Enrollment Influencers

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					  The Science of Enrollment
     The Art of Admission
 The Business of Financial Aid
Virginia Association of Independent Schools


                 May, 2009
                    David Erdmann
           Dean of Admission and Enrollment
                    Rollins College
      The Year in Review


• Inquiry and Application Trends
• Financial Aid Trends and Policies
               Inquiry and Application Trends
               National   National   National    Virginia    Virginia   Virginia


               Increased Same        Decreased   Increased   Same       Decreased


Boarding         28%        42%         31%         31%         31%        38%
Inquiries

Boarding         22%        37%         41%         12%         44%        44%
Applications


HS Day           19%        46%         35%         30%         48%        21%
Inquiries
HS Day           26%        35%         39%         36%         36%        27%
Applications
               Virginia Trends by Region
       Percentages of Schools Reporting Decreases
                           Northern Northwest   Richmond   Hampton Roads   Valley   Southwest   Totals

# Responding                  13        5          12           9           9          3         51
LS Day inquiries             33%      100%        14%          50%         17%                  31%
LS Day applications          50%      100%        29%          67%         50%                  50%
HS Day inquiries              0%       0%         29%          29%         40%                  21%
HS Day applications          14%       0%         29%          43%         40%                  27%
HS Boarding inquiries                 67%         67%                      50%                  55%
HS Boarding applications              67%         33%                      25%                  44%
                        Financial Aid Trends

                   National    National   National    Virginia    Virginia   Virginia

                   Increased    Same      Decreased   Increased    Same      Decreased
Aid offers to        40%        35%         25%         70%        28%          2%
new students
Aid applications     92%         6%          3%         89%         9%          2%
from returning
students
           Financial Aid Policies


                                     National   Virginia
Aid based on need                     98%        95%
Aid exceeds need                      18%        24%
Merit aid based on athletic talent     4%        9%
Merit aid based on academic talent    30%        31%
Merit aid based on other talent       19%        15%
                    Enrollment Equation



 External        Internal      Building      Financial
Environment    Environment   Relationships      Aid
                                                         Enrollment


         Science                Art          Business    Enrollment
  The Science of Enrollment
        Natural Laws

• External Factors
   –   Demographic Shifts
   –   Migration Barriers
   –   Generation Attributes
   –   Power of Reputation
• Internal Factors
   – Power of Word-of-Mouth
   – Power of Satisfaction
   – Power of Happy Employees
Virginia Average Daily Membership Projections
            (Source: Weldon Cooper Center for Public Service www.weldoncoopercenter.org)




• Annual births will remain above 100,000, increasing
  slightly each year.
• Annually Virginia gains an average of 11,000 school age
  children from migration.
• Private school enrollment and home schooling are on the
  rise, but will not affect ADM significantly.
• The number of dropouts has declined considerably.
• ADM will increase by more than 32,000 in the next five
  years.
                     State of Virginia
                Number of Births 1940 – 2000
                       (Source: Weldon Cooper for Public Service www.weldoncoopercenter.org)




100000




                                                                                                        Births




50000




     0
         1940   1945     1950   1955   1960    1965   1970   1975    1980   1985   1990   1995   2000
           Virginia Schools
 Average Daily Membership Projections
                   (Source: Weldon Cooper Center for Public Service www.weldoncoopercenter.org)

1250000


1230000


1210000


1190000


1170000


1150000                                                                                             Average Daily Membership


1130000


1110000


1090000


1070000


1050000
            7




                          9




                                        1




                                                      3




                                                                    5




                                                                                  8




                                                                                                0
         99




                       99




                                     00




                                                   00




                                                                 00




                                                                               00




                                                                                             01
       -1




                     -1




                                   -2




                                                 -2




                                                               -2




                                                                             -2




                                                                                           -2
    96




                  98




                                00




                                              02




                                                            04




                                                                          07




                                                                                        09
  19




                19




                              20




                                            20




                                                          20




                                                                        20




                                                                                      20
  Virginia: Projected High School Graduation
                             (Source: Western Interstate Commission for Higher Education)

100000


 90000


 80000


 70000

                                                                                                            Am-Ind
 60000
                                             8th grade                                          3rd grade   Asian
                                             now                                                now
                                                                                                            Black
 50000
                                                                                                            Hispanic
                                                                                                            White
 40000
                                                                                                            Total

