2014 October GrayReports - Student Demand Trends

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Key Findings:
Declines in inquiry volumes and conversions accelerated in October.
- Inquiry volumes were down 32%, much more than in prior months.
- Conversion rates dropped to the lowest levels since November 2012.
- The declines hit both on-line and on-ground programs, with on-line hit harder.
- The declines hit both internal and external inquiries.
- We believe that different institutions experienced a range of trends:
–– Strugglers: Some struggling institutions received sharply fewer inquiries and converted fewer of the ones they did receive.
–– Shifters: Some institutions shifted their marketing spend away from paid leads.  Sustainers: Some institutions largely escaped these broad market declines.

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2014 October GrayReports - Student Demand Trends

  1. 1. GRAYREPORTS Demand for Educational Programs www.GrayAssociates.com Results through October 2014
  2. 2. 617.401.7662 www.GrayAssociates.com 2 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Agenda 1. Introduction 2. National Inquiry Trends 3. Inquiries for On-Line Programs 4. Inquiries for On-Ground Programs 5. Internal and External Inquiries 6. Biggest and Fastest-Growing Programs and Markets 7. Summary Today’s Presenter: Steve Probst, Partner at Gray Associates
  3. 3. 617.401.7662 www.GrayAssociates.com 3 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Key Demand Trends and Observations 1. Overall inquiries down 32% in October 2. Conversion rates also down in October, to lowest levels in 2 years 3. Broad declines  Both on-line and on-ground programs  Both internal and external inquiries 4. Considerable variation in these trends by institutional segment
  4. 4. 617.401.7662 www.GrayAssociates.com 4 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Who Is Gray? GrayData Completions IPEDS Employment BLS/O*NET Placement Rates Gray Research Industry Inquiries GrayReports Demographics US Census Job Postings WANTED Analytics Students Programs StrategyLocations  Demographic priorities  Geo-priorities  Market share  City selection  Location selection  Relocation analysis  Consolidation  Program ideation and selection  Feasibility studies  R&D  Market reports  Business strategy and implementation  Acquisition analysis  Pricing  Outcome improvement Advanced Analytics Predictive Models Geo-Analytics Clients: Education Institutions and Investors Mission Help clients do well by doing good
  5. 5. 617.401.7662 www.GrayAssociates.com 5 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com What is GrayReports? Your access to information on demand and marketing trends in higher education  Overall industry trends, which we will review today  Customized monthly reports for your specific programs and markets  On-Line access to detailed data for specific programs and markets Over 33 million qualified inquiries January 2012 to the present Over 700,000 new inquiries in October 2014 Over 185 programs with over 10,000 inquiries Over 300 cities with over 10,000 inquiries
  6. 6. 617.401.7662 www.GrayAssociates.com 6 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Agenda 1. Introduction 2. National Inquiry Trends 3. Inquiries for On-Line Programs 4. Inquiries for On-Ground Programs 5. Internal and External Inquiries 6. Biggest and Fastest-Growing Programs and Markets 7. Summary
  7. 7. 617.401.7662 www.GrayAssociates.com 7 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Overall Student Inquiries Total industry inquiries continued to fall further behind year-ago levels in October.  Total inquiries in October were down 32%, significantly worse than the 22% decline the month before.  We believe that this reflects three very different institutional segments: ─ Struggling: Some schools are struggling and are receiving fewer inquiries. ─ Shifting: Some schools have changed their marketing to reduce dependence on pay-per-lead inquiries. ─ Sustaining: Many schools are not changing and have relatively steady inquiry volumes. -32% YOY - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec National Inquiries All Programs and Award Levels 2012 2013 2014
  8. 8. 617.401.7662 www.GrayAssociates.com 8 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com 1. Applications are counted in the month in which the inquiry was received (i.e., an inquiry that is received in January and converts in March will be counted as a January inquiry). Typically, the application rate will rise for at least three months after the month in which the inquiries were received. 3.0% 2.7% 3.1% 2.9% 3.0% 3.4% 3.1% 3.0% 2.7% 2.8% 2.8% 2.9% 3.2% 3.0% 3.4% 3.2% 3.3% 3.1% 3.3% 2.8% 2.6% 2.2% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Education Industry Inquiry Conversion Rates 2013 2014 Inquiry to Application: Conversion Rates Inquiries are also converting to applications at lower rates than a year ago.  In the first half of the year, conversion rates were much higher than in 2013, but now are falling short.  October was a particularly bad month. ─ We forecast that only 2.2% of October inquiries will convert. ─ September is likely to convert at only 2.6%. Immature Months1 2.6% 2.3% 1.5%
