Using ROI to Make Your Case

Tom WilloughbyVice Chancellor for Enrollment, University of Denver

Greg Eichhorn Vice President for Enrollment Management and Dean of Admission, Albright College

Madeleine Rhyneer Vice President for Enrollment Management, Albion College

Challenging times

• Cost of doing business is up• Demands and expectations are high• Budgets are limited

Challenging times require different leadership skills

Enrollment leadership skills for tough times• Strategic planning• Data mining• Entrepreneurial thinking• Focus on return on investment

• Expenses = things you have to do• Investments = things you choose to do

Expenses vs. investments

Colleges are good at expenses

• “Because we’ve always done it that way”• “The community loves this event”• “Our competitors all do this … we should too”

Advance enterprise goals• Enrollment head count and revenue• Quality expectations• Demographic goals

Produce measurable ROI• Every dollar invested produces more than

$1 in net tuition revenue

Investments that survive budget scrutiny

Tie investments to outcomes• Follow enrollments back to first source of inquiry

– How does each category of inquiry convert to applicants?– How much are you investing for each category?

Decide what is an investment and what is an expense• Investment = provable ROI tied to enrollment revenue or goal• Expense = legacy spending not tied to revenue or goal

How best to make your case

Framework for evaluating recruitment investments

Tie investments to qualitative goals• First source of inquiry tied to enterprise goals• Students contributing to changes in profile

– Higher academic ability– Diversity– Out-of-state markets– Building enrollments in specific academic programs

Tie investments to financial outcomes• First source of inquiry tied to enrollments

– How does each category of inquiry convert to enrolled status?– How much are you investing for each category?– What revenue does each source generate?– What is your return on investment?

Framework for evaluating recruitment investments

First source of inquiry Inquired Applied Admitted Enrolled

Student Search 7,500 1,800 1,377 207

High School Visits 1,500 450 203 51

College Fairs 2,000 900 405 69

First-Source Application N/A 600 300 140

First-source analysis

Search High School Visits College Fairs

Cost (full cost) $175,000 $50,000 $100,000

Enrolled 207 51 69

Revenue per enrollment net of institutional aid $15,000 $15,000 $15,000

Net revenue $3,105,000 $765,000 $1,035,000

Revenue net of program cost $2,930,000 $715,000 $935,000

Return on investment $16.74/$1 $14.30/$1 $9.35/$1

Compare ROI across activity groups

A diversified investment portfolio

When students appear to be searched

Source: Royall & Company (Percentages represent unique student populations)

Seniors

20%

Juniors

30%Sophomores

50%

Available in two or more years38%

Available only assophomores19%

Available only asjuniors24%Available

only asseniors19%

Source: Royall & Company (Percentages represent unique student populations)

When students appear to be searched

Entering Class 2006

Entering Class 2007

Entering Class 2008

Entering Class 2009

Entering Class 2010

Entering Class 2011

Entering Class 2012

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

76,384

77,759 72,67553,693 86,935 74,720

80,907

64,490

24,24044,831

45,555

58,48855,461

49,672

58,487 59,764 60,78242,071 48,555

34,486

Sophomores Juniors Seniors

Albright’s Search contact volume by grade levelEntering Classes 2006-2012

Entering Class 2006

Entering Class 2007

Entering Class 2008

Entering Class 2009

Entering Class 2010

Entering Class 2011

Entering Class 2012

0

5,000

10,000

15,000

20,000

25,000

30,000

4,777

8,964

8,617

4,615

7,3407,438

6,4042,508

4,110

4,130

5,4966,129 5,070

4,258

6,731

11,507 10,693

5,686 6,8884,929

Sophomores Juniors Seniors

Albright’s Search Inquiry VolumeEntering Classes 2006-2012

2006 2007 2008 2009 2010 2011 20120

100

200

300

400

500

600

459

525 509541

485517

410

Enrollment growth over same periodEnrollmentsEntering Classes 2006-2012

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

49,672

67,225

Entering Class 2012 Entering Class 2013

In order to increase activity, greatly increased senior marketingPurchased Senior ContactsEntering Classes 2012-2013

41132 41146 41160 41174 41188 41202 41216 41230 41244 41258 41272 41286 413000

500

1,000

1,500

2,000

2,500

Entering Class 2012 Entering Class 2013

2,308

1,534

Search Year Contact Quantities

2012 49,672

2013 67,225

Increased Senior Search purchased names have brought significantly more applicationsSenior Search Applications by DateEntering Classes 2012-2013

2006 2007 2008 2009 2010 2011 2012 20130

100

200

300

400

500

600

700

800

459

525 509541

485517

410

710

Enrollment growth over same periodEnrollmentsEntering Classes 2006-2013

Entering Class 2006

Entering Class 2007

Entering Class 2008

Entering Class 2009

Entering Class 2010

Entering Class 2011

Entering Class 2012

Entering Class 2013

Entering Class 2014

Entering Class 2015

0

50,000

100,000

150,000

200,000

250,000

76,384

77,759 72,67553,693 86,935 74,720

80,90781,866

104,99964,490

24,240 44,83145,555

58,48855,461

49,67267,225

58,487 59,764 60,78242,071 48,555 34,486 41,884

67,64882,899

Sophomores Juniors Seniors

Direct marketing initiatives have helped to grow application opportunitySearch Volume by Grade LevelEntering Classes 2006-2015

