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Schools not working leads?

Leads360 recently published a white paper entitled “Failing grades: Evaluating admissions processes at for-profit schools.”

The data in the report is shocking. It states most of the schools in the for profit sector are just not working their leads efficiently at all.

Here are some key findings:

  • Most schools did not follow best practices when sending out emails or calling back in a timely fashion
  • Some schools called leads too often, up to 82 times.
  • Some schools took too long to make first contact, allowing for the lead to become cold.
  • Optimizing process can greatly reduce waste.
Being a vendor in the education space for many years I often wondered what really happened to all of the leads that were being sent into the schools. These days all you hear are stories about the leads being over marketed to, when the real story is that most leads are not being marketed to enough.
How does this affect the industry from an economic perspective?
If you look at this from a macro perspective. If leads are universally being worked inefficiently, lead prices will remain low since the overall quality is always low.
Even though EDU has been hit hard with regulation, new competition continues to come into the market, continually pushing media prices higher. This in essence means that the vendor side of the industry is being squeezed on margin because the costs are going up and revenue is staying stable if not declining.
For the schools, several of them have cited lower growth in their quarterly reports due to massive changes in how they handle leads and the enrollment process. They changed compensation plans, and they also changed scripts to make them more compliant with the DOE regulations. What this has lead to is a focus on the process after a student is on the phone and perhaps taken a bit of attention away from actually getting the user on the phone first.
If enrollment rates and growth forecasts are dropping, it seems to make sense to look at the entire process rather than isolate one component.  I think there are lots of things that can be done to optimize the process flow at the for-profit schools. One of them is using better lead management and routing tools like Leads360. Outside of a technology solution, I think it makes sense to also have new funnel metrics for the vendors to help them enhance leads by setting expectations. I for one know a lot of vendors would love to have insight into how their leads are being worked and if they can enhance the process. For the most part the vendors do want to help or better understand the process. A more collaborative environment will make marketing more efficient but also more ethical in the long run.
There are a few considerations one should take into account when reading the Leads360 report too. They mentioned a school like AIU does not send out any emails. This could simply be part of their strategy. I suspect this was highly analytics driven a while ago and needs to be re-evaluated since the market has changed so much in the past 18 months.
The other part of this equation is that, we should ask more about what the consumer wants. Email and phone are somewhat old mediums of communication these days. Perhaps people want to be contacted on Facebook, Twitter or through IM? The Millenial generation is going to start demanding these new paths. It will be up to the advertisers to keep pace with their audience and develop new best practices. EG – what is the optimal number of times you can SMS a person before getting them on a phone call? What is the social etiquette about contacting someone on Facebook or Linkedin and how does that relate to advertising? How does a brand get invited into a user’s inner circle online?

Bridgepoint investor predicts boom in for profit edu

Michael Clifford, an early investor in Bridgepoint Education and Grand Canyon University gave his thoughts on the for profit EDU sector on the WiredAcademic site. 

For the most part, Mr. Clifford clearly states the value proposition of for profit EDU in the American economy. Nothing really new in the stats or the strategy. Overall, it is a solid business model long term. I agree with him.  I would also say he is trying to rally the troops (read investors) to come back to the sector. If I was a Buffet type investor, I would say there are some gems in the industry to buy and super low prices. Will you see lower prices? Probably, but you can always cost average at the point if you are a long term investor.

The one thing I think Mr. Clifford’s article ignores is the political situation in the US today. The vast majority of the for profit edu scrutiny was caused by two parties.  An infamous short seller, and teacher unions which were not represented at these booming schools. Put two and two together you see that the unions wanted these schools to feel some pain since they were not really good union organizations.  I think America needs to realize that unions are slowing America’s economic growth in some cases.

The larger reality is that the new generation of students coming into the market will demand online education instead. Once this happens unions don’t have a chance in terms of stopping this wave of change in how education is delivered.  At the moment, for profits are the only organizations set up to quickly create courses, staff, and deliver for this need.

Keep an eye on it and do watch as the political tone shifts greatly during the 2012 election….

 

 

For Profit Education Seal of Approval

Hmm, this one is interesting. An organization called the Coalition for Educational Success is creating a new “seal of approval.” The news was published on the Inside HigherEd website here. 

This article was interesting on so many levels and here is why:

Pros of the seal and organization:

1) Great branding which may build trust with students.

2) Self regulation is good

3) The coalition obviously has the ear of many government officials and is not shy to showcase it. 

Cons of the seal and organization:

1) Not all schools are onboard. Major players like Kaplan are the voice of the organization in many cases. What is preventing the big guy from pushing his agenda on everyone else and potentially crushing competition?

2) How will this seal be portrayed to potential students? What will it mean to them? Without this element, the seal is worthless. Kind of like making a new currency, if no one believes in it, it has no value.

3) There is no evident enforcement plan. Can you lose the seal once you get it? Who will penalize you if you make a mistake? Is there a penalty at all?

As much as I would like to say this is going to be useless, this organization might have legs to it, especially since Harris Miller is no longer the head of APSCU.  However, I think the next few months are crucial, if more schools don’t sign on the organization will fall apart and it will leave the for profit sector with a need for a unifying organization.

The Education Marketing Councils Best Practices

The Education Marketing Council published a series of best practices back in 2010. The practices cover the following topics:

1) Recommended language for marketing

2) Affiliate management

3) Phone marketing

4) Direct mail marketing

I think the guidelines are a good start for compliance within the industry but I also think they need to be more dynamic and continue to be refined as new sources of media become available. My suggestion to the council is to append these guidelines every 1-2 months.

I also think the marketing council should put together a training course for media buyers and potentially affiliates to get certified on these guidelines.

To review the full guidelines, please click here. 

Education Compliance

We recently came across this article on Education Compliance which was actually pushed out by an affiliate network. The article covers what can and can not be said in online education marketing quite well.

In our opinion I think the article reflects a popular set of rules and opinions. I think the most glaring issue in our industry right now is that there are a lot of marketers making changes to their campaigns to be compliant but there is little consistency between the schools in terms of how they view the laws and how they enforce them.

Here is the blog post from Media Trust.