The High-Value Customer: The Prospective Student
1 Nov, 2004
By: Daniel SearsColleges, universities and community colleges operate an interesting business. It’s a business where they deliver a very valuable and necessary service (education and learning) to a captive customer (the student) for an extended period of time (2 years, 4 years, or maybe a lifetime) while generating operating revenue from that customer during that entire time (tuition, housing, meals, etc.) and having the fortunate opportunity to highly influence that customer’s view of themselves and the world. Few businesses can generate that much revenue (over $100K for the most expensive 4-year undergraduate programs) from a single customer for such an extended period of time and have the tremendous opportunity to deliver a customer experience that imprints their brand so deeply into the persona of that customer while building super strong lifelong relationships (think of rabid college sports fans).
Within this context, in any other industry, the student would unequivocally be considered a high-value customer and treated appropriately. (And, in some ways, these Institutions of Higher Education, or IHEs, do treat students as high-value customers by building educational offerings around their needs.) Other industries—such as automotive, healthcare or financial services—would jump at the opportunity to have this level of impact on their customers; frankly, they spend millions of dollars every year trying to do just that. Oddly enough, many IHEs still don’t consider themselves as being in a service business, or even as having customers. But times are changing and IHEs are struggling to adapt.
When you look at the range of customers or constituents that IHEs serve—prospective students, parents, guidance counselors, administrative staff, volunteers, enrolled students, faculty, alumni, donors, friends, etc.—it becomes clear that the web of interconnected relationships between these parties is vastly more complex than is typically found in traditional service businesses. Yet, these different groups all influence the decisions of one another, especially those of the primary customer, the student.
Since it becomes imperative for the school to effectively manage all of those relationships to build trust with the customer, it''s not surprising that IHEs are rapidly adopting Customer (or Constituent) Relationship Management strategies and employing CRM technology solutions to aid them.
How CRM Can Help IHEs
It’s important to provide a definition of Customer Relationship Management, or CRM. Successful CRM is much more than just a technology. CRM is an enterprise-wide strategy of developing an organizational culture that focuses on customer-centricity and supports the multi-channel development of customer intimacy across the customer lifecycle. It’s about developing enduring relationships based on trust that lead to the creation of real value for both parties. Successful CRM usually requires a culture shift, the establishment of processes to support the strategy and multi-channel technology to enable the processes and people to interact with customers and aggregate the vast amounts of relationship-related data that is collected, processed, analyzed and acted upon. Good CRM is not easy, but it can deliver powerful results.
Within the world of Higher Education, most administrators struggle with the concept of CRM, because most don’t see IHEs as providers of educational services that have traditional customers. In many ways, IHEs are the perfect example of a business entity that is being driven to recognize students as high-value customers. It’s important to recognize that during the evaluation and decision-making process of a college-bound student, that student’s parents exert a tremendous amount of influence, as do their high school guidance counselors, friends and the college recruiters. Selecting a college or university is a very big decision that most students and parents expect to only have to make once. The cost of a 4-year degree today runs upwards of $100K which, next to purchasing their first home, is arguably one of the biggest decisions that student will make in their lifetime.
Every school has some form of customer relationship management in place, whether or not a unified strategy exists to support it. More than likely, from a technology perspective, there is no common data repository infrastructure, no common set of processes and best practices being applied, no unified CRM software platform with a robust feature set, no single comprehensive view of the “customer”, etc. For many institutions, CRM is ad hoc, disjointed and inefficient. It’s neither in tune with the needs of the customers (student, parents, and guidance counselors) nor the system users (recruiters, administrative staff, telecounselors, etc).
Unlike an Enterprise Resource Planning System (ERP) or Student Information System (SIS), CRM shouldn’t be a standalone system. The integration of the CRM system with web, SIS, ERP, legacy and other IT systems is critical to present all the various interaction, transaction and communication data into a single comprehensive view of the “customer” accessible across communication channels the organization. IHEs have many touch points along which they can build and reinforce strong, enduring relationships with the many constituents that are involved in the decisions made by the student.
CRM solutions can offer a significant positive impact on an IHE’s ability to build and manage customer relationships across so many different constituents, interactions, processes, channels of communication and functional areas, including prospecting, recruiting, admissions, financial aid, registrar, student services, advancement and development, alumni relations and university-wide communications. It could be argued that IHEs are practically in the business of communication.
Like so many other industries, the Higher Education industry is undergoing some dramatic changes—tight or shrinking budgets (the “do more with less” credo), tech-savvy students beginning to drive relationship development, upwardly spiraling tuition costs, burgeoning online and distance learning competition from non-traditional educational sources, changes in student expectations, the adoption of new organizational models like Strategic Enrollment Management, falling rates of retention persistence, and so on. Many IHEs are struggling just to catch up, let alone keep pace with the institutions that lead the pack in adapting to this change. With so much change happening so rapidly, it’s fortunate for most IHEs that they operate as non-profits because it’s an expensive transition that requires a lot of trial-and-error. Fortunately, savvy IHEs can learn the hard-won insight and best practices for customer service from the commercial industries that have been using CRM for over 10 years to adapt their businesses to a rapidly changing world.