 30000


 20000


 10000


     0
         2008-09 2009-10   2010-11 2011-12    2012-13 2013-14      2014-15 2015-16      2016-17 2017-18
                     Actual and Projected Percentage Changes in
                            Public High School Graduates
                                                 (Source: National Center for Education Statistics (NCES))


             40%




             30%




             20%




             10%
Percentage




                                                                                                                                         2002-2008
                                                                                                                                         2009-2014

              0%
                    Connecticut   M aine   M aryland   M assachusetts   New Hampshire   New Jersey   New York   Rhode Island   Vermont



             -10%




             -20%




             -30%
                                                                            State
                              X-Generation Parents
(Source: The Next 20 Years: How Customer and Workforce Attitudes Will Evolve, Howe and Strauss, HBR, July-August 2007)




  ―Gen Xers…will be extremely protective of their
  offspring; large numbers will spend hard-earned
  money and may relocate to ensure the quality of
  their children’s schools and the safety of their daily
  lives.‖
         What Families Seek In Schools
             (Source: School Daze, Prince and Grove, Worth Magazine, Sept. 2007)




•   Focus on academic advancement--83%
•   Academic reputation—64%
•   Percent of grads who go to prestigious colleges—64%
•   Extracurricular programs—63%
•   Student/teacher ratio—62%
•   Successful alumni—57%
•   Campus facilities—41%
•   Exposure to diverse student body—25%
•   Religious affiliation—14%
    Millennial Family Expectations

•   Frequent, personalized communication
•   Individualized program
•   Clarity and consistency
•   Excellent teaching
•   Significant adult/student relationships
•   Supervision and safety
                               Gen Yers
        (Source: The Next 20 Years: How Customer and Workforce Attitudes Will
                  Evolve, Howe and Strauss, HBR, July-August 2007)




―As the first generation to grow up with mobile digital
  technology, Millennials expect nonstop interaction
  with their peers in forms that would have been
  unimaginable to prior generations of young adults.‖
The Power of Word of Mouth

   Word of mouth generated:
    •   9% of inquiry pool
    •   56% of applicant pool
    •   54% of accept pool
    •   77% of enrolled pool
            The Power of Reputation


―Stronger‖ Reputation
(1:4 Win:Loss Ratio)

Reputation Tropic


(1:1 Win: Loss Ratio)       X

Reputation Tropic

―Weaker‖ Reputation
(4:1 Win:Loss Ratio)
                                        A Satisfied Customer Is Loyal
                                                              (Harvard Business Review July-August 2008)


                                                                                                                               apostle
                  100%
                                                                                                           zone of affection




                         80

                                                                              zone of indifference
   Loyalty (Retention)




                         60




                         40
                                   zone of defection




                         20


terrorist
                              1                             2                         3                          4                           5
                          extremely                    somewhat                   slightly                   satisfied                     very
                         dissatisfied                  dissatisfied             dissatisfied                                             satisfied


                                                                         Satisfaction Measure
                                                                                                                      Mean Ratings
                                                                     Co
                                                                       ur
                                                                         se




                                                                                                    3.0
                                                                                                          3.5
                                                                                                                4.0
                                                                                                                                       4.5
                                                                                                                                                                 5.0
                                                                                                                                                                       5.5
                                                                                                                                                                             6.0
                                                                            v          ar
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                                                                    Ac
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                                                                                                                                                                                   Satisfaction Surveys




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                                                                                                                         School 2 Students
                                                                                                                                             School 1 Students
                                                                                                                      Mean Ratings
                                                                     Co
                                                                       ur
                                                                         se




                                                                                                    3.0
                                                                                                          3.5
                                                                                                                4.0
                                                                                                                                 4.5
                                                                                                                                                               5.0
                                                                                                                                                                     5.5
                                                                                                                                                                           6.0
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                                                                                                                                                                                    Parent Ratings




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                                                                                                                                                                                 Satisfaction Surveys




                     lik                ni                  Se                       er
                         ely              tie                    rv
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                                                                                                                         School 2 Parents
                                                                                                                                            School 1 Parents
  The Power of Faculty Opinions
        (Source: To Thine Own Staff Be Agreeable, HBR, June 2007)




―…service companies are on average more
  likely to be growing (in terms of sales) if
  employees’ opinions of the company are
  better than customers’. Similarly, sales are
  more likely to be falling if customers think
  better of the firm than workers do.‖
                    The Links in the Service-Profit Chain
                                              (Harvard Business Review July-August 2008)