Entering Class 2006

Entering Class 2007

Entering Class 2008

Entering Class 2009

Entering Class 2010

Entering Class 2011

Entering Class 2012

Entering Class 2013

Entering Class 2014

Entering Class 2015

0

5,000

10,000

15,000

20,000

25,000

30,000

4,777

8,964

8,617

4,615

7,3407,438

6,404 5,820

6,905

2,508

4,110

4,130

5,4966,129 5,070

4,258 5,680

6,731

11,507 10,693

5,686 6,8884,929 5,085

8,222 9,518

Sophomores Juniors Seniors

Direct marketing initiatives have helped to grow application opportunitySearch Inquiry VolumeEntering Classes 2006-2015

Enrollments by inquiry source

Enrollment Attributed – 2013

  SearchSenior Search

Big Red App

Web Application

Total Unduplicated Enrollments

Unduplicated enrollments from program 294 127 66 93 580

Estimated % that would have enrolled without program 50% 20% 50% 75% 47%

Estimated incremental effect of Royall & Company programs 147 102 33 23 305

ROI by inquiry source

ROI by NTR

ROI Description Base Revenues

$6 to $1 Freshman-year net tuition & fees vs. project costs $3,245,017

$9 to $1 Freshman-year net tuition & fees vs. program costs $3,399,412

Weighing different approaches to recruitment

All “searches” are not created equal

Typical student search•Once-a-year activity•Focused on one high school class•One list source•Paper mailing and some email•Features-oriented•Little benefit to student•Contacts only students•2% to 4% response rates

What works best•Multiple deployments year-round•Engages students when first available•Multi-year, multi-class, multi-list•Multi-channel contacts and responses•Benefits-focused•Action-oriented, value-laden offer•Engages students and parents•10% to 15% response rates

Response rate matters

National Averages for Private Institutions

Names searched 100,000

Response 6.5% 6,500

Apply rate 13% 845

Accept rate 71% 600

Yield 31% 186

Average net tuition $10,000 $1,860,000

National Leader Average Search Response Rate of 15%

Names searched 100,000

Response 15% 15,000

Apply rate 13% 1,950

Accept rate 71% 1,385

Yield 25% 346

Average net tuition $10,000 $3,460,000

First-Year Incremental Net Revenue $1,600,000

Four-Year Incremental Net Revenue ?

With 6.5%Response Rate With 15%

Response Rate

Company A counts email “openers” as search responders

7,849

63%

4,643

37%

6,154

61%

3,938

39%

Search RespondersSearch “Openers”

Inquiries from Company APrevious Entering Class

Inquiries from Company ACurrent Entering Class

“Openers” do not behave like inquiries andcan impact enrollment outcomes

Inquiries Applications0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

3,938236

6,154

662

Inquiries Applications0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

7,849329

4,643

565

4.2%

12.2%

Students identified as responders on their 1st source display higherapp rates

6.0%

10.8%

Application Conversion by AudiencePrevious Entering Class

Application Conversion by AudienceCurrent Entering Class

Search RespondersSearch “Openers”

Persistence is important

1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th 20%

30%

40%

50%

60%

70%

80%

90%

100%

48%

60%67%

72%76%

80%85%

88%91% 94% 97% 100%

20% of deposits were from students responding after they received their 5th marketing communication

<- 20% of all deposits ->

• A private university used a predictive model to “score” its list names for Search

• The model identified a group of students to exclude from further recruitment activity

• However, instead of excluding them, the college included the students in its recruitment program and then measured the number of those students who actually deposited

Does predictive modeling improve outcomes? – a case study

How well did it work?

3,211 1,64742.0% 69228,180152,325 42.0%11.3%18.5%

372 18048.3% 632,18113,361 35.0%17.0%16.3%

165,686

Selected by model to be included

Selected by model to be EXCLUDEDfrom Search (but contacted anyway)

Applications Admits DepositsInquiriesSearch Contacted

List Names Purchased

The group excluded by the predictive model generated 63 deposits

How well did it work?

