Measuring Return on Investment in International Student Recruitment

Measuring Return on Investment in International Student Recruitment
Cheryl Darrup-Boychuck, Measuring Return on Investment in International Student Recruitment Cheryl Darrup-Boychuck Owner and Chief International Education Officer USjournal.com, LLC Measuring ROI in International Recruitment | RAP Retreat, 23 April 2009

Brief History of International Student Recruitment
Cheryl Darrup-Boychuck, Brief History of International Student Recruitment Then: No need for metrics How can you possibly measure the value of international students on campus, with dollar signs? Now: Show me the numbers Deans of Admission have morphed into Vice Presidents of Enrollment Management Soon: More “stealth applicants” Increasingly, your first contact with a prospective student is their online application. I’ve been involved in int’l education for about 20 years, since my undergraduate days. From my perspective, here’s a brief history of what I’ve seen in international student recruitment. Back when I started, it was still considered heresy by many colleagues to even attempt to quantify, with dollar signs, the importance of international students on campus; you know, the post-WWII generation whole-heartedly believed that education across borders would go a long way in solving the world’s shortcomings. International students (many of whom were, and still are, the best and brightest in their fields) were a matter of pride and prestige. That philosophy has certainly evolved, in parallel with the corporatization of U.S. higher education. With that comes an increasing interest in trying to measure everything. But this is a complicated business. Even domestic admissions will admit their frustration with the trend toward applicants that just show up on their doorstep, and the impossibility of tracking EVERYthing. The only thing for certain is that measuring ROI in international student recruitment has never been, and probably never will be, a perfect science. Measuring ROI in International Recruitment | RAP Retreat, 23 April 2009

Cheryl Darrup-Boychuck, cheryl@USjournal.com
“Stealth” Applicants Students applying without prior contact Introduced into database as “applicant” Traditional enrollment funnel dissolving Accept lack of complete control of your institutional message One very interesting phenomenon in college admissions these days is the deterioration of the traditional enrollment funnel. The number of "stealth applicants" is increasing all the time, where the prospective students' first point of contact with the university is actually their online application. At Boston University, for example, the number of such applicants has risen 46 percent in the past four years. (Source: ) The true cost is greater than zero, but we can’t identify those costs accurately, because so much is going on OFF of our radar screens, for example on social networking sites. These “stealth applicants” introduce yet another quantifiably elusive factor in our quest to measure Return on Investment in international student recruitment. Measuring ROI in International Recruitment | RAP Retreat, 23 April 2009

“International Enrollment Management”
Cheryl Darrup-Boychuck, “International Enrollment Management” Nurture Connections with Domestic Admissions Particular Academic Departments Alumni and Development Office Current International Students Senior International Officers Identify Recruitment Strategy Target particular countries and language markets Incentives for countries not currently represented What about that “institutional message”? There’s no doubt that measuring ROI, from the perspective of global student mobility, is certainly gaining momentum. One of the hottest buzz-phrases on campuses these days is “International Enrollment Management,” or IEM. There was at least one session about it at the Annual AACRAO Conference last month in Chicago (that’s the American Assn of College Registrars and Admissions Officers), and NAFSA: The Assn of Int’l Educators is starting to dedicate some serious resources to International Enrollment Mgmt. In any event, IEM pulls together all complimentary components to ultimately determine how many students to enroll, what kinds of students to enroll, and how to optimize services to them throughout the process and beyond, up to and including alumni relations and development. During the process of creating a strategy for International Enrollment Management, individual campuses can clarify answers to questions like these: What can we learn from domestic admissions, to improve our efforts to measure Return on Investment in international student recruitment? How should we align our recruitment efforts with particular academic departments on campus? How should we work more closely with the alumni and development office to tap into former students now living overseas, for both recruitment initiatives and requests for scholarship donations? How should we engage current international students (and their parents) in our recruitment efforts? How should we engage campus senior international officers in our International Enrollment Management efforts? From which countries should we recruit? Should we bolster the number of students from countries currently represented on campus, or attempt to diversify our international student population? What native language markets should we target, given current resources to support them? If we choose to diversify, how should we effectively structure incentives (perhaps in the form of scholarships) to encourage more applications from the designated country? Measuring ROI in International Recruitment | RAP Retreat, 23 April 2009