  9. 9. 617.401.7662 www.GrayAssociates.com 9 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Student Inquiry Conversions Fewer inquiries and lower conversion rates will drive down the number of October conversions by 45%. 1. Applications are counted in the month in which the inquiry was received (i.e., an inquiry that is received in January and converts in March will be counted as a January inquiry). Typically, the application rate will rise for at least three months after the month in which the inquiries were received. Immature Months1 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Education Industry Inquiry Conversions All Programs and Award Levels 2013 2014
  10. 10. 617.401.7662 www.GrayAssociates.com 10 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Average Price for Pay-per-Lead Inquiries Average inquiry prices rose slightly in October, after a 3% increase in September.  For January through May, prices were stable and slightly above year-ago levels.  Prices jumped about 8% in June and were steady for three months at about 7% above year-ago levels.  It is not clear how much the rising price trend reflects across-the-board increases vs. a change in mix (with lower-priced inquiries declining much faster than higher-priced inquiries). $42.13 $42.24 $42.13 $42.87 $41.59 $44.97 $44.67 $44.86 $46.15 $46.58 $30 $32 $34 $36 $38 $40 $42 $44 $46 $48 Jan. Feb. Mar. April May June July Aug. Sept. Oct. Nov. Dec. Average Price per Pay-per-Lead Inquiry All Programs and Award Levels 2014 2013 Note: Inquiry price is the average price for pay-per-lead inquiries.
  11. 11. 617.401.7662 www.GrayAssociates.com 11 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Average Cost Per Converted Inquiry Cost per converted inquiry jumped in August and is continuing to rise.  Cost per converted inquiry for the first half of 2014 was relatively steady and comparable to 2013 levels.  It looks like August and September inquiries will end up close to $1,700 or $1,800 per converted inquiry, about 33% higher than earlier in the year.  October inquiries are on track to cost about $2,100 per converted inquiry, once those inquiries have had enough time to convert, or about 50% higher than year-ago levels. JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2013 $1,378 $1,531 $1,335 $1,397 $1,387 $1,151 $1,287 $1,347 $1,484 $1,436 $1,418 $1,419 2014 $1,301 $1,428 $1,228 $1,322 $1,271 $1,435 $1,365 $1,709 $2,053 $3,100 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 Cost Per Converted Inquiry All Programs and Award Levels
  12. 12. 617.401.7662 www.GrayAssociates.com 12 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Agenda 1. Introduction 2. National Inquiry Trends 3. Inquiries for On-Line Programs 4. Inquiries for On-Ground Programs 5. Internal and External Inquiries 6. Biggest and Fastest-Growing Programs and Markets 7. Summary
  13. 13. 617.401.7662 www.GrayAssociates.com 13 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Inquiries Inquiries for On-Line Programs All Programs and Award Levels 2013 2014 Inquiries for On-Line Programs Education Industry Inquiries: YOY Percent ChangeInquiries for on-line programs fell 44% below year-ago levels in October.  That continues the worsening trend evident since July.  Inquiries for on-line programs have been below year-ago levels since January, and they are trending worse than overall inquiries. -44% YOY
  14. 14. 617.401.7662 www.GrayAssociates.com 14 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Student Inquiry Conversions for On-Line Programs Inquiry conversions for on-line programs are declining drastically, with October likely to be 66% below last- year’s level.  Inquiry conversions for on-line programs have generally been below 2013 levels this year, with the exceptions of May and July.  Conversions of August and September 2014 inquiries for on-line programs are likely to finish at least 40% below last-year levels. 2012 - 2,000 4,000 6,000 8,000 10,000 12,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Inquiry Conversions for On-Line Programs All Programs and Award Levels 2013 2014 1. Applications are counted in the month in which the inquiry was received (i.e., an inquiry that is received in January and converts in March will be counted as a January inquiry). Typically, the application rate will rise for at least three months after the month in which the inquiries were received. Immature Months1
  15. 15. 617.401.7662 www.GrayAssociates.com 15 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Agenda 1. Introduction 2. National Inquiry Trends 3. Inquiries for On-Line Programs 4. Inquiries for On-Ground Programs 5. Internal and External Inquiries 6. Biggest and Fastest-Growing Programs and Markets 7. Summary