                Operating Strategy and
                Service Delivery System




                                           Employee                                                                        Revenue
                                           Retention                                                                       Growth
   Internal                                                      External
                         Employee                                                     Customer             Customer
   Service                                                       Service
                        Satisfaction                                                 Satisfaction           Loyalty
    Quality                                                       Value
                                           Employee                                                                       Profitability
                                          Productivity




                                                             service concept:                         retention
 workplace design
                                                             results for customers                     repeat business
 job design
                                                                                                       referral
 employee selection
 and development
 employee rewards
                                                                             service designed and delivered to
 and recognition
                                                                             meet targeted customers’ needs
 tools for serving customers
                                                                                                                   Mean Ratings
                                                                      Co
                                                                        ur
                                                                          se




                                                                                                     3.0
                                                                                                           3.5
                                                                                                                 4.0
                                                                                                                                      4.5
                                                                                                                                                             5.0
                                                                                                                                                                   5.5
                                                                                                                                                                         6.0
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                                                                                                                       School 2 Faculty
                                                                                                                                          School 1 Faculty
         The Art of Admission
         Building Relationships

• Message
   – Defining school’s uniqueness
   – Matching school programs with family desires
• Tools of the Trade
   –   Leadership
   –   Staff
   –   Collateral
   –   Technology
      The Power of Differentiation

      High


             Garden
             of Eden                 A                 C
                                         Power Alley
                       Power Alley




                                     B                 D



                                                           Death
                                                           Valley
Low                                                                 High

                                          Price
                                 The Interest Continuum


                   100%

                       90%

                       80%

                       70%




Required to Increase
  Family Interest      45%




                       

                                 
                             0 Awareness Curiosity   Curiosity   Interest   Desire Commitment Commitment
                                         (Web Visit) (Inquire)   (Visit)    (Apply) (Enroll)  (Graduation)


                                                          Family Interest Level
              Admission Funnel
             The Good Old Days
Universe
                    Word
                     of
                    Mouth
Inquirers




Visits


Applicants

Accepts

Enrolled
                                                     Admission Funnel
                                                         Today
Universe
         Shotgun Marketing:                  Target Marketing:          Word    Target Marketing:          Shotgun Marketing:
         Internet, Direct Mail,              Videos, Web sites,          of     Videos, Web sites,         Internet, Direct Mail,
         Consortium Web sites, Advertising   School Fairs, Receptions           School Fairs, Receptions   Consortium Web sites, Advertising
                                                                        Mouth
Inquirers



                                     $                     $                        $                      $


Visits

Applicants


Accepts


Enrolled
            The Business of Financial Aid
       Designing a Sustainable Financial Model

• Challenges
  –   Cost outpacing willingness/ability to pay—middle class squeezed out
  –   Increased demand for aid from returning students
  –   Discount rates increasing—taxing institutional resources
  –   Demands on aid budgets
       •   Fill desks and beds
       •   Talent
       •   Diversity
       •   Tuition Remission
• Solutions
  – Align resources with institutional goals
  – Redistribute aid
              Financial Aid


Philosophy       Objectives      Discount Rates

                       Full
 Need-based
                    Enrollment

    Merit             Talent


                    Diversity
                                         Independent School Family
                                           Economic Bi-Modality
                        80%



                        70%




                        60%



                        50%
Percent of Enrollment




                        40%                                                                                       Family Contribution




                        30%



                        20%




                        10%



                        0%
                              $0-7,000    $7-14,000   $14-21,000       $21-28,000         $28-35,000   >$35,000
                                                           Estimated Family Contribution (EFC)
                                      Case Study: Family Ability to Pay


                      90%
                                                                                                     80%
                      80%
                                                                                               70%
                      70%
Percent Who Can Pay




                      60%
                                                                                                           Boarding
                      50%                                                                                  Day

                      40%

                      30%

                      20%
                                       12%
                            8%
                      10%        6%          6%   5% 3%                      4% 4%
                                                              1% 3%                   0% 2%
                      0%
                             0%         1-20%     21-40%      41-60%         61-80%   81-99%     Full
                                                           Percent of Cost
  Financial Aid Case Study
    Boarding/Day School

