IIE Networker - Spring 2008 - (Page 24)

Feature Measuring Return on Investment in International Student Recruitment By Cheryl Darrup-Boychuck How can you possibly measure the Return on Investment in a field where results are so intangible? Very carefully. The first question of any statistician who examines this issue is: Where’s the data? The fact is, researchers have produced woefully little data within this admittedly narrow field of study. And for good reason: It ain’t easy. Promoting global student mobility isn’t exactly a twodimensional concept, so linear equations wouldn’t even begin to tell the story. The numbers of potential variables seem limited only by the imagination. Still, analysts in service-oriented industries outside of international education have struggled with developing ROI metrics for years. It makes sense, then, to borrow from Economics 101 to lay the foundation: To calculate Return on Investment for a firm, one would compare the initial investment to subsequent profits produced by the investment. To apply that concept to an educational institution, compare recruiting expenses (the initial investment) to the profits (tuition minus cost of instruction) plus expected future donations after graduation. Sounds simple enough, but there are a few inherent flaws to this literal approach: Tuition is often less than the cost of instruction at most U.S. campuses, so the “profits” are negative. It would also be extremely difficult to estimate donations after graduation. One possible improvement to that inadequate model is to estimate admissions yield from recruiting in different regions, where yield equals the number of newly-enrolled students per dollar of recruitment expenses. Corporate analysts use a similar equation for figuring “customer acquisition costs.” For example, the U.S. cell phone service industry spent between $300 and $400 to acquire a customer in 2005. The average acquisition cost for U.S. mortgage companies is about $800 per customer. Theoretically, investors tend to pay higher customer acquisition costs for “luxury items” (like U.S. higher education) which typically coincide with wider profit margins. Cost-to-Recruit The National Association for College Admission Counseling (NACAC) provides some perspective via its annual Admission Trends Survey, even though it is largely based on recruiting domestically. Data from NACAC’s 2006 survey, which is published in the 2007 State of College Admission Report, shows a mean cost-torecruit of $2,350 per enrolled (domestic) student. But there are substantial differences depending on the type of institution. The mean cost per enrolled student at public institutions is $1,083, while private institutions report a figure of $2,802. Institutions with enrollments of more than 10,000 students report a mean cost per enrolled student of $658, while institutions with fewer than 3,000 students report a figure of $2,862. (These figures reflect responses that included all expense categories in the total admission budget.) So, how can domestic admissions figures shed light on Return on Investment on the international side? Direct comparative analyses (on individual campuses) may very well show the efficiency of international student recruitment strategies when compared to domestic admissions’ budgets and number of students enrolled – especially given the fact that actual “recruitment” has traditionally been just a small percentage of the international staff’s overall job responsibilities. The other critical element in such a comparison involves financial aid offered to domestic students; most discounts are not available to international students. Specific considerations – and variations – percolate in any substantive discussion about developing a Return on Investment equation for international student recruitment. One consistent element, however, is that the traditional admissions funnel with a wide mouth is morphing into more of a cylindrical shape, which reflects a much more targeted approach, closely tied to the quality of leads entered at the top. The funnel for U.S. higher education used to imply that colleagues fed as many inquiries into the mouth as possible and calculated that a certain (relatively low) percentage of pro-

Table of Contents for the Digital Edition of IIE Networker - Spring 2008

IIE Networker - Spring 2008
Contents
Message from Allan E. Goodman
Up Front: The International Education Diary
Best Practices in International Education: 2008 Andrew Heiskell Awards
IIENetworker University Presidents Interview Series A Conversation with President M. W. Scogggins, Colorado School of Mines
Measuring Return on Investment in International Student Recruitment
Making Partnerships Work
Campus View
Agents
Latin America
Translation
International Students
The Browser: Index of Advertisers

IIE Networker - Spring 2008

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