With tuition costs continuing to rise, both cumulative and individual student loan debt becoming unsupportable, and an employment landscape that is rapidly evolving in challenging ways, it is no wonder that colleges and universities are being asked to demonstrate their tangible value. Students and other stakeholders want to know in concrete terms what the value is of the education that’s being offered—what they will receive in exchange for their time, money, and effort.
Often, these demands are couched in terms related to employment data, potential earning power, and other financial returns. Such expectations mean that it is imperative that institutions of higher education are able to make a convincing case for a significant return on investment (ROI) to their many stakeholders, regardless of whether this ROI provides a comprehensive perspective of value. But how is ROI defined and by whom? Moreover, what contextual factors influence these measurements? Solving these issues is a significant challenge because a single metric, or even a small group of metrics, can never provide a complete view of what’s going on.
In any marketing situation, ROI—and the subsequent value that has been defined—must be contextualized. A single metric can have a different meaning for or impact and influence on different audiences in various situations. A challenge for colleges and universities in defining ROI is that there are many different audiences and stakeholders to which these metrics must be directed. It is not simply the traditional undergraduate student and his or her parents, but also non-traditional students, graduate students, alumni, industry partners, federal governments, state funding agencies and legislatures (among others) who demand to know the value of a particular institution and why that institution should be supported with time, money, loyalty and other means.
Additionally, the definition, prioritization, or interpretation of an institution’s value is often influenced by environmental and contingent factors, such as the motivations that drive people, an individual’s background and history, and whether value is comprised of primarily tangible or intangible matters, or some combination of both. For example, some students are solely concerned about future employment and earnings, while others might place a higher importance on the social experience of a college education. Regardless of which measure of ROI is promoted, with both of these types of students the applicability of that measure for each individual will vary. A data point that provides a generalization and that generalization’s resonance can be impacted by a variety of external factors, such as the degree program in which the student enrolled, the student’s own efforts in both his or her academic performance and the search for employment, and the ability of the student to maximize the opportunities presented. With multiple and possibly competing audience expectations, how can an institution determine which message will resonate with which audience and which to prioritize in order to differentiate their institution in a very crowded marketplace.
While certain segments of your audience may be satisfied with one or two metrics that translate the cost of tuition into employment data, other segments will likely demand a richer, more nuanced representation of ROI. If we attempt to generalize a definition of value across too many different audiences or create marketing messages that are intended to resonate with all audiences at the same time, what we risk is a bland, uninspired message that struggles to resonate with anyone. It’s important to keep in mind that in some respects, ROI’s are generalizations—numeric snapshots that attempt to quantify the value of an experience; however, the individual stakeholder’s experience is much more like a case study—filled with unexpected and unanticipated outcomes, deep but not wide, unique. For some, more information is required to determine whether the investment made in the institution resulted in something of value. Therefore, ROI and other metrics or indications of promised value need to make sense for your institution, its mission and values, your audiences, and their goals and objectives. Naturally, this makes articulating value much more complex.
Using some of the tools already in our marketing toolbox can help institutions determine how best to manage these competing demands and definitions of value. We start where we always start: by obtaining a thorough understanding of the situation, our audiences, their expectations, and the context surrounding them. Although more time-consuming, it is often more effective to segment the marketplace based on audience. Once segmented, we must ask and obtain information to determine how each audience defines value, what the tangible and intangible things are that contribute to that value, how needs and wants are prioritized, what factors influence definitions of value, and what are the short- and long-term expectations.
This segmentation and analysis should provide better information related to how these various audiences define value in relation to their time or money spent. The effort provides rich, qualitative information as a means to inform the selection and presentation of quantitative data, thus balancing the more generalizable metric with detailed “stories” that can help to personalize those metrics. Numbers and price-value comparisons only paint part of the picture, and for some institutions and individuals these types of stories are insufficient to the point of being detrimental. Focusing solely on numeric measurements of return can contribute to the creation of a transactional view of education, in which education is metaphorically perceived as a business. This may be appropriate in some situations, but may also prove problematic in other instances where the outcome, experience, or received value is not well represented with a single metric or in business terms. Our definitions of return on investment should also consider experiential and social outcomes, which, though less tangible, are equally important to defining value. Offering a rich framework that supports numerical ROI and deepens the impression made may be the ultimate way for institutions of higher education to articulate their value to their many audiences and differentiate themselves among their competitors.
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