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How To Best Position and Market a Smaller University

How To Best Position and Market a Smaller University
June 02, 2014 Joseph Schmoke

Since I am a disciple of Harvard professor and author (The Innovator’s Dilemma and others) Clayton Christensen, I don’t think he’d mind if I pass on some of his advice using my own words and perspective.  The advice in this instance is about how small colleges and universities can take advantage of the very narrow focus their larger, richer, more famous brethren are committed to.

Christensen uses three concentric circles to illustrate market segments.  For my purposes I will label the inner circle “Rich & Privileged,” the second circle “Aware & Interested,” and the outer circle “Need Help & Guidance.”  The inner circle consists of students from wealthy families who, of course, plan to attend the elite colleges.  My Aware & Interested group is made up of students from not-so-rich families who know they “should go to college.”  The last group, Need Help & Guidance, consists of minorities and first or second generation immigrants, many of whom may not seriously consider college or if they do, wonder how they’ll get in or pay for it.

Schools like Harvard and Yale and similar northeastern ivy-elite – no offense Stanford and Berkeley – have a built-in contingent of prospective enrollees.  Mom or dad went there, grandpa too. Or rich kids whose parents hire expensive college counselors to get them in the door, supplemented by a few Asians, kids from India’s upper class, and a couple minorities to balance things, flock to these brand-name schools.  No problem with empty seats at these expensive schools; folks are clamoring to get in.  So the schools for the Rich & Privileged keep adding amenities and increasing tuition.  My advice – Christensen agrees because it’s one of his basic tenets – is to ignore this market segment.  They are the 800 pound gorillas and you, the smaller college or university, will be handed your head if you try to compete directly with these schools.

As a smaller college or university you may see some success targeting the Interested & Aware group.  For now, it’s the largest market for postsecondary education.  You may  not want to hear this, but non-brand name schools, even those who are ranked by U.S. News and World Report (even though you might be ranked 387), have an extremely hard time differentiating themselves from the other 7,000 postsecondary schools in America.  But these smaller schools can and should differentiate themselves by using one or both of these strategies: price and focus.

Small colleges and universities, or lesser known schools that have high tuition, should be aware that published tuition (sticker, not net price according to Myra Smith, Executive Director, The College Board) averages $29,056 per year at private four-year colleges, $8,655 for public four-year colleges, and $3,131 for public two-year colleges, the latter two for in-state students.  And half of all full-time students at public and private non-profit four-year colleges and universities charge tuition and fees of $10,300 or less.  Why is this important?  If your small or lesser-known school has set tuition higher than these averages your administration should experiment with lowering costs to attend.

By lowering costs to attend, a small or lesser-known college or university can do what Proctor & Gamble does with new products.  They introduce a new product in mid-sized metro areas that are somewhat isolated geographically so the response can be measured without “noise” from adjacent areas.  P&G then tests marketing messages and price levels in each market to learn which combination works best.  As a college or university, you might do something similar with online messaging and ads targeting specific age and ethnic groups.  Maybe even use disguised market testing, i.e., use online ads without your school’s name, just a generic identifier.  Or you can buy some names from The College Board and send letters and brochures with different pricing to several zip codes.  Be sure your accrediting agency is notified of your market test; many agencies might frown on pricing that’s different from that in your catalog.

Focus is another approach you might try to increase interest – and enrollment – in your smaller or lesser-known college or university.  For example, you might select a degree program that either is already popular at your school or one that is somewhat unique or rare.  Think about the characteristics (psychographic, demographic, etc.) of the ideal student for that program and, once you have identified your ideal student, initiate a test marketing campaign focused on that type of person.  Your marketing department or a third party marketer can help guide this experiment.  And think of it as an experiment, a research project.  No matter the outcome you will have learned something, and ideally you will have found an area to focus on that will differentiate your school from hundreds of others.

And don’t forget about that last group in the outermost circle, the Need Help & Guidance folks.  This is the fastest growing segment of your market, or your potential market.  It is made up of children of immigrant mainly Hispanic families, African-Americans, and those in the lower income brackets.  Many of the parents in these families have not attended college.  But they aspire to have their children get a college education, and many of their children dream of attending an American college or university.  

If I were to take control of your college or university’s strategic planning and marketing I would insist on targeting this outermost circle, the Need Help & Guidance folks.  The name I chose for this group is, by the way, no accident; they do need help and guidance with a procedure that is foreign and intimidating.  The better students among them can’t rely on high school counselors who are overburdened or parents who have no firsthand experience themselves.  You have to offer this help and guidance.  How you can do this will be the topic of another blog on how to market small colleges and universities.

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