The Student as Customer

Are students customers? That’s a question certain to start an argument in any faculty lounge. Regardless of the answer, the fact is that students — especially nontraditional students — see themselves as customers.
Studies that look at what students want from a higher education provider find that students have high expectations for the service they receive — be­fore, during and after enrollment.

Already savvy shoppers, today’s nontraditional students have the same service expectations when selecting a higher education institution as they do when making any other major purchase. But as institutions try to do more to meet these expectations, they require more staff. As a result, administrative staff productivity — defined as the number of staff per student — has declined between 23 and 53 percent in the last two decades.

Yet as student expectations are rising, colleges and universities are looking to trim budgets and increase efficiency. Public universities have recently experienced severe budgeting problems, with American Recovery and Reinvestment Act funds drying up in 2012. Private universities also have difficulties as their expenditures have increased more rapidly than their revenues.

In light of all this, some might ask why it matters what students want, considering that for a long time students came to the institution and did as they were told.

But today, there are thousands of institutions for students to choose from, including options online, abroad or even for free. There are so many institutions, programs and courses that if students feel their needs and wants are not met, they will simply take their enrollment elsewhere.

An Eye to Efficiency

To get an edge over the competition, colleges and universities must find a way to efficiently meet student demands. The difficulty is that today’s student body is far from homogeneous and trying to find one thing that will please everyone is nearly impossible, especially when it comes to non-traditional students.

The answer to this riddle is surprising simple. You need to get to know your students (and prospective students) and communicate with them as individuals.

What does this entail?
  • Keep track of whom you are serving. By keeping complete customer profiles with accurate data, institutions stand to increase revenue by 66 percent.
  • Speak directly to the student. A highly targeted email drives 18 times more revenue than a widely sent email blast.
  • Answer their questions. 27 percent of inquiries made to institutions never receive a response. 
  • Take customer relationship management seriously. By doing so, institutions stand to decrease cost of sales by 35 percent while also increasing customer satisfaction by 20 percent. 

Retaining Students, Retaining the Customer

Colleges and universities have been hesitant to call their students customers and have held out on implementing customer-centric business practices. There was a time when this made a lot of sense. With only one or two local institutions, prospective students were left with little choice as to where to attend. And with most students attending one institution for two or four years prior to moving on, the school had a captive audience. As a result, basic business rules (for example, how a mere 10-percent increase in customer retention can double revenue) could safely be ignored, since most students wouldn’t come back after graduation anyway. But education today has become a lifelong pursuit, and students are coming back to school time and time again to update skills and to learn new processes, technologies and ideas.

Colleges and universities are seeing a shift in demographics. Only 16 percent of students can be considered traditional, living on campus and going to school full time. The American Council on Education (ACE) estimates there are as many as 80 million people between the ages of 25 and 64 with no post-secondary credentials. Currently there are nine million adult students enrolled in accredited post-secondary institutions in the U.S. As enrollments for traditional-aged students decline, nontraditional markets become even more important for the 6,900 accredited post-secondary institutions across the country. Ensuring colleges and universities are communicating with non-traditional students on their terms requires different practices and procedures.

For the first time, higher education institutions have the opportunity to retain the customer for a lifetime and to build real brand loyalty as an education provider, not just nostalgia as an alma mater.

Call it customer service, or call it something else. Either way, colleges and universities — the market leaders, at least — are starting to adopt it. Institutions that understand their students and provide them with rapid and personalized service stand to increase enrollments, improve retention and reimagine market potential.

Shaul Kuper is president and CEO of Destiny Solutions, a company that provides business software solutions for non-traditional divisions of leading higher education institutions, including Penn State World Campus, Stanford Center for Professional Development and eCornell.