A good portion of the revenue (and operating budget) for most IHEs comes from tuition and other related expenses such as food, housing, etc. Students (and their families) are the source of this revenue. IHEs that learn to successfully manage customer relationships from the first high school contact all the way through graduation develop a significant advantage in the highly competitive world of Higher Education. Customer service as it relates to customer acquisition and retention has to become a priority. Customer acquisition is an expensive process in its own right. But retention is critical, especially when you consider that a student represents 2-4 years (or up to 5 years, if you look at national averages) of revenue and they make the final decision as to the school they attend.
Many enrolled college students feel as though they’re living in a benevolent krytocracy (government by judges) disguised as an open meritocracy(government by intellectual elite). They’ve been told that to learn they need to be instructed, and in many ways that educational model has stood the test of time. Oddly enough, it can be argued that faculty exert the greatest influence over the student’s learning experience, yet in the eyes of many students the faculty do not have a customer service orientation. That’s because the faculty are paid to do research and teach and encourage scholarship, to be pedagological. In fact, many only agree to teach because that’s required of them to perform the scholarship and pay the bills. They aren’t often given incentives to deliver better customer service, because if they were the entire system of tradition would fall apart.
Unfortunately, this is a serious disconnect in the successful delivery of the educational service and ultimately the retention of the student. With nearly 40 percent of all college students in the United States attending two or more schools over the course of their college career, why do IHEs continue to treat students as voluntary indentured servants who just happen to be paying for the privilege of attending that school? What happened to the concept of customer service?
For these and a lot of other reasons, many IHEs are now focused on improving the enrolled student experience and related retention issues through use of student satisfaction surveys, better advising services, reorientation of faculty compensation and privileges on the delivery of multichannel service that meet certain standards, class offerings and schedules based on student voting, more frequent and effective communications, and generally a greater regard for the satisfaction of the students, who in turn influence the satisfaction of the parents that are typically paying the school expenses. IHEs are listening to customer complaints and are recognizing that complaints, when well-defined and actionable, are the best source of ideas for improvement and, in turn, customer satisfaction. It’s ironic that students hold a great deal of power in the school relationship (even though many don’t realize it): they (along with their parents) decide into which institution to invest those tuition dollars, they have the free-will to choose which IHE to attend, and they determine the market’s perception of a given IHE. The student of today is exerting themselves in ways that are changing the famed “college experience” to be more customer-friendly.
Taking the Student-Customer View
Let’s put ourselves in the shoes of the student and start from the beginning of the college experience journey, when they are in research and decision-making mode. Since the successful delivery of customer service is best defined from the customer’s perspective and is usually measured as some form of customer satisfaction, understanding their experiences can help us understand the opportunities that exist to improve those early experiences and to deliver better customer service to them while they’re still making their decisions.
Nearly all IHEs invest substantial portions of their marketing dollars on student acquisition activities intended to help them finely shape their class cohorts. They are using highly compelling images, impactful messages, interactive web sites, proactive phone calls and e-mails, full-color glossy view books, well-choreographed campus events and rather sophisticated multimedia marketing techniques and tools. Even 15 years ago, IHEs had a lot fewer marketing tools available at their disposal: typically just view books, phone calls, high school guidance counselors, campus visits and word of mouth.
Remember, IHEs are selling a relatively intangible service that has a value largely based on market perception. Students have no idea what they’ve bought until they are well into their first year of school and realistically cannot make an informed decision if their investment was worthwhile until after they’ve graduated. To help themselves, they have to listen to the market: past students, the annual U.S. News & World Report on colleges, college view books and marketing collateral, college recruiters, friends, guidance counselors and other sources. In many ways, students are buying a dream or a vision of the future; it just so happens that they are intimately involved as an active participant in achieving that vision. Like in all businesses, positive word-of-mouth can speak a thousand times louder than the most sophisticated marketing collateral.
College-bound students of today are more tech-savvy than ever before. These are kids who have grown up with the Internet and somehow successfully navigate an onslaught of interactive information and competing messages on the Internet and TV on a daily basis. It’s an everyday occurrence to find them instant messaging with multiple friends while simultaneously talking on their mobile phone, or being on a phone call with friends while sending an email and watching TV, or playing a videogame while listening to music. These are kids who multitask quite effectively and have short attention spans. These are kids who are part of a consumer culture that is based on the expectation of immediate, personalized service delivered at Internet speed in a fully connected world. When these students are researching potential schools they’re operating at Internet speed, looking for those schools that can communicate with them in real-time on the Internet to answer their questions. Another school is nothing more than a second and a mouse-click away. Keep in mind that every time a student approaches a school they are arriving with an expectation. It’s that school’s opportunity to shine and to live up to the expectation.