“International Enrollment Management”
Cheryl Darrup-Boychuck, “International Enrollment Management” Resource Management Manage limited resources Define metrics and collect data Analyze the costs and benefits of specific initiatives Measure Return on Investment Deliberate and Intentional Approach Integrated effort to maximize impact ROI Metrics potentiate IEM Most colleagues would agree that “Resource Management” is key to enrollment management. In a world of limited resources, the question is usually not “Should we do something?” but rather, “Is this the most productive use of our resources?” Ultimately, this trend toward International Enrollment Management can be summed up by saying that colleagues are taking a much more deliberate and intentional approach to international student recruitment and all of its complimentary components, with the goal of creating an integrated effort to maximize institutional impact. On a side note, I’m kind of a WordSmith; I learned a new word last week, “potentiate” which is used primarily within the pharmaceutical community; its definition is “to increase the effect of a drug or toxin by giving another drug or toxin simultaneously.” I immediately thought of this webinar, and how studying ROI metrics potentiate really all the elements of International Enrollment Management. I love that word, POTENTIATE. Anyway… Measuring ROI in International Recruitment | RAP Retreat, 23 April 2009

Studying ROI: Corporate World vs Higher Education
Cheryl Darrup-Boychuck, Studying ROI: Corporate World vs Higher Education Initial Investment vs Subsequent Profits Recruiting Expenses vs Profits, where Profits = Tuition – Cost of Instruction + Expected Donations Flaw: Tuition < Cost of Instruction, so Profits are usually negative So, let’s begin with what we already know. Consider an economist’s perspective. Calculating the Return on Investment for a firm is fairly straightforward – one would compare the initial investment to subsequent profits produced by that investment to get an overall rate of return. If we were to do exactly the same for an educational institution, we'd have to 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: Tuition is often less than the cost of instruction at most U.S. universities, so the "profits" are usually negative, and it would be too difficult to estimate probable donations. Besides, we wouldn't want to take such a literal approach, as there are many non-monetary benefits derived from a diverse student body. So, we’re already getting a sense of “quantifiably elusive factors”. Measuring ROI in International Recruitment | RAP Retreat, 23 April 2009

Simple ROI Formula -- Cost of Recruitment + Tuition and Fees Generated Return on Investment Measuring ROI in International Recruitment | RAP Retreat, 23 April 2009

Marketing Cost per Student
Cheryl Darrup-Boychuck, Marketing Cost per Student MCPSi = Emt / St MCPSd = Emt / St Emt = Total marketing expense in time period “t” St = Total students enrolled in The relationship between domestic and international admissions on any given campus is not always harmonious. A few years ago, one of my colleagues from a small mid-western university got fed up with all the on-campus criticism he was receiving because of his overseas recruitment trips. He fought back by calculating the percentage of his time spent on student recruitment (which was just a small fraction of his job) and came up with a dollar figure for the year. By adding the costs of travel and publications, and dividing it by the number of international students enrolled, he came up with the approximate cost, per student, of maintaining a specific number of international students on campus. He then divided the campus’ total Office of Admissions budget (including salaries) by the number of domestic students enrolled to arrive at a cost per domestic student enrolled. He was not surprised to find that it was much cheaper to recruit an international student than it was to recruit a domestic student. This “informal formula” probably produced a pretty conservative estimate: 10%. Measuring ROI in International Recruitment | RAP Retreat, 23 April 2009

NACAC Admission Trends Survey
Cheryl Darrup-Boychuck, NACAC Admission Trends Survey Average cost per enrolled student, based on domestic recruitment (2008) $2,895 = Private institutions $2,366 = Overall average $1,002 = Public institutions So, there have been some attempts at measuring the cost to enroll a student, again, originating from the domestic side of admissions. These figures are from the National Assn of College Admissions Counselors, from their 2008 State of College Admission Report. The full report is at nacacnet.org. The data is useful in forming a basis for the conversation, but even NACAC admits that these figures are merely estimates. For example, some campuses included their staff salaries in their total expenses, while other campuses did not include their staff salaries. That’s a pretty significant variance. RAP Retreat, 23 April 2009

Domestic Admissions Yield
Cheryl Darrup-Boychuck, Domestic Admissions Yield Cost Applicant $ Admitted $ Enrolled $2,366. Some other interesting data from the 2008 NACAC Report has to do with the cost to secure prospective student names at various levels of the traditional enrollment funnel, where all initial inquiries go into the mouth of the funnel, at its widest point. We whittle those inquiries (or perhaps more accurately, the inquiries whittle themselves) down to applicants, then to admitted students, then to students who’ve actually enrolled. Again, keep in mind that these are DOMESTIC figures, on average. Measuring ROI in International Recruitment | RAP Retreat, 23 April 2009