• Discount Rate = 25%
• Aid Distribution
  – Tuition Remission
     • 5% of student body
     • 23% of aid budget
  – Diversity
     • 12% of student body
     • 31% of aid budget
  – Other
     • 83% of student body
     • 46% of aid budget
      Case Study: Aid Distribution by Ethnicity

70%
                                    62%
                                 60%
60%


50%

                                                                                          Percent of
40%                                                                                       Population
                                                                                          Percent of Aid

30%

                                                                            21%
20%         17%


10%                                               7%                              8%
       6%
                    4%                       4%
                         3%                             3% 2%     2% 2%
0%
       African-   Asian/Asian-   Caucasian   Hispanic   Middle-   Other   International
       American    American                             Eastern
      Case Study: Aid Distribution by Ethnicity
90%


80%                                     78%


70%


60%


50%
                                                                                              Percent of
              38%                                                                             Population
40%                                                                                           Percent of
                                                                                              Aid
                                              29%
30%

                                                         19%
20%

                                                                                    10%
10%      6%                                                                    6%
                                                    5%
                                                                3% 4%
                          1% 1%
0%
      African-American   Asian/Asian-   Caucasian   Hispanic   Multi-racial   International
                          American
              Case Study: Changes in Family Income
                     2007-2008 to 2008-2009

60,000


40,000


20,000
                                                     Caucasian

                                                     Students of
     0                                               Color
          0      5    10   15    20   25   30   35

-20,000


-40,000


-60,000
   Case Study: Changes in Family Contribution
            2007-2008 to 2008-2009

3,000




2,000




1,000                                          Caucasian

                                               Student of
                                               Color
    0
         0   5   10   15   20   25   30   35


-1,000




-2,000




-3,000
                                      Case Study: Aid Relative to Need
                       $40,000




                       $30,000




                       $20,000
Aid Relative to Need




                       $10,000

                                                                                                        Day
                                                                                                        Boarding
                            $0
                                  0    20   40   60   80       100        120   140   160   180   200


                       -$10,000




                       -$20,000




                       -$30,000


                                                       Individual Cases
                          Case Study: 2007-2008 Awards Relative to
                                     Demonstrated Need
(Note: Cases about the horizontal line $0 were awarded aid in excess of need by the amount indicated; cases below the line were awarded aid less
                                                     than need by the amount indicated.)




                        $20,000


                        $15,000
 Aid Relative to Need




                        $10,000


                         $5,000
                                                                                                                                       Boarding

                             $0                                                                                                        Day
                                    0   10   20   30         40           50         60        70         80          90        100

                         ($5,000)


                        ($10,000)


                        ($15,000)


                        ($20,000)



                                                                  Individual Cases
                                Case Study: 2008-2009 Awards Relative to
                                           Demonstrated Need
                          (Note: Cases above the horizontal line $0 wee awarded aid in excess of need by the amount indicated; cases below the line were awarded aid
                                                                          less than need by the amount indicated.)




                         20,000.00
Award Relative to Need




                         15,000.00


                         10,000.00

                                                                                                                                                           Boarding
                          5,000.00
                                                                                                                                                           Day

                              0.00
                                      0                20                 40                60                 80                100                120
                         (5,000.00)


                    (10,000.00)


                                                                                           Cases
                Price/Demand/Aid Relationships
                Net Tuition Revenue Argument
                              D (Demand)

P (Price)                          a                           b   d


                                               Financial Aid




                   Full Pay                Partial Pay
                                                           c
                                                                   e




            0                    210                      300 320
      Bringing It All Together


• The Anatomy of Enrollment
• Ways to get ahead and stay ahead
                    Anatomy of Enrollment

                                                             Admission/
                                                              Outreach

                                                                          Marketing

                              Word of mouth
                              •Graduates
                              •Current families
                              •Departers


   Marketplace                      Experience                   Information Flow


                                                                          Commitment


                              Admission/
Awareness        Curiosity                        Interest         Desire       Financial Aid
                             Relationships
     Ways to Get and Stay Ahead

• Science—Leverage enrollment’s natural laws
   – Be market knowledgeable
   – Understand generational dynamics
   – Deliver on promises made
• Art—Practice, practice, practice
   – Refine message
   – Assemble the right tools
• Business—Increase financial aid ROI
   – Analyze aid allocations
   – Align aid with enrollment goals
   – Flatten the award curve

   David Erdmann: derdmann@rollins.edu
   Essex Institute: www.essexinstitute.com
   Powerpoint: www.erdmannconsulting.com

				
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