2015 April GrayReports - Student Demand Trends

GRAYREPORTS
Demand for Educational Programs
www.GrayAssociates.com
Results through April 2015

617.401.7662 www.GrayAssociates.com 2
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For more information please contact Bob Atkins.
Email: bob.atkins@grayassociates.com
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§  Demographic
priorities
§  Geo-priorities
§  Market share
§  City selection
§  Location selection
§  Relocation analysis
§  Consolidation
§  Program selection
§  Program development
§  Curriculum enhancement
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§  Business strategy
§  Strategy implementation
§  Pricing
§  Outcome improvement
Advanced Analytics
Predictive Models
Geo-Analytics
Clients: Higher Educational Institutions and Investors
Program Pricing:
Coming in 2015

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What is GrayReports?
GrayReports tracks demand trends in higher education.
§  Overall industry trend reports are a free monthly service, which includes these webinars.
§  Custom reports on trends by market and programs, which we provide to our paid subscribers:
─  Monthly reports for their specific programs and markets
─  On-line access to detailed data for their programs and markets
Over 38 million qualified inquiries
January 2012 to the present
Over 920,000 new inquiries in April 2015
Over 185 programs with over 10,000 inquiries
Over 300 cities with over 10,000 inquiries

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Why GrayReports?
To tell if you are winning, you need data on your performance—and your competition’s.

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Both Scores Matter
Down by one, in the bottom of the ninth requires specific actions by managers, coaches and players.

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Both Scores Mater
Up by one in the bottom of the ninth, requires a very different approach.

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Why GrayReports?
GrayReports fills in the scoreboard—so you know if you are winning or losing the battle for market share.
• GrayReports

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Key Demand Trends and Observations
1.  April has the best year-over-year inquiry results in 2015, down only 2%.
2.  Year-over-year...
1.  Inquiries for on-line programs reversed their decline, finishing up 4%.
2.  Inquiries for on-ground programs weakened.
3.  Conversion rates trended lower.
4.  Average cost per converted inquiry continued to rise.
3.  The largest programs and markets continued to lose inquiry volume.
4.  Though the gap has fluctuated, the market remained bifurcated:
-  Struggling institutions dropped 4%.
-  Sustainers were up 1%

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Agenda
1.  National Inquiry Trends
2.  Inquiries and Conversions: On-Line vs. On-Ground Programs
3.  Views by Program and Segment
4.  Marketing Implications
5.  Summary

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Overall Student Inquiries
April demand held steady with March and only dropped 2% year-over-year.
§  January and February were each down 10% or more.
§  March was down 6%.
§  April has the best year-over-year results in 2015.
-2% 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 2014 2015

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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.
3.4%
3.1%
3.6%
3.5%
3.5%
3.5%
3.8%
3.3%
3.4%
4.0%
3.0%
3.0%
2.8%
2.3%
2.3%
1.6%
2.7%
2.3%
1.8%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
Education Industry Inquiry Conversion Rates
2014 2015 Average Immature Conversion Rate
Inquiry to Application: Conversion Rates
Although the inquiry gap was closing in April, year-over-year conversion rate comparisons were weak.
§  January inquiries, now mature, converted at a lower rate than year-ago levels for the month, and
compared with the 2014 mature average.
§  February, March and April were at or below norms for immature months.
Immature Months1
2014
Mature Average: 3.4%

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Number of Conversions
Lower inquiry levels and conversion rates drove down conversions.
§  Conversions in January 2015, now a mature month, were down a significant 26% year-over-year.
§  February, March and April conversions are also likely to fall short, but it is too soon to be sure.
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Education Industry Inquiry Conversions
All Programs and Award Levels
2014 2015 2013
Immature Months1

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Average Price for Pay-per-Lead Inquiries
The average price for external inquiries continued to increase slightly month-over-month.
§  This slow increase mirrored the pattern observed during the first four months of 2014.
§  In April, inquiry prices increased just 2% to $44.55.
§  Through April, average prices were 4%-5% higher year-over-year.
$44.01 $44.20 $44.24 $44.55
$42.13 $42.24 $42.13
$42.87
$41.59
$44.97 $44.67 $44.86
$46.15 $46.45 $45.94
$43.11
$30
$32
$34
$36
$38
$40
$42
$44
$46
$48
Average Price per Pay-per-Lead Inquiry
2015 2014
Note: Inquiry price is the average price for pay-per-lead inquiries.