Still, we try. While we can’t PRECISELY measure everything we’d like to, we can grasp some undeniable trends in the industry. Here’s an example (specifically related to INTERNATIONAL student recruitment) from my colleague Marty Bennett, who now works as the EducationUSA Marketing Coordinator with IIE (the Institute of International Education). These figures are from Marquette University in Wisconsin in 1993.There was a huge number of inquiries, 60,000, which resulted in 8,000 applicants, 5,000 admitted students, and 1,800 students who actually enrolled. That’s three percent of 60,000 original inquiries. Not surprisingly, only ten percent of inquiries originated from electronic sources, 16 years ago. Measuring ROI in International Recruitment | RAP Retreat, 23 April 2009

How times have changed. That funnel is actually morphing into more of a cylinder. These figures are also from Marty Bennett, but from a smaller institution, Ball State University in Indiana last year, in They only received 2,200 initial inquiries, but 77 percent of those (or 1,700) actually applied. Twenty percent of the initial inquiry pool (450 students) were admitted, and 250 students actually enrolled. That’s an eleven percent conversion, as opposed to the three percent conversion that we noted from the previous slide, based on data from 16 years ago. One of the reasons that the funnel is getting fatter is the increase in stealth applicants. The other thing is that a full 85% of initial inquiries originated from electronic sources. Measuring ROI in International Recruitment | RAP Retreat, 23 April 2009

Cost per Lead CPL = TAC / TLG CPL = Cost per Lead TAC = Total Advertising Cost TLG = Total Leads Generated So, here’s the matching equation that answers the question, How much am I spending to attract one prospect? That’s your cost per lead, or CPL. You take your Total Advertising Cost (TAC) and divide it by the Total number of Leads Generated. You can use various figures in the numerator, such as Total marketing budget, Total admission budget, or Total advertising budget. The purpose of this equation is to calculate for individual marketing initiatives where the first source of contact can be identified, such as college fairs, list purchases, or pay-per-click campaigns on major search engines. Once again, we see that it’s not a perfect science, as it’s getting increasingly difficult to identify that original source of contact. A few disclaimers: For our simple ROI formulas, you would not include any percentage of staff time involved in preparing the advertisement or following up with inquiries generated as a result of that effort. Simplicity is key in this approach. Only include costs directly related to that specific recruitment effort, in effect ignoring things like salaries and staff time. Do not include production costs of printed material or online resources or any other costs that would have been incurred anyway, whether you engaged in this promotional activity or not. Separating the costs allows for a more accurate analysis of Return on Investment (ROI) for each initiative. Measuring ROI in International Recruitment | RAP Retreat, 23 April 2009

Engaging Agents: Initial costs must be greater than zero
Cheryl Darrup-Boychuck, Engaging Agents: Initial costs must be greater than zero -- Cost of Developing a Relationship -- Commissions Paid + Student(s) Tuition + Student(s) Fees Return on Investment Skipping the relationship part may result in very negative consequences. Let’s move on to the next case study, this one involving commission-based educational agents who are based in countries like Japan, Korea, Taiwan, and Brazil to a certain extent. I know that engaging agents is an increasingly popular recruitment option, not least because it appears to generate the purest form of measuring Return on Investment. In most cases, you don’t actually pay the agent any commission until the student shows up on campus. That might be true, but skipping the “relationship” part of the equation may result in very negative consequences. We’ve all probably heard some horror stories about how agents who insist that the student pays THEM tuition, but the agent never passes along those funds to the university. There is a movement underway to address those ethical considerations; the organization that seems to be leading the way is the AIRC, the American International Recruitment Council. Measuring ROI in International Recruitment | RAP Retreat, 23 April 2009

Market Growth Gm = SI / SL Gm = % market Growth SI = Student increase this year SL = Student increase last year So, let’s see if we can identify other quantifiable data. Take Market Growth, for example. How fast or slow is the growth in a particular segment? Domestic admissions departments use IPEDS data to calculate for your institution’s competitive set. IPEDS is the Integrated Postsecondary Education Data System, run by the National Center for Education Statistics at the U.S. Dept of Education, That may be appropriate for some of us in international education, but what would be most helpful is analyzing the statistics from Open Doors or the Atlas of Global Student Mobility, both published by IIE (Institute of International Education). Calculate: Your institution vs. competition; by program; by type of student; by quality of student Measuring ROI in International Recruitment | RAP Retreat, 23 April 2009

