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How Much and By When? Essentials of ROI-Driven Enrollment Marketing
1. How much and by when?
The essentials of ROI-driven
enrollment marketing
Presented by Tom Abrahamson
tabrahamson@lipmanhearne.com
2. What we’ll cover today
• The problem
• ROI essentials
• Case studies
• Creating a plan (yes, today)
3. What is Accelerated Integrated
Marketing (AIM)?
• ROI-driven: how much and by when?
• Something must get done. Now. Or soon.
• Not “business as usual”
• AIM layers-on
• “Minds the gap”
4. Where we’ve done “AIM”…
32 institutions of all sizes and types, achieving a
vast range of goals:
• New campus and program launches
• Repositioning academic quality
• Targeted minority student growth
• Same year enrollment turnarounds
• Graduate and professional program growth
and quality
12. Tough if you’re in or around “white” states
PA: -13%
NY: -8%
WV: -8%
OH: -5%
NJ: -2%
MD: -3%
13. Competition is fierce
338
colleges and
universities
within a 100-
mile radius of
Philadelphia
533
colleges and
universities
within a 200-
mile radius of
Philadelphia
32. Why do marketing?
• To generate new enrollment
• To retain students
• To avoid decay in market share
• To reinforce decisions about the
institution
• Oh yes … and to produce XX% of the
revenue
33. What is expected of marketing?
• To get results
• To justify every penny spent
• To achieve goals in the most effective
manner possible
• To use the appropriate marketing
tools among all available
34. Typical marketing spending models
• Percent of sales
• Competitive emulation
• Containment: selective funding
• Correlational analysis: cause and
effect
• All you can afford
36. Some important terms
• Net Present Value
• ROI
• Gross margin
• Incremental Expenses
• Cost of goods sold
• Incremental customer value
• Discount rate
• ROI threshold or hurdle rate
37. 1.Dream big
2.Dive deep
6 3.Pick your lures
4.Do the math
STEPS TO AIM
5.Write the playbook
6.Go fishing
39. Segment current students
2. Examine enrollment trends
Dive Deep Prioritize who you can recruit,
retain, or bring back
40. Determine optimal market
3. strategies for each segment
(and not just new inputs)
Pick Your Lures
41. What is the tuition impact?
4. What will it cost to get them to
Do the Math. apply, enroll, and persist?
Is it worth the investment?
42. The formula :
Gross Margin – Marketing Investment
ROI =
Marketing Investment
43. ROI Tenets
• The construct: all marketing expenditures viewed
as investments
• Three effects: Direct, Halo, Hawthorne
• Measurability: expressed in terms of dollars over a
specified time period
• Collateral benefit: there are additional value-added
“returns” incurred beyond revenue (but will not
suffice as justification for failure)
44. An example of an ROI Campaign’s
financial model:
• Want to increase by 268 students by fall 2009
• $7,876 tuition per year
• All new students will attend under-capacity
programs
• Four-year retention rate is 58%
45. ROI Metrics
Gross tuition per semester generated
by the 268 new students:
268 Students
X $3,938 per semester
Gross tuition: $1,055,384
46. ROI Metrics
Investment:
$351,443 in scholarships (33% discount)
+ $79,154 in additional staff
+ $527,692 in marketing
Total investment: $958,289
47. ROI Metrics
Net Revenue:
$1,055,384 (tuition revenue)
- $958,289 (total investment)
Net Revenue: $97,095
48. ROI Metrics
ROI for the first semester:
$97,095 (net revenue)
÷ $958,289 (total investment)
First semester ROI: 10.1%
49. ROI Metrics
Carried out through the first year:
268 first semester students
+ 241 second semester students
509 total student tuition payments
50. ROI Metrics
Carried out through the first year:
509 tuition payments
X $3,938 per semester
$2,005,230 accumulated gross tuition
51. Carried out over four years assuming 58% four-year retention
of the cohort. Additional staffing is for recruitment only, not
retention of new students.
