What are the Pros and Cons of Viewing Students, Alumni or Donors as Customers?
The topic of whether universities and colleges should view their students, alumni and donors (Constituents) like customers is a debate that has been taking place for many years. Recently, TSI has noticed this debate is occurring with increasing frequency, especially in light of our recent Customer Experience training. Now more than ever seems to be the right time to continue the discussion of how to best utilize customer service/experience philosophies when working with Higher Education constituents.
The Challenge of looking at Higher Education Constituents as Customers
Historically, many leaders in Higher Education abhor the thought of students as customers for many valid reasons. Anecdotally, I have found that the perception of Higher Education towards the concept of a customer is that customers are a number; customers are people that must be solicited or won over, and you need to sell to customers. Additionally, some feel that the merit of education should be separated from a financial transaction usually associated with being a customer.
In treating your constituents like customers, Higher Education institutions may feel pressure to lower their standards and values. While some of this vitriol may be warranted, Higher Education institutions should not dismiss important Customer Experience concepts since these can improve the service to their constituents.
The growing need for Customer Service in Higher Education
A key factor for this discussion is that since 2010, student enrollment in all Title IV institutions has been declining nationally. Since the fall semester of 2010 to the fall of 2014, Title IV institutions in the United States have lost 928,000 students, a 4.3% decline. (U.S. Department of Education, National Center for Education Statistics) This means that the available population is either shrinking, or potential students are choosing not to go to traditional colleges and universities. Thus, most Higher Education institutions are required to compete between other Higher Education Institutions (including For Profit, as well as non-degree granting institutions), but also between other social and career avenues and interests.
Keep in mind this fight for attention does not only apply to gaining current students, but to donor and alumni engagement as well. If Higher Education Institutions do not become better than their peers for student recruitment, alumni engagement and donor/alumni fundraising, revenue will remain level, or possibly start to decline. With a decline in revenue, the Institution may also need to reduce operational and capital expenses. This results in the institution applying less and less resources to engaging the institution’s future students, alumni and donor bases. Overall, this slippery slope will result in increasingly restrictive budgets, paired with an increased focus on being efficient with resource expenses.
To battle the many competing interests for potential students and alumni/donor engagement, some progressive Higher Education leaders are looking to private businesses that have been doing similar activities successfully for a long time. Businesses are currently going through their own period of discovery and change. They are looking more and more closely at their customers and trying to provide high impact customer service. Their aim is to achieve a differentiating experience, which drives loyalty and repeat business. This mindset is where Business can help define and provide inputs into the discussion of customer service in Higher Education.
So why should students/alumni/donors be viewed any differently than a business would view its customers?
Starting with the similarities:
1. Both are consumers – Students and customers are consumers of the product that is produced by the associated institution. For example, a student, when not in class, is consuming goods and services. Regardless of how the institution wants to classify these individuals, they define themselves as consumers since they pay, what they feel is a very high amount of money, in exchange for a service. As a result, they have high expectations for this service.
Think about how vocal students are when their Wi-Fi is slow; the course registration process has errors and/or takes too long; or the food in the Café does not meet their standards. Each of these seemingly small occurrences can influence how the student will share their experiences with their friends or peers, especially via social media, which enables other potential students to form their opinions as to whether they want to attend that institution.
A great example of Higher Education institutions appealing to their constituents that closely aligns with Customer Experience principles is through their athletics programs. There is no denying that in many major Universities in the United States, their football programs have become very proficient in marketing themselves to gain the best recruits, develop a rabid fan base, and ultimately profit from this fan base. Universities do not need to go all the way to this extreme; Higher Education administrators can still learn valuable lessons looking at how Athletic programs are appealing to their constituents.
2. Variety of appeals – People are constantly bombarded via radio, social media, television, movies, newspapers, magazines and other channels to donate to this organization, or be a customer of that organization. This makes it very difficult for a single organization to “Cut through the noise”. Forbes contributor John Hall wrote about this specifically for attracting investors. However, Hall has many parallels in his article to what Universities should be doing to attract both potential students as well as donors (Hall, 2016). I particularly like his advice to “Invest in your company leaders’ brands”. Specifically, the leaders who had “invested time and resources in building their brands were attracting more attention from investors and even other participants.” Replace investors with students or donors, and this statement is fit for Higher Education. Of course, the question is how to build your brand. That is another topic for a different day.
