By Keith P. O’Brien
7 minutes estimated time to read
Part one of a two-part series
If you spend any time with enrollment leaders at colleges and universities, you get a sense of what the phrase “canary in a coalmine” means. Enrollment management sits at the forefront of the struggle to maintain a rapidly crumbling business model. One perceptive take on this business stated: “The entire multi-billion-dollar, 2,000-campus American college system depends overwhelmingly for its very existence on one resource: an ever-renewing supply of fee-paying undergraduates.”
The “perfect storm” has arrived where the diminishing supply of high school grads intersects with the contracting international student pool (a mainstay of tuition revenue). In fact, the higher ed sector operates in a “buyer’s market” where supply exceeds demand for college seats and most institutions must compete harder for undergraduates.
I use the term buyers’ market deliberately because higher ed operates as a marketplace where prospects and students—both traditional and nontraditional—are the customers. Students choose an institution and a course of study based on personal need and preferences, price and brand in return for a tuition expense. No other voluntary purchase by a person comes close to the life changing effect of choosing a college. How the university interacts with the student across the enrollment cycle (a uniquely long sales cycle) greatly influences the ultimate enrollment outcome.
Consumers inherently expect universities to understand them as individuals and provide the personalization, convenience and service they experience daily through Spotify, Netflix, Amazon Prime, WhatsApp, and Uber. Enrollment leaders struggling to seat a class that meets academic profile, tuition and diversity targets must treat their prospects and families as consumers. To influence consumers’ decision making institutions must embrace personalization: “delivering tailored, meaningful and relevant customer communications.” Personalization is no longer optional but rather a competitive necessity for business-to-consumer firms. And, higher ed institutions that ignore this market reality do so at their peril. Institutional leadership striving to spur enrollment quickly would do better to invest in personalization rather than other common (and much imitated) strategies such as tuition resets, going test optional, or launching market- orientated degree programs (cybersecurity, data analytics or health sciences).
Personalization and Nudging
Personalization influences a target audience’s behaviors by providing the right message at the right time. True personalization is neither easy to design nor implement: every prospect and admitted student have unique academic, financial, and wellness needs. And, “Dear Jane” emails no longer clear the bar. Data, however, are the lifeblood of personalization. Universities possess unequaled demographic and behavioral data across the student lifecycle. Implementing true personalization at scale–right message, right time, right channel—requires leveraging insights about human decision making.
A new approach to personalization lies in the application of behavioral economics. This discipline’s concept of “nudging” provides new insight on how people think, make decisions, and behave. A nudge involves “changing the presentation of choices for people so they’re more likely to choose one option rather than the other” — Michael Hallsworth, Behavioral Insights Team.
Nudging is not new to higher ed. Recently two studies found large-scale nudging had marginal impact on FAFSA completion and college enrollment, respectively: Nudging at a National Scale: Experimental Evidence from FAFSA Completion Campaigns and College Board’s Realize Your College Potential Campaign for Postsecondary Enrollment. The studies’ findings, however, miss the mark somewhat by not assessing the level of personalization employed. A comment from the report on nudging FAFSA completion is illuminating: “Our results suggest a more effective path to scale may depend on using advances in data science and technology to develop more targeted, personalized nudges.”
Personalization has traditionally been based on demographic attributes: age, gender, location, socio-economic status, and ethnicity. Two people with exactly the same socio-economic and demographic characteristics can choose products in very different ways: one may focus on value and cost, the other on quality and durability. Traditional “personalization” approaches would message them the same way. But this approach will likely fail because the quality-conscious person won’t respond positively to a price-focused message. It is the individual’s attitude (value versus quality) towards the decision that motivates purchasing behaviors.
Human attitudes explain the “why” of human behavior. And personalization based on a person’s attitudes will generate more favorable responses than other approaches. For higher ed institutions, accordingly, the mindsets of prospects, students and alumni play a critical role in how they make decisions.
Identifying each student’s mindset and tailoring communications to individual attitudes may sound complicated, time consuming, and costly. But attitudinal personalization is viable as:
- The necessary student data already exist on every campus in the CRM, LMS and SIS.
- Artificial intelligence can translate existing behavioral data into a profile of the student’s attitudes. (A process that does not use any Personally Identifiable Information.)
In my next blog, I’ll show how one university used just 18 data points on admitted students to deliver attitudinal nudges that reduced melt.
Two free resources to learn more about:
- Personalization in higher ed, attitudinal nudging and AI’s game-changing potential: download our free eBook, Artificial Intelligence and Higher Ed
- How attitudes, “think-alike mindsets”, and nudging drive human decision making: get our free whitepaper, Why Attitudes Drive Decision Making: Reimagining Personalization
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