During the admissions and enrollment process, many IHEs struggle to deliver levels of service to meet these expectations. The reasons for this struggle can be best attributed to common issues: old IT system infrastructure not ready for the web, budget priorities and a lack of vision toward delivering a highly compelling customer service experience. Traditionally, IHEs have cared about the well-being of the student insofar as it relates to that student’s ability to learn. Most IHEs haven’t taken a true customer service orientation with respect to the opinions of the student’s experience unless it in someway negatively impacts the student’s ability to learn. But that is rapidly changing as well. The Internet has shifted things around on deck.
Many IHEs, especially at the front end of the prospecting and recruiting process, are beset by hived organizational structures that are based on traditional models of hierarchy and sequential processes. While schools have adopted the Internet for the sharing of research, delivery of coursework and communication on campus, many have yet to adopt the Internet in a meaningful and sophisticated way to match how today’s college-bound students use it. And I’m not talking about just sending a big e-mail blast to 10,000 prospective students. For instance, during the admissions and enrollment process, students are often subjected to separate functional departments with separate administrative staff, processes and IT systems that don’t talk with one another. Many of the departments that touch a prospective student prior to matriculation are not well-integrated in a holistic manner so it becomes difficult to deliver a consistent customer experience to that student. A prime example is the kid who submits an application online but then is forced to call to check on the status and finds that the person on the other end of the phone can’t readily answer their question because they don’t have access to the systems which contain that data. It’s the common case of old legacy systems not talking with the new interactive web site and admissions systems.
So, you have a savvy but inexperienced customer, a web of interconnected and highly influencing relationships, a service business with complex organizational, cultural and technological challenges, an intangible but highly valued service, and an industry experiencing some significant catalysts for change. Sounds like the challenges facing most large, sophisticated contact center enterprises.
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10 Best Practices for Strategic Enrollment Management:
- A Single, Comprehensive View of Student Information
Challenge: Student information is locked up in disparate systems, collected and maintained by different groups and departments, and is not easily accessible by those who need it when they need it.
Best Practice: Integration of various data sources into a “single” comprehensive view of all student contact information with configurable views for each user type. - Multi-Channel Communications
Challenge: Cannot track or view past communications activity across all channels of communication such as e-mail, phone, web, chat, campus visits, etc.
Best Practice: Deployment of CRM technology that aggregates interaction information across all channels of communication and media types. - Student Segmentation
Challenge: The inability to identify high-value likely-to-enroll prospects.
Best Practice: Utilize filtering technology to segment your high-value, likely-to-enroll candidates from low-value, “bubble” candidates.
Result: Increased enrollment of valued, targeted students. - Message Personalization
Challenge: Lack of personalization in messages, e-mail, and other kinds of communication to prospective students and their parents.
Best Practice: Personalize all messages, e-mail, phone and other kinds of communication to build trusted relationships with your prospects and customers.
Result: Increase enrollment of targeted students through power of personalization. - Single Voice Messaging
Challenge: Lack of message consistency between staff members and departments to students and parents across multiple channels.
Best Practice: Use a scripted knowledgebase to ensure consistency and accuracy of content.
Result: Reduce costs associated with redundant and conflicting information. - Web Self-Service
Challenge: Overwhelmed by large quantities of inquiries with not enough staff to respond in a timely fashion.
Best Practice: Allow prospective students, parents and guidance counselors to serve themselves via a personalized self-service web portal.
Result: Recruiters spend their valuable time recruiting high-value students. - Automated Assignment/Routing
Challenge: Lack of “interaction and issue” ownership results in poor response quality and multiple responses to inquiries…or worse, no response at all.
Best Practice: Apply business rules based on Best Practices to assure ownership and expedite follow-up.
Result: Reduced costs through elimination of manual entry and duplication and greater efficiency. - Automated Workflow
Challenge: Knowing where a prospective student is in the lifecycle and moving them to the next stage.
Best Practice: Automate process steps based on activity or lack or action or response from the prospect or staff member.
Result: Increase enrollment of valued, targeted students through selective/automated workflow. - Accountability
Challenge: Knowing “who” handled “what” and “when” and “why”.
Best Practice: Self-documenting activities that automatically generate a non-editable “audit trail” to improve quality. - Measure Results
Challenge: Determining service levels and performance metrics and identifying trends.
Best Practice: Analyze interactions for quality of response, measure recruiter performance, pinpoint the most cost-effective method of communications.
Result: Increase customer satisfaction levels and lower IT administrative expenses.
A comprehensive white paper on these best practices can be downloaded at www.education.talisma.com.
