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 critical factor in today’s higher education landscape is the continued decline in student enrollment across Title IV institutions in the United States. According to recent data from the National Student Clearinghouse Research Center, postsecondary enrollment has been steadily decreasing, with undergraduate enrollment falling by nearly 8% between 2019 and 2022. This trend reflects a shrinking pool of traditional college-aged students, a rise in alternative education pathways, and shifting societal attitudes toward the value of a degree.
Higher education institutions are now competing not only with other universities and colleges (including for-profit and non-degree granting programs) but also with various career, social, and online education options, such as bootcamps, certifications, and skill-based training platforms like Coursera and LinkedIn Learning.
This competition extends beyond just recruiting new students. Alumni and donor engagement are increasingly critical for sustaining revenue. Institutions that fail to excel in student recruitment, alumni engagement, and fundraising risk flatlining or declining revenue streams. This, in turn, forces reductions in operational and capital expenditures, creating a feedback loop of restricted budgets and limited resources for future growth and engagement.
To counteract these challenges, innovative leaders in higher education are taking cues from the private sector. Businesses, particularly in competitive industries, are focusing on customer-centric approaches to foster loyalty and growth. They are investing in high-impact customer service strategies to create differentiated experiences that not only retain existing customers but also attract new ones.
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 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”. I particularly like Forbes contributor, John Hall, 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 and tracks the student’s outcomes. 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.
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 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.
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 and 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 discuss various approaches that can make a difference.