Revenue Contribution Rmi = Ri / ΣRt Rmi = Revenue contribution for “i” Ri = Revenue from segment “i” ΣRt = Revenue from all segments Another equation that domestic admissions departments use widely is Revenue Contribution. What percentage of our revenue does this segment generate? Calculate by academic area, geography or other variable. This calculation, I think, is particularly helpful when you suspect that a certain segment of your international student population is a drain on your system, for one reason or another. I did a campus consultation last month, and there was concern about students from a particular African country. A faculty member had made arrangements for several students to enroll in their engineering program, with full funding from the home government. So, initially, it appeared to be a true revenue generator. However, it turns out that those students were woefully unprepared in the depth of their math skills to succeed academically in that environment. So those students really became a drain on the system, and prompted that particular university to develop policies where the admissions criteria was to be upheld, under any and all circumstances. Measuring ROI in International Recruitment | RAP Retreat, 23 April 2009

Multivariate Likelihood Function to Predict Customer Behavior
Cheryl Darrup-Boychuck, Multivariate Likelihood Function to Predict Customer Behavior What if we tried to build a model where colleagues can plug in their own data points? I think we’d arrive at something like this: A multi-variate likelihood function to predict prospective student behavior. Look, if a guy from Georgia Tech can accurately predict the Final Four teams and final winner in the NCAA Men’s Basketball Tournament consistently, then this stuff should be a piece of cake! Anyway, historically, we’ve gotten stuck when colleagues have tried to secure PURE DATA, which of course any real statistician would demand. We would need to survey the prospective students, to eliminate any bias of the recruiters, who may have a particular tendency to visit particular parts of the world on their little recruitment trips. Certainly, there are shortcomings of Linear Regression, but basically, the equation is designed to predict a dependent variable (likelihood of enrolling) based on several independent variables, such as the different types of recruitment. Measuring ROI in International Recruitment | RAP Retreat, 23 April 2009

Axis Graph – Identifying your SWEET SPOT RAP Retreat, 23 April 2009

Next Steps Collaborate with Domestic Admissions Define consistent parameters Recognize the complexity of international student recruitment, along with its quantifiably elusive factors Compare initial investment with revenue generated from that initiative MCPS = Emt / St CPL = TAC / TLG OK. So here’s your take-away. First off, work with your domestic admissions dept, who may already have established formulas. Figure out how their equations need to be tweaked for the complexity of international recruitment. Always work with the fundamental equation in mind, comparing initial investments with revenue from tuition and fees generated as a result of those initiatives. MCPS = Marketing Cost per Student, where Emt = Total marketing expense in time period “t” divided by St or Total students enrolled in time period “t”. CPL or Cost per Lead = TAC or Total Advertising Cost divided by TLG = Total Leads Generated for any given campaign. On a side note, I used to work with a gentleman who wore those thick, Coke-bottle-bottomed, dark-rimmed glasses who just loved figuring out patterns and trends, and formulating equations to try to predict what would happen next. Whenever he would meet someone new, and they’d ask what he did for a living, he’d say “I work with models.” In most cases, their minds conjured up images of the bikini-clad-type models; eventually he set them straight, and confess he worked with mathematical models. Measuring ROI in International Recruitment | RAP Retreat, 23 April 2009

Better ROI Metrics Decide which metrics are appropriate, and include specific parameters for each Establish long-term policies for tracking and reporting Always be prepared to present your data, but insist on annual meetings with those who hold the purse strings The bottom line: Report on marketing ROI honestly and frequently. It’s not a perfect science, but it’s absolutely critical to establish some baseline criteria to measure success. It’s amazing what will flow from this kind of data. For example, campuses use it to determine that magical price point for the scholarship amount, say for example, for a student from a country currently not represented on campus. Boosting diversity may very well lead to a higher placement in increasingly popular global institutional ranking schemes. A $2,000 scholarship, for example, will probably not sway the prospective student’s decision. $5,000 may not. $15,000 in scholarship funds may very well do the trick. But what if that price point was only $10,000? Very interesting exercises, especially when considering policies that may impact hundreds of prospective students and millions of institutional dollars. Measuring ROI in International Recruitment | RAP Retreat, 23 April 2009 20

Measuring Return on Investment in International Student Recruitment
Cheryl Darrup-Boychuck, Measuring Return on Investment in International Student Recruitment Cheryl Darrup-Boychuck Owner and Chief International Education Officer USjournal.com, LLC Measuring ROI in International Recruitment | RAP Retreat, 23 April 2009

Measuring Return on Investment in International Student Recruitment

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