Now, the key differences between Higher Education Constituents and customers:
1. Regulatory implications – Higher Education institutions that offer Title IV funding for their students, are subject to rigorous federal and state regulations and policies that determine how the university interacts with the student, as well as tracks the outcomes for the student. In addition, FERPA regulations strictly define how institutions are to maintain and protect student information. The closest parallel to this is in Healthcare, which is going through a similar debate with the Patient vs. Customer paradigm. [1]
2. Student / Donor Lifecycle – Students have a unique lifecycle within Higher Education. At a high level, the lifecycle of a Customer involves attraction to the product, successfully completing the transaction, and maintaining a relationship to generate future transactions. The student lifecycle, at the same high level, has a few more steps in the process:
- Becomes attracted to a particular college or university;
- Applies to the university;
- Is accepted by the university;
- Completes required degree coursework, and ultimately;
- Graduates from the university with their desired degree.
This process differs from the Donor lifecycle, which only begins when the Student lifecycle ends. The need for Higher Education to do more and more advancement work (fundraising) has required Schools to be cultivating relationships long past graduation, to aid in the fundraising needed to fill growing state funding gaps. In short, the student/alumni lifecycle is more complex, and needs to be treated as such.
The Donor lifecycle can be equally as complex. Appeals for donations to a University can not only span years, but also can span generations. This requires extensive planning, communication and patience on the side of a university that often most businesses are not willing to invest. The Chronical of Higher Education had a recent article listing the largest private gifts to Higher Education institutions. I would be willing to bet a sizable sum that the vast majority of these gifts were not solicited then given within a weeks’ time. Let us know of recent examples you have had with large gifts and the time it took to generate those gifts.
[1] For more, start with this excellent article from the Harvard Business Review. https://hbr.org/2012/01/the-trouble-with-treating-pati
So, what is the answer?
The answer to whether Higher Education institutions should view their Students, Alumni or Donors as Customers when discussing Customer Service in Higher Education is yes… and no.
Valuable lessons can be learned from the customer experiences of private businesses. Colleges and Universities do not need to feel like they are compromising their mission or selling their soul by considering the “personas” of their constituent base and defining differentiating experiences and processes that personify the “brand” of the institution. The key however, is to really know your constituents including each of their objectives and the “moments that matter” to them.
When looking at how to improve Student enrollment, drive Alumni engagement and Donor interest, understanding how to serve them in a way that will lead to a truly differentiated experience is where to spend time and resources. However, if Higher Education institutions try to blindly apply all concepts from private businesses’ customer service practices, without understanding how your constituents are different, they will create problems with their students, alumni and donors. I would be incorrect if I said that these concepts are new to Higher Education, and are not being practiced at all today.
What can you do for TSI, and vice versa?
It’s simple – help us help you. We at TSI always like to hear new and innovative ways that institutions are applying Customer Experience concepts to their customer service in Higher Education. Please let us know:
- What did you think of this summary? And;
- What is your greatest challenge or achievement in providing a differentiated service to your constituents?
If you are interested in learning how your institution can apply Customer Experience concepts to student recruitment, donor engagement and your advancement activities, contact us to go through our Customer Experience workshop.
Works Cited
Hall, J. (2016, May 15). Forbes.com. Retrieved from Cut Through The Noise: How To Differentiate Yourself To Attract Investments: https://www.forbes.com/sites/johnhall/2016/05/15/cut-through-the-noise-how-to- differentiate-yourself-to-attract-investments/
U.S. Department of Education, National Center for Education Statistics. (n.d.). Total fall enrollment in all postsecondary institutions participating in Title IV programs and annual percentage change in
enrollment, by degree-granting status and control of institution: 1995 through 2014. Retrieved from National Center for Education Statistics:
https://nces.ed.gov/programs/digest/d15/tables/dt15_303.20.asp?current=yes