Colleges must address declining enrollment by improving lead quality, optimizing yield, and innovating with differentiated, sustainable programs.
Higher education has faced declining undergraduate enrollment since 2010 - experiencing a 15% decrease in total undergraduate enrollment at postsecondary institutions. Additionally, declining birth rates, evolving student demographics, and growing skepticism about the value of college degrees has resulted in fewer students enrolling in higher education. We’ve seen the impact to institutions already - with total postsecondary IV institutions decreasing from 4,599 in 2010 to 3,931 in 2020.
The demand-side shock of decreasing enrollments will continue to collide with a relatively fixed supply of programs. The result? A shift in the economics of enrollment that will require institutions to rethink what growth looks like.
From an economic perspective, the relationship between supply and demand is clear: when supply remains constant and demand decreases, competition intensifies. Prices tend to drop to attract customers - average institutional tuition discount rates have increased from 39.8% in 2013 to 50.9% in 2022 - but many institutions lack the budgetary flexibility to lower tuition without jeopardizing their financial viability.
At the same time, lead generation becomes more expensive. If institutions are competing for the same shrinking pool of prospective students, the cost of acquiring each lead rises as institutions are forced to outbid one another.
This new reality necessitates a shift in strategy. The next decade will be less about chasing lead volume and more about maximizing the quality and yield of every student touchpoint.
We believe there are three key strategies to drive growth - some which leverage Motimatic, others that we’ve seen work generally in higher education.
The days of focusing solely on lead volume and cost-per-lead (CPL) are over. Institutions need to shift their focus to more meaningful metrics like cost per started application or cost per submitted application. Having managed somewhere between $500m-$750m in higher ed ad spend over my career, I’ve seen a sharp difference in performance for institutions focused on mid to down funnel metrics vs. ones solely focused on driving lead volume. Your lead mix should be different with this shift - less focused on paid social (Meta in particular) with more of a focus on paid search. If you work with an education ad agency, push the envelope - work to automate data sharing back to the ad platforms, and ensure you’re optimizing to mid/down funnel events.
A word of caution - registration/enrollment is likely too slow and too small of a data point to optimize marketing to. It’s a great KPI to set for the team, but your operations will need to focus on faster, more voluminous data points.
Separately, to remain competitive, colleges must rethink their marketing playbook. Once you have the fundamentals in place, incorporating innovative channels like connected TV (MNTN is easy to use), LinkedIn conversation ads, and direct mail (Poplar is a great starting point) can help reach prospective students where they are.
Southern New Hampshire University (SNHU) offers a prime example: their bold, multi-channel approach has turned them into an online education juggernaut. Their success highlights the importance of not only increasing visibility but also differentiating your institution’s brand in a crowded market.
With increased lead gen competition, improving lead-to-enroll yield is critical. Efforts should extend beyond lead gen to include lead to enroll, retention, stop-out recovery, and alumni pathways. This is where platforms like Motimatic shine. By using data-driven strategies to engage students, institutions can dramatically improve yield metrics.
For example, a recent A/B test with a top 300 university showed a 160% increase in lead-to-enroll rates and a 350% increase in submitted applications when leveraging the Motimatic platform. We were able to drive increased enrollment at a 5X ROI. Most lead gen funnels in higher ed operate paid marketing at a 1-3x ROI - this is a clear example of how focusing on mid-funnel is a more financially viable strategy than adding additional funding to the top of the funnel. In this instance, the math is simple: $1 spent on Motimatic returned $5, outperforming additional ad spend. Motimatic is a better investment than spending more on lead generation.
Similarly, Texas A&M University–San Antonio (TAMUSA) achieved over 501 re-enrollments using Motimatic to target stop-out students at a 15x ROI. These successes demonstrate that focusing on quality over quantity not only improves immediate enrollment but also has downstream benefits for retention and revenue.
Post lead improvements to your funnel are the best financial investment you can make.
As the student pool contracts, institutions will be tempted to launch new programs like online master’s degrees, alternative credentials, or boot camps. These are worthwhile pursuits, but they must be balanced with efforts to strengthen the institution’s core offerings. We wanted to provide two examples of differentiation that add value to the ethos of the institutions:
As you consider alternative offerings, spend the time focusing on differentiation - launching a generic degree or alt cred pathway is increasingly challenging - if you go this route, ensure your financial model is bullet proof. Otherwise, zig where others zag.
The enrollment cliff isn’t just a challenge; it’s an opportunity to reset and refocus on what makes you great. By improving lead quality, optimizing yield, and fostering meaningful innovation, colleges and universities can drive towards a healthier institution. Platforms like Motimatic are poised to play a pivotal role in helping institutions navigate this new era. As demand decreases, the name of the game is efficiency and quality - not just chasing more leads.
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