeting the needs of the under-served.

Today, the for-profit market has matured--most underserved markets have been reached and the pool of potential students is believed to be limited. Demand for students now exceeds supply, and using basic economic theory, the price to recruit these students has risen. As public companies in a growing industry, the management of these institutions is under pressure to keep the pace of growth steady, and advertising agencies, especially those that focus on lead generation, have experienced a marked increase in business

Recent analyst coverage suggests increasing costs in finding interested candidates, reporting that the Cost of Acquisition is continually rising. This speculation has led to investor concerns and some stagnation in the stock prices of these educational providers, and for many companies, marketing and promotion costs now exceed 20% of revenue, a high cost to any business.

For-profit often internally hire or contract with lead generation experts to build marketing campaigns designed to yield high quality prospects and implement systems that bring these students into programs. In this area, for-profit schools have far outperformed their traditional school counterparts. Today, educational lead generation is one of the most lucrative performance-based advertising categories, generating revenue estimated to be exceeding the mortgage and automotive lead generation markets. A recent study by eLearners.com indicates that 80% of the not-for-profit schools would be increasing their online marketing budget

Read more about online lead generation and join an online discussion about this topic in our journal.




Additional sections of this journal address Innovative Practices in Communicating with Students and student retention. We have also placed all articles with a common theme of online education and distance education programs in a separate portal. New articles will be posted each Monday, please check back by bookmarking this site or placing a link to this Student Recruiting portal.

Mark Shay is the founder of EDU - a leading academic advertising provider, - part of EducationDynamics, a leader in student lead generation and enrollment management services.