I am a board member of Masterstudies.com (prior description here) a startup company that offers a recruitment service for universities, primarily those offering master programs in business or related fields. The company now has a number of universities and business schools signed up, and we have begun to learn something about the market that we (or, at least, I) did not know before, even though I have worked for a large, private business school for many years.
The thing is, it seems (many) business schools do not practice what they preach – i.e., many of them fail to apply some rather basic strategies, sales practices and web practices. Here are a few observations I have made so far:
1. Business schools say they differentiate, but they don’t
The classic. Porteresque view of competitive strategy says that there are only three generic strategies you can apply: Cost leadership, differentiation (i.e., being unique in some way), or segmentation (i.e., addressing specific sub-markets based on attributes of the customer). The latter, of course, is merely a more granular and partially combined version of the two first ones. Even though business schools should know competitive strategy well (it is, after all, one of their most important subjects), most of them do not pursue any one of these strategies. Or, rather, they say that they pursue a differentiation strategy but don’t. In that sense, they are neither strategic nor different.
The test for whether you have a strategy that truly is strategic is that you have chosen not to do something that you could have done. The test for whether you are differentiated is whether you can take away the school name (and things the school cannot change easily, such as nationality and location) from its description and then see whether you can determine which school it is based on its marketing material.
The reason I say this is that I have played around with the course and school descriptions found in our database, and been struck by how similar they look. Do the test yourself – go into the Masterstudies database, look up a few schools, and ask yourself: Which student segments are this school deliberately not trying to get – and what part of its offering is sufficiently different that you can see to what extent they are doing this in practice or just in Powerpoint.
Most of them are looking for the future leaders who see the challenges of globalization, new technology and a constantly changing marketplace as opportunity to employ innovative strategies to build flexible learning companies that create value for their customers, shareholders and employees while displaying a sense of diversity and social responsibility. Hmmmm…. I wonder how large that segment really is – and to what extent the school really can serve this mythological student once he or she shows up?
The net result, of course, is a power law distribution of interest, with about 10 schools, the Harvards and Stanfords and MITs and Kelloggs of the world, getting all the attention; a near-first tier that is deadly afraid of doing something that the best schools do not, lest they be criticized for it; and a medium body and eventually long tail of schools that really do some differentiation but dare not talk about what it really consists of – for instance, explicitly targeting those who did not make it into the first tier schools but still are good students.
2. Business schools talk about market analysis, but many don’t do it well, or at all
Recruiting a student of sufficient quality and interest is a complicated process: You have to create enough awareness so you get enough applications so you can send out enough qualified to get enough accepts. To do this, you have to track
a) the number of leads (expressions of interests) you get
b) how many who actually send in an application (conversion rate)
c) how many of these are qualified and will get an offer (acceptance rate)
d) how many who accept the offer when they get it (yield)
My thoughts were that every Dean of Admission in the world eagerly tracked these numbers (they are, after all, also pretty good for measuring the level of effort of the sales team) but no, there are some indications that a number of schools, in fact, do not even know them. Depending on where in the distribution of schools you are, you ought to track different numbers: If you are top-ten, you track yield rate; if you are new, you track earlier in the process. (Incidentally, what Masterstudies offer is a filtered version of the first one, where schools can set up criteria for what kind of leads they want, thereby filtering out the clearly unqualified and enable some geographical or gender balancing – the difference between carpet-bombing and surgical strikes, as it were).
These numbers are not hard to get, but fewer schools than I thought actively manage them. (Not that I have formal statistics or would share them if I had them.).
Schools differ widely in their attitude to prospective students as well. We tested the response rate of schools and found that it varied widely – some schools did not respond at all, whereas some schools were on the phone with our prospective students in less than 30 minutes. That makes a difference as to whether the students will send in an application or not. (And no, there was no quality difference between these schools in terms of rankings and so on – we could not detect any pattern at all.)
3. Business schools know little about why they don’t get the students they want
There is a classical study by Abraham Wald of the location of bullet holes in bomb planes to find out where to add armor. Wald looked at where the airplanes were shot up and then concluded (not in the referenced paper, though) that more armor should be in the places with no bullet holes. The reason was simple enough: The planes that returned were the survivors, with bullet holes in places that could take the damage.
I wonder if not some of the same bias comes through with business schools. I wonder how many of them systematically interview or otherwise try to elicit responses from those students that did not chose their offering – at any point in the process. There are some schools that are clever – for instance, one school makes sure that the lack of a GMAT is not a hindrance to start studying if your grades and other academic performance indicators are good, by allowing the student to start and having time and resources set aside for GMAT certification. But I wonder how many take the time to find out whether it is lack of awareness, interest, timing, geography, content, structure, reputation or finance that makes promising student choose a different school. For those that interview candidates, I assume some of this comes out in discussions, but I have my doubts as to how well defined and executed these processes are.
I also have a sneaking suspicion that many students choose a business school for more mundane reasons that they tell school officials. It sounds better to say you chose this particular program because you like its specific focus on subjects or teaching philosophy (differentiation again – see point 1 above) than because the school is conveniently situated or your friends go there.
4. Business Schools make their web sites viewable, but not findable
Findability refers to the degree to which your web site or specific page can be found by a search engine. As search technology more and more becomes the preferred interface to information, having a findable web site becomes very important. But more and more schools are finding that when you Google their specific master programs, the description of the the program found at Masterstudies.com comes up higher than their own description.
This is because schools spend a lot of money creating nice-looking web sites, but not much on making them findable. I think this is because the school has an understanding of how to create nice exclusive-looking brochures, but don’t know much about search engine optimization. The visual design of a site is outsourced to an ad agency, and the maintenance of it done through some content management package that does not use descriptive directory and file names, instead hiding new and interesting programs behind cryptic URLs. Perhaps each business school thinks their brand equity is so strong that students will know about them and come in the front door (i.e., the home page) like they used to do 10 years ago?
I have always wondered why business school web sites are done in such an overadministered and cumbersome fashion – for instance, few business schools set up ways for faculty to have blogs, instead requiring them to have official-looking web pages that are pain to maintain and leaving blogging to those who either set up their own blog outside school premises or have the technical gumption and political power to install the software on school infrastructure themselves. There are simple and cheap solutions around – Drupal, for instance – that allow descriptive directories and simple, shared content management. And when it comes to content – why not just use Movable Type or WordPress and the underlying software for faculty and other writers? In that way, the content would be plugged into what is beginning to look like the Semantic Web almost by default.
Given that I am on the Board of a company that tries to help business schools recruit internationally, I personally think this is just swell: Lots of business extension possibilities for us. But there is low-hanging fruit here: Simple, effective strategies and practices that business schools ought to execute on, with or without our help.
As marketing and recruiting increasingly goes on line (and, after that, into communities such as LinkedIn and Facebook), business schools will have to understand and change their marketing to make themselves much more differentiated and findable. In the meantime, there is room for first (or, rather, fast second) movers.
May your school be one of them.