3,211 1,64742.0% 69228,180152,325 42.0%11.3%18.5%

372 18048.3% 632,18113,361 35.0%17.0%16.3%

165,686

Selected by model to be included

Selected by model to be EXCLUDEDfrom Search (but contacted anyway)

Applications Admits DepositsInquiriesSearch Contacted

List Names Purchased

The group excluded by the predictive model generated 63 deposits

NOT contacting these students would have saved about $13,000

Estimated first-year net tuition revenue = $990,000

Application marketing

Application as marketing platform

• More than a data collection document• More than a form for reviewing candidates• Application can be a marketing platform• It can build interest• It can increase enrollment and revenue• Key: maintain an effective application marketing system for your

institution

1998 Paper Application 2012 Web Application

Our technological and competitive environments have changed

Today, the application must be something more than a data collection device

Our application is a marketing platform

DU application options

• Pioneer Application – institutionally branded application marketed to the inquiry pool

• Branded Web application – on DU’s website

• Common Application – marketed to the inquiry pool

• Common Application – first source applicants

Received Traditionally Marketing Received Pioneer Application Marketing0

500

1,000

1,500

2,000

2,500

905

2,124

Testing this approach proved its efficacy

ContactedSubmission Rate

14,428 6%

ContactedSubmission Rate

15,645 14%

+116%Performance

Submission Applications by Test Group

Received Traditionally Marketing Received Pioneer Application Marketing0

50

100

150

200

250

300

350

400

450

500

164

313

Custom Application Marketing increased deposits by 91%

+ 149 Deposits+ 91%

Incremental freshman-year net tuition and fee revenue = $3,125,000

Freshman-year ROI = $38 to $1

Incremental four-year net tuition and fee revenue = $11,791,300

Four-year ROI = $140 to $1

Deposits by Test Group

Traditional Application Pioneer Application0

20

40

60

80

100

120

140

160

180

200

46

130

Traditional Application Pioneer Application0

20

40

60

80

100

120

140

160

180

200

118

183

Deposits = 118 Deposits = 183Deposits = 46 Deposits = 130

In-StateOut-of-StateNormalized Deposit Ratio (Deposits/Contacted)Normalized Deposit Ratio (Deposits/Contacted)

The Custom Application Marketing was effective in increasing deposits from in-state and out-of-state students

+182%Performance

+55%Performance

Enrollment summary by application influence

0

5,000

10,000

15,000

20,000

3,568 3,101 1,471 182

5,591 5,084

3,934

553

1,112 822

446

118

4,868

2,707

1,879

353

15,139

11,714

7,730

1,206

3148 25731195 180

78527085

5773

683

1151

796

483

117

8138

3889

3071

416

20289

14343

10522

1396

Entering Classes 2012-2013

Web App Pioneer AppOther Marketed Common App

Accessed Submitted Submitted via Mobile

2011 1,120 235 ?

2012 1,922 341 84

2013 9,173 1,588 631

Mobile Application Activity

Denver mobile interaction summary

What about retention?

Search inquiries retain at higher rates than students from other sourcesRetention Rate by Source and Class

Freshman Sophomore Junior Senior70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

90.1%

85.0%85.0%86.3%

78.5%74.7%

Search Non-Search

Students contacted earlier have the highest retention rates of all populationsRetention Rate by Source and Class

Freshman Sophomore Junior Senior70%

75%

80%

85%

90%

95%

100%

91.1%

86.9%86.9%

89.0%

83.8%83.6%86.3%

78.5%74.7%

Search Sophomores Search Juniors Non-Search

Students contacted earlier have the highest retention rates of all populationsRetention Rate by Source and Class

Freshman to Sophomore Sophomore to Junior Junior to Senior70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

91.1%

86.9% 86.9%89.0%

83.8% 83.6%86.3%

78.5%

74.7%

Search Sophomores Search Juniors Non-Search

Lift in retention rate is seen across quality spectrumDenver’s Retention Rate by Source and Academic Quality Band

Bottom 25%

Middle 50%

Highest 25%

84.3%

85.9%

88.6%

87.0%

90.0%

91.3%

Search Non-Search

Sophomore Retention Rate

500+ Miles

101-500 Miles

0-100 Miles

87.3%

81.9%

84.4%

88.8%

91.1%

90.5%

Search Non-Search

Sophomore Retention Rate

Lift in retention rate is seen across distance bandsDenver’s Retention Rate by Source and Distance from Campus

Freshman Sophomore Junior Senior50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

110.0%

81.3%

73.6%

71.7%76.8%

66.7% 63.2%

Search Non-Search

Note: Sample set of nine institutions, public and private of various size

It’s not just at University of Denver – studyof nine colleges’ retention and SearchSearch inquiries consistently retain at higher levels

Freshman to Sophomore Sophomore to Junior Junior to Senior70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

84.8%

77.7% 77.2%

82.0%

73.9%

71.2%

Search Non-Search

Note: Sample set of nine institutions, public and private of various size

Search inquiries consistently retain at higher levels

It’s not just at University of Denver – studyof nine colleges’ retention and Search

  Search Senior SearchPioneer

ApplicationWeb

Application

Total Unduplicated Enrollments

Unduplicated enrollments from program 417 284 145 63 909

Estimated % that would have enrolledwithout program 50% 20% 50% 75% 44%

Estimated incremental effect ofRoyall & Company programs 209 227 73 16 525

Denver ROI

ROI Description Base Revenues

$8 to $1 Freshman-year net tuition & fees vs. project costs $13,508,266

$10 to $1 Freshman-year net tuition & fees vs. program costs $13,931,888

Denver ROI

Questions?