  16. 16. 617.401.7662 www.GrayAssociates.com 16 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Inquiries for On-Ground Programs Inquiries for on-ground programs were down 25% in October, continuing a downward trend that started in August.  Inquiries for on-ground programs exceeded last-year levels for the first half of 2014.  Since July, the gap relative to year-ago volumes has worsened each month. 2012 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Inquiries Inquiries for On-Ground Programs All Programs and Award Levels 2013 2014 -25% YoY
  17. 17. 617.401.7662 www.GrayAssociates.com 17 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Student Inquiry Conversions for On-Ground Programs Conversions of inquiries for on-ground programs have been falling at an increasing rate.  Conversions of October inquiries for on-ground programs are likely to be 35% to 40% under year-ago levels.  Conversions of July and September inquiries for on-ground programs have been about 25% under 2013 levels, while conversions of August inquiries were only 6% under last year. 2012 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Inquiry Conversions for On-Ground Programs All Programs and Award Levels 2013 2014 1. Applications are counted in the month in which the inquiry was received (i.e., an inquiry that is received in January and converts in March will be counted as a January inquiry). Typically, the application rate will rise for at least three months after the month in which the inquiries were received. Immature Months1
  18. 18. 617.401.7662 www.GrayAssociates.com 18 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Agenda 1. Introduction 2. National Inquiry Trends 3. Inquiries for On-Line Programs 4. Inquiries for On-Ground Programs 5. Internal and External Inquiries 6. Biggest and Fastest-Growing Programs and Markets 7. Summary
  19. 19. 617.401.7662 www.GrayAssociates.com 19 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Conversions of External Inquiries Conversions of external inquiries fell sharply starting with August inquiries.  The sudden drop in conversions, starting with August inquiries, reflects a 10% drop in conversion rates relative to 2013 levels for August and September, and a 38% drop in the conversion rate for October inquiries.  External inquiries have been falling steadily since January.  In contrast, conversion rates for external inquiries were roughly 20% above year-ago levels through July. -37% YOY 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Conversions of External Inquiries All Programs and Award Levels 2012 2013 2014
  20. 20. 617.401.7662 www.GrayAssociates.com 20 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Conversions of Internal Inquiries Conversions of internal inquiries have been dropping sharply, with conversions of October internal inquiries likely to be about half of year-ago levels.  For October inquiries, the causes for that drop are about equally due to a drop in internal inquiries and a drop in conversion rates for those inquiries.  In contrast, for September inquiries, the drop below year-ago levels was due almost entirely to a drop in conversion rates. -51% YOY 0 5,000 10,000 15,000 20,000 25,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Conversions of Internal Inquiries All Programs and Award Levels 2012 2013 2014
  21. 21. 617.401.7662 www.GrayAssociates.com 21 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Agenda 1. Introduction 2. National Inquiry Trends 3. Inquiries for On-Line Programs 4. Inquiries for On-Ground Programs 5. Internal and External Inquiries 6. Biggest and Fastest-Growing Programs and Markets 7. Summary
  22. 22. 617.401.7662 www.GrayAssociates.com 22 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Largest Programs: October Growth While total inquiries were down 32%, the biggest programs varied widely around that average.  Business Administration and Medical Assisting – the two biggest programs – both dropped roughly in proportion to the average.  Criminal Justice/Police Science and Accounting both dropped considerably more than average.  Health Care Administration/Management fell 15%, about half of the average decline.  The relative performance of these five programs is similar to what happened in September. -5% 4% -19% -9% -11% -37% -27% -74% -15% -55% -80% -70% -60% -50% -40% -30% -20% -10% 0% 10% Business Admin and Management Medical Assisting Criminal Justice/ Police Science Health Care Admin/Management Accounting Year-over-year Change in October Inquiries Five Largest Programs 2013 YoY % Change 2014 YoY % Change
  23. 23. 617.401.7662 www.GrayAssociates.com 23 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Top 5 Fastest-Growing Programs in October Welding and Electrical Tech continued their run as the fastest-growing programs.  Health Information/Medical Records Administration had the highest combined two-year growth. -21% 39% 569% 87% 11% 451% 268% 80% 38% 28% -100% 0% 100% 200% 300% 400% 500% 600% 700% Welding Tech Electrical, Electronic, and Comm. Tech Health Information/Medical Records Admin Web Page, Digital/ Multimedia Design Network and System Admin Year-over-Year Change in October Inquiries Five Fastest-Growing Programs 2013 YoY % Change 2014 YoY % Change 1. Includes only programs within the top 75 for total inquiries since January 2012.
  24. 24. 617.401.7662 www.GrayAssociates.com 24 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Largest Cities for Inquiries While all five top cities are down, all also beat the average inquiry trend of down 32%. 14% -9% -4% -7% 8% -12% -16% -19% -23% -24% -40% -30% -20% -10% 0% 10% 20% New York Los Angeles Atlanta Chicago Philadelphia Year-over-Year Change in October Inquiries Top Five Cities for Inquiries 2013 YoY % Change 2014 YoY % Change Note: The market for each city is defined as a 15-mile radius around the population center of its CBSA.
  25. 25. 617.401.7662 www.GrayAssociates.com 25 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Fastest-Growing Cities for All Inquiries Three of the top 75 markets had positive year-over-year inquiry growth in October.  Three of the top five growth markets are in California: San Diego, Fresno, and Riverside. 51% -11% 0% -7% -16% 12% 9% 4% -1% -7% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% San Diego, CA Fresno, CA San Antonio, TX Phoenix, AZ Riverside, CA Year-over-Year Change in October Inquiries Top 5 Fastest-Growing Cities for All Inquiries 2013 YoY % Change 2014 YoY % Change 1. Includes only the top 75 cities by inquiry volume since January 2012. Data includes a 15-mile radius from the center of the CBSA.
  26. 26. 617.401.7662 www.GrayAssociates.com 26 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Agenda 1. Introduction 2. National Inquiry Trends 3. Inquiries for On-Line Programs 4. Inquiries for On-Ground Programs 5. Internal and External Inquiries 6. Biggest and Fastest-Growing Programs and Markets 7. Summary
  27. 27. 617.401.7662 www.GrayAssociates.com 27 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Key Findings Declines in inquiry volumes and conversions accelerated in October.  Inquiry volumes were down 32%, much more than in prior months.  Conversion rates dropped to the lowest levels since November 2012.  The declines hit both on-line and on-ground programs, with on-line hit harder.  The declines hit both internal and external inquiries.  We believe that different institutions experienced a range of trends:  Strugglers: Some struggling institutions received sharply fewer inquiries and converted fewer of the ones they did receive.  Shifters: Some institutions shifted their marketing spend away from paid leads.  Sustainers: Some institutions largely escaped these broad market declines.
  28. 28. 617.401.7662 www.GrayAssociates.com 28 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Some New Things We’re Hearing  Market share: a lot more institutions talking about this  Expansion instead of consolidation: re-opening campuses, exploring new markets—taking advantage of “white space” left by Strugglers and Shifters  Metrics: what to measure, what benchmarks to use  Strategy: business models, student and customer segments, value capture  Medical Assisting re-launches: ─ The largest program at many schools ─ Facing challenges on placement and gainful employment ─ Best practices can allow schools to fix and grow this program ─ Comprehensive change required: Curriculum, instruction, simulation, externships, and certification ─ Much higher ROI than a new program launch—and often more opportunity
  29. 29. 617.401.7662 www.GrayAssociates.com 29 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Upcoming Gray Associates Webinars  APSCU: The Opportunity in Medical Assisting Education ─ Wednesday, December 10, 2:00 Eastern time  GrayReports: Student Inquiry Trends through November ─ Friday, December 19, 1:00 p.m. Eastern time
  30. 30. 617.401.7662 www.GrayAssociates.com 30 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com How Do I Get Information for My Locations and Programs? Gray Reports is offered as an annual subscription.  Customized for your locations  Customized for your programs  Monthly PDF overview of inquiry, application, and pricing tends in your markets  On-line access to your market data by program, campus, veteran’s status, years since high school and other factors
  31. 31. 617.401.7662 www.GrayAssociates.com 31 GRAY For more information please contact Bob Atkins. Email: bob.atkins@grayassociates.com Questions and Contacts Please feel free to contact: Bob Atkins CEO Gray Associates, Inc. Bob.Atkins@GrayAssociates.com 617-401-7662 Today’s Presenter: Steve Probst, Partner at Gray Associates

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