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Average Cost Per Converted Inquiry
The cost per converted inquiry continued to rise.
§  January, the most recent mature month, closed at $1,559 up 24% from the prior year.
§  February, March and April also trended well above prior year levels.
§  As February, March and April mature, cost per conversion will drop, but will likely remain above 2014.
2014 $1,255.10 $1,360.79 $1,179.69 $1,233.57 $1,175.09 $1,270.14 $1,185.53 $1,357.09 $1,351.38 $1,164.42 $1,538.47 $1,428.85
2015 $1,559.39 $1,914.91 $1,938.86 $2,726.17
2013 $1,367.42 $1,521.58 $1,326.79 $1,387.29 $1,376.81 $1,135.58 $1,267.35 $1,322.75 $1,455.19 $1,405.89 $1,379.73 $1,377.45
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000 Cost Per Converted Inquiry
Immature Months

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Agenda
5.  Summary

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Inquiries for On-Line Programs
Education Industry Inquiries: YOY Percent ChangeOn-line inquiry volumes in April bucked the negative trend by finishing up 4% from prior-year levels.
§  Inquiry volume for the first quarter of 2015 was down 11% from cumulative first quarter 2014 volume.
§  April is the first month since January 2013 to have positive year-over-year on-line inquiry growth.
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
Inquiries
Inquiries for On-Line Programs
2014 2015
4% YOY

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Student Inquiry Conversions for On-Line Programs
January 2015 matured, but continued the negative trend established in the latter part of 2014.
§  Inquiry conversions for on-line programs in January, now mature, were down 17% from prior year.
§  With one month left to mature, February looks like it could mature at levels comparable to last year.
§  March and April are trending well below prior-year levels.
-
2,000
4,000
6,000
8,000
10,000
12,000
Inquiry Conversions for On-Line Programs
2014 2015 2013
Immature Months1

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Inquiries for On-Ground Programs
Inquiries for on-ground programs declined over 10% in March and April.
§  March was the weakest month in 2015.
─  Lowest on-ground inquiry volume,
─  15% drop from prior year.
§  April was slightly better: inquiry volume was higher than March, and was only down 12% from 2014.
2012
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
Inquiries
Inquiries for On-Ground Programs
2014 2015
-12% YOY

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Conversions of on-ground inquiries continue to weaken.
§  Conversions for on-ground programs plummeted in the final months of 2014.
§  January 2015 finished 30% behind 2014.
§  February, March and April are likely to mature more than 15% below year-ago levels.
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Inquiry Conversions for On-Ground Programs
2014 2015 2013
Immature Months1
Student Inquiry Conversions for On-Ground Programs

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-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Conversions of External Inquiries
2014 2015 2013
Conversions of External Inquiries
Conversions from external inquiries also continue to decline.
§  Conversions of external inquiries in January matured 35% behind year-ago levels.
§  February and March appear unlikely to meet prior-year levels.
§  April conversions are off to a slow start.
Immature Months

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Conversions of Internal Inquiries
January’s decline in internal inquiries was not as severe as declines in the final months of 2014.
§  Conversions of internal inquiries fell over 20% in November and December.
§  January conversions were down 18% from prior-year levels.
§  February, March and April are likely to mature below last year.
-
5,000
10,000
15,000
20,000
25,000
Conversions of Internal Inquiries
2014 2015 2013
Immature Months

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Agenda
5.  Summary

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Largest Programs: April Growth
Only two of the five largest programs grew year-over-year in April.
§  Business Admin inquiry volumes grew 10%.
§  Health Care Admin grew 8%.
§  Medical Assisting and Accounting, which grew in March, dropped 17% in April.
§  Criminal Justice was the biggest loser once again, dropping 64%.
-8%
-28%
-25%
6%
-29%
10% 8%
-17% -17%
-64%-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
Business Admin and
Management
Health Care Admin/
Management
Accounting Medical Assisting Criminal Justice/Police
Science
Year-over-Year Change in April Inquiries
Five Largest Programs
2014 YoY % Change 2015 YoY % Change

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Top 5 Fastest-Growing Programs in April
The five fastest-growing programs each grew at least 60% in April.
§  Health Information, a new program on the list, was the fastest-growing program in April.
§  Welding Tech was the second fastest-growing program.
§  Registered Nursing and Nursing Science remained on the list of fastest-growing programs, while
Electrical, Technician is new to the list in April.
122%
33%
28%
101%
10%
129%
75%
69% 65%
60%
-10%
10%
30%
50%
70%
90%
110%
130%
Health Info./Medical
Records Admin.
Welding Tech Registered Nursing Electrical, Technician Nursing Science
Five Fastest-Growing Programs
1.  Includes only the top 75 programs (ranked on total inquiry volume since January 2012)

