Explanation of the College Admissions Marketing Funnel

on December 14, 2016

The college admissions funnel is a multi-staged pipeline that starts with prospective students and ends with enrolled students. Each stage of the pipeline (level of the funnel) is narrower than the previous, but also more certain. There is a much greater number of students at the top of the funnel, but these students also have the lowest level of interest in the college. As the funnel narrows, there are fewer students, but their level of interest increases and they progress closer to the ultimate goal, of an enrolled student.  

 

There are several metrics that one can use to measure the success in moving students from one level of the college admissions funnel to the next. Typical ranges are shown in parenthesis after each metric

 

Metric Calculation Range
Response Rate Inquiries/Prospects 5 percent - 15 percent
Conversion Rate Applicants/Inquiries 10 percent - 25 percent
Acceptance Rate Admitted Students/Applicants 50 percent - 80 percent
Yield Enrolled Students/Admitted Students 20 percent - 40 percent
Capture Rate Enrolled Students/Confirmed Students 85 percent - 95 percent
Summer Melt 100 percent - Capture Rate 5 percent - 15 percent


Driving the College Admissions Funnel

 

While many colleges buy large lists of student names and exhibit at college fairs, these students are the least committed to the college. One can certainly try to target marketing efforts toward the students who are most likely to progress to the next level of the funnel, such as by targeting list buys geographically, but this is an inherently inefficient process. Efficiency improves the further down the funnel one gets, as the pool of prospective students becomes narrower. Starting further down the funnel also protects the college from recent trends, such as students applying to more colleges, since the students near the bottom of the funnel are more likely to enroll. Ideally, one would want to skip several levels of the funnel to engage directly with the students who are most interested in the college and a good fit.

 

The more data a college has about each student, the better the college is able to predict whether the student will ultimately enroll. This has led to increased reliance on predictive analytics, like Bayesian statistics, and demonstrated interest.

 

One can draw an analogy with internet advertising pricing models, as shown in the table below. The cost increases as one moves down the funnel and gets closer to the ultimate transaction, but the quality also improves. Clearly, one can convert from one fee metric to another, from CPM to CPC to CPL to CPA, by calculating the conversion from pageviews to clicks to leads to actions.

 

Restrictions on Buying Students
 

