How much and by when?The essentials of ROI-driven

enrollment marketing

Presented by Tom Abrahamson tabrahamson@lipmanhearne.com

What we’ll cover today

• The problem• ROI essentials • Case studies • Creating a plan (yes, today)

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”

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

So, what’s keeping you up at night?

How do you define ROI?

How do you measure ROI?

If you could wave a magic wand and achieve an enrollment goal, what

would that be?

What’s standing in the way?

ROI marketing context

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18

Non-Public White Black Asian Hispanic American Indian

The Chart

We are here

Tough if you’re in or around “white” states

PA: -13%NY: -8%WV: -8% OH: -5% NJ: -2%MD: -3%

338 colleges and universities

within a 100-mile radius of Philadelphia

533 colleges and universities

within a 200-mile radius of Philadelphia

Competition is fierce

We have a problem

Build-a-Bear GenerationCompetition

Money Worries

Most think we still own the conversation

International students

International students

Adults

International students

Adults

Stop-outs

International students

Adults

Stop-outs

Academic superstars

International students

Adults

Stop-outs

Academic superstars

Under-represented

Respondents

1,012 organizations

participated

101 colleges and

universities

2008 AMA/Lipman Hearne Survey:

Enrollment growth: 50%Experience with program/service: 38%Marketing campaign effectiveness: 35%Brand awareness: 30% Print advertising effectiveness: 17%

Impact of investments not being measured effectively in terms of:

2008 AMA/Lipman Hearne Study

“Half of my advertising budget is wasted. Trouble is, I don’t

know which half.”

David Pottruck

ROI–driven marketing campaigns

ROI Marketing catches students “business as usual marketing” often

misses.

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

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

Typical marketing spending models• Percent of sales• Competitive emulation• Containment: selective funding• Correlational analysis: cause and

effect• All you can afford

The marketer’s greatest skill is in defining ROI-type investment

opportunities.

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

6 STEPS TO AIM

1.Dream big

2.Dive deep

3.Pick your lures

4.Do the math

5.Write the playbook

6.Go fishing

1.Dream Big

Set reach goals

Look beyond today

2.Dive Deep

Segment current students

Examine enrollment trends

Prioritize who you can recruit, retain, or bring back

3.Pick Your Lures

Determine optimal market strategies for each segment (and not just new inputs)

4.Do the Math.

What is the tuition impact?

What will it cost to get them to apply, enroll, and persist?

Is it worth the investment?

ROI =Gross Margin – Marketing Investment

Marketing Investment

The formula :

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)

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%

ROI Metrics

Gross tuition per semester generatedby the 268 new students:

268 StudentsX $3,938 per semester

Gross tuition: $1,055,384

ROI Metrics

Investment:

$351,443 in scholarships (33% discount)+ $79,154 in additional staff

+ $527,692 in marketingTotal investment: $958,289

ROI Metrics

Net Revenue:

$1,055,384 (tuition revenue)- $958,289 (total investment)

Net Revenue: $97,095

ROI Metrics

ROI for the first semester:

$97,095 (net revenue)÷ $958,289 (total investment)

First semester ROI: 10.1%

ROI Metrics

Carried out through the first year:

268 first semester students+ 241 second semester students509 total student tuition payments

ROI Metrics

Carried out through the first year:

509 tuition paymentsX $3,938 per semester

$2,005,230 accumulated gross tuition

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%

Carried out over four years assuming 58% four-year retention of the cohort. Additional staffing is for recruitment only, notretention of new students.

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%

Year Two

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%

Year Three

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%

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 $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%

Total ROI Over Four Years

5.Write the Playbook

Prioritize strategies and tactics

High impact

Doable for fall ’09

Measurable

6.Go Fishing

Exact execution

Measure

Refine

Break

Case Study #1 Kettering University

The Perfect Fit

Kettering’s needs

Redefine/establish Kettering in the marketplace

Stop application decline

Be true to the brand

1.Kettering’s “big dream”

goals

Rigor in planning

Conducted focus groups, MPQ

Mapped new areas to target

Focus on “Perfect Fit”

Invested 8 weeks in planning

2.Kettering’s

“Deep Dive”

Micro-targeting

Right fit new suspects (not your great grandfather’s liberal arts college), dormant prospects, ets.

Special interest groups such as FIRST Robotics, Math & Science Consortium Schools

ParentsGraduate studentsReferrers

3.Kettering’s segments

and “lures”

If you can’t measure it, you can’t manage it.

“Follow the format and fill in the blanks”

Financial models created for eventual net revenue

4.Kettering’s Math

The Playbook

19 strategies developed to make the connection with the elusive “Kettering Type” of student

Avoid a catastrophic drop in Fall ’06 freshmen

5.Kettering’s Playbook

How Kettering managed AIM:

Launch/hooplaInvolved and updated the

community Constant monitoring of

progressCareful documentation of all

changes and adjustmentsConstant tracking of % to

goalCelebrated milestones

6.Working the Plan

“Perfect Fit” Campaign Communications

The “Perfect Fit”student is a bit confident, bordering on cocky

Kettering students are wired differently

Parents needed to know that Kettering is the right fit for their kids

Message platform was consistent and pervasive

Results: New students 2007-09

Projected

Expected

Results: Applications 2007-09

Case Study #2: University of Cincinnati

Every Student Counts

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

79

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

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

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

The brand work proceeded

Where it started: 2003

2005

2008

87

ESC Communications

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

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

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

Let’s write a Playbook…

1.Dream big.

What would be an amazing goal to achieve next fall?

2.Dive deep.

Now break it down: Pick a definable segment and

describe it.

3.Pick your lures.

Where will you find them and what tactics will you

employ? What’s your offer?

4.Do the Math.

What data will you interrogate?Calculate the revenue per

student – initially and over time

5.The Playbook.

When will you do it and how will you measure success?

Discussion