The importance of value
It is clear that colleges, and the faculty and staff who inhabit them, define value. It is up to them to make decisions about what they hold important. Now, however, the marketplace wants a voice.
While you may define value, the marketplace—students, donors, and others—affirm value by the actions they take, and don’t take. If they attend and donate, your value, or value proposition, is important to them. If it isn’t, then they don’t.
It is not realistic to expect everyone to value what you value. However, it is essential that enough people do. In particular, enough people who can write the checks you need to meet your financial obligations.
From a recruiting perspective, the fastest way to determine whether your value proposition has traction in the marketplace is to look at your discount rate. At one level, a high discount rate means prospective students, especially students with the means, do not value your value proposition.
However, even students with lesser means think about value propositions. When your value proposition is high, these students of lesser means will be more inclined to borrow money because he or she has confidence that the investment they are making in an education at your institution will pay off in heightened job or graduate school prospects. In other words, they are confident that they can pay off the loan.
When a student of means, or not of means, expects institutional aid they are saying, at one level, “Why should I spend my money to attend?” This is perhaps the clearest signal that your value proposition is uncertain.
Determining your value proposition
Fortunately, it is relatively easy to determine a valued value proposition. All you need to do is ask students using choice-based modeling. This kind of modeling allows you to determine with certainty:
- The institutional attributes of most value to students (these are the things students and families will pay more for and form the basis of your value proposition)
- How your value proposition compares to that of your competitors
- The point of compelling differentiation
Interestingly, these analyses also allow you to identify two other mile markers:
- The price point which will generate the most revenue
- The price point which will enroll the most students
The best part of this research is the precision and confidence it offers as you make decisions about which value proposition you should project. This level of certainty around your value proposition offers you a significant strategic advantage and allows you to plan with confidence.
The same methodology can be used to ask donors about their support for a capital campaign.