Budget Item Year One Year Two Year Three Year Four Total
Gross Tuition $2,005,230
Marketing Investments $527,692
Discounts $667,741
Additional Staffing $79,154
Total Investment $1,274,587
Net Revenue $730,642
ROI 57.3%
52. Year Two
Budget Item Year One Year Two Year Three Year Four Total
Gross Tuition $2,005,230 $1,614,738
Marketing Investments $527,692 $0
Discounts $667,741 $532,863
Additional Staffing $79,154 $0
Total Investment $1,274,587 $532,863
Net Revenue $730,642 $1,081,874
ROI 57.3% 203.0%
53. Year Three
Budget Item Year One Year Two Year Three Year Four Total
Gross Tuition $2,005,230 $1,614,738 $1,372,527
Marketing Investments $527,692 $0 $0
Discounts $667,741 $532,863 $452,934
Additional Staffing $79,154 $0 $0
Total Investment $1,274,587 $532,863 $452,934
Net Revenue $730,642 $1,081,874 $919,593
ROI 57.3% 203.0% 203.0%
54. Year Four
Budget Item Year One Year Two Year Three Year Four Total
Gross Tuition $2,005,230 $1,614,738 $1,372,527 $1,166,648
Marketing Investments $527,692 $0 $0 $0
Discounts $667,741 $532,863 $452,934 $384,994
Additional Staffing $79,154 $0 $0 $0
Total Investment $1,274,587 $532,863 $452,934 $384,994
Net Revenue $730,642 $1,081,874 $919,593 $781,654
ROI 57.3% 203.0% 203.0% 203.0%
55. Total ROI Over Four Years
Budget Item Year One Year Two Year Three Year Four Total
Gross Tuition $2,005,230 $1,614,738 $1,372,527 $1,166,648 $6,159,143
Marketing Investments $527,692 $0 $0 $0 $527,692
Discounts $667,741 $532,863 $452,934 $384,994 $2,038,532
Additional Staffing $79,154 $0 $0 $0 $79,154
Total Investment $1,274,587 $532,863 $452,934 $384,994 $2,645,378
Net Revenue $730,642 $1,081,874 $919,593 $781,654 $3,513,763
ROI 57.3% 203.0% 203.0% 203.0% 133%
66. Rigor in planning
Conducted focus groups,
2.
MPQ Kettering’s
Mapped new areas to target “Deep Dive”
Focus on “Perfect Fit”
Invested 8 weeks in planning
67. Micro-targeting
Right fit new suspects (not
your great grandfather’s
liberal arts college),
dormant prospects, ets.
3.
Special interest groups such
Kettering’s segments
as FIRST Robotics, Math and “lures”
& Science Consortium
Schools
Parents
Graduate students
Referrers
68. If you can’t measure it, you
can’t manage it.
“Follow the format and fill in
the blanks” 4.
Financial models created for Kettering’s Math
eventual net revenue
69. The Playbook
19 strategies developed to
make the connection with
the elusive “Kettering
5.
Type” of student Kettering’s Playbook
Avoid a catastrophic drop in
Fall ’06 freshmen
70. How Kettering managed
AIM:
Launch/hoopla
Involved and updated the
community
Constant monitoring of
6.
progress Working the Plan
Careful documentation of all
changes and adjustments
Constant tracking of % to
goal
Celebrated milestones
79. 79
University of Cincinnati in 2003, the
challenge:
• “Commuter” school, underappreciated locally
• 4 consecutive years of enrollment decline
• Immediate goal, April 2003:
Identify and enroll an additional 1,900 students
• Long-term objective:
Multi-phased project to enhance reputation and
increase enrollment, pride, fundraising
80. Our response:
• Fall ’03 “Intervention” plan to mobilize the campus:
Every Student Counts
• Led a “studied” approach to branding and marketing
planning
• New look for publications, advertising (brand and retail)
• ’04 to present: brand advancement, enrollment
marketing, strategic PR
81. Every Student Counts goals:
• Reverse 4-year decline
• Increase enrollment by 1,900 students over
prior fall
• Increase credit hour enrollment by 900 FTE’s
• Change business as usual: marketing spending
(ROI) and practices
• Do it in 8 months
• Make it fun and non-threatening
82. Developed and implemented playbook
• 21 discrete strategies
• 80 staff engaged in the campaign
• Internal launch and public commitment
• 3 FTE additional staff
• Lipman Hearne consulted, produced expansive
creative tools
89. ESC impact
• 10,268 phone calls completed
• 65,000 emails (prospects and alumni)
• 134,396 postcards, personalized letters
created and mailed
• 156,005 fact sheets/brochures created and
distributed
• 10,323,400 radio, print and internet
impressions
90. ESC Results
• Headcount Goal was 1,901, actual was 1,904 (852
directly attributed to campaign)
• FTE goal was 900; actual was 716
• Marketing Investment was $522,333
• Net revenue for the year without state subsidy =
$4,054,984 ($642K under the net revenue goal of
$4.7MM)
• With state subsidy (at $579 per student) and ESC
tuition, exceeded the total net revenue was $5.5 MM
91. Beyond Every Student Counts:
Fall 2003: +1900 students
Fall 2004: + 605 students
Fall 2005: +15% new enrollment; largest
class ever
Fall 2006: Best quality class ever
Fall 2007: First ever waitlist, +8%
freshmen
Positive revenue throughout