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Largest Cities for Inquiries
April inquiries for four of the five largest markets were down 5% or more.
§  Only New York declined by less than 5%.
§  Los Angeles was once again the worst-performing market, down 26%.
-14%
-12%
-14%
-9%
3%
-3%
-5%
-8%
-12%
-26%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
New York Atlanta Chicago Philadelphia Los Angeles
Top Five Cities for Inquiries
Note: The market for each city is defined as a 15-mile radius around the population center of its CBSA.

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Fastest-Growing Cities for All Inquiries
One new city joined the list of fastest-growing cities in April.
§  Oklahoma City, the fast-growing market, followed 56% growth in March with 52% growth in April.
§  Wichita, new to the list in March, had growth of 33% in April.
§  Kansas City and Bridgeport remained on the list with growth of 13% and 12%, respectively.
§  Denver, CO replaced Indianapolis, IN on the list of fastest-growing cities.
-7%
-19%
-16%
-7%
-16%
52%
33%
13%
10%
12%
-25%
-15%
-5%
5%
15%
25%
35%
45%
55%
Oklahoma City, OK Wichita, KS Kansas City, MO/KS Denver, CO Bridgeport, CT
Five Fastest-Growing Cities for All Inquiries
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.

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Sustainers vs. Strugglers: Inquiry Volume
While the gap between Strugglers and Sustainers has fluctuated in 2015, the Sustainers grew in April!
-12% -15% -15% -12%
0%
-3%
-13% -16%
-31%
-44% -46%
-27%
47% 44%
28%
10% 9% 7%
-6%
-13%
-7% -7% -11% -9%
-50%
-30%
-10%
10%
30%
50%
Sustainers vs. Strugglers
Year-over-Year Change in Inquiry Volumes 2014
-15%
-11%
-8%
-4%-6% -8%
0%
1%
-30%
-20%
-10%
0%
10%
Year-over-Year Change in Inquiry Volumes 2015
Strugglers
Sustainers

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Agenda
5.  Summary

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Winning or Losing
You can’t tell if you are winning or losing the battle for market share just by looking at your own results.
Inquiry Scoreboard

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Down, but Winning
Being down just 4% when your markets and programs are down 9% is quite an accomplishment.
§  Communicate market constraints
§  Exploit pockets of inquiry growth
-  By program
-  By market
-  By neighborhood
§  Improve conversion rates
-  Pricing?
-  Admissions practices?
§  Improve retention
§  Cut costs
Inquiry ScoreboardPotential Implications

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But, being down 4% when the market is growing 9% is not so great.
Down and Losing
§  Revamp marketing strategy and
tactics
-  Messaging?
-  Channels?
-  Brand?
-  Programs?
-  Investment?
Potential Implications Inquiry Scoreboard

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Agenda
5.  Summary

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Key Findings
§  The mix of inquiries is shifting to:
-  Internal
-  Healthy schools (Sustainers)
-  Higher degree levels
-  Smaller cities in the mid-west.
§  There are tremendous variations by city, program, and modality.
-  Three of the five fastest-growing cities are new to the list since February.
-  Three of the five fastest-growing programs have also joined the list during the past 2 months.
-  Large cities are shrinking, small mid-western cities are growing
§  You need a custom view that reflects the markets in which you compete.
§  You could know if you are winning or losing the battle for share.
-  Adapt your strategy to the market situation
-  Correctly assess company and management performance

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A Special Offer
Today, we would like thank you with a special offer.
We will work with you to make the trial a success.
§  Customize data for your markets and programs.
§  Compare your results with industry results.
§  Create reports for senior management.
§  Help identify marketing tactics tailored to your
markets, programs, and neighborhoods.
Trial Support

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Upcoming Gray Associates’ Webinars
Please join us next month!
June Webinar
(May Results)
Friday, June 26th at 1:00 p.m. Eastern Time

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Questions and Contacts
Please feel free to contact:
Bob Atkins
CEO
Gray Associates, Inc.
Bob.Atkins@GrayAssociates.com
617-366-2836

2015 April GrayReports - Student Demand Trends

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2015 April GrayReports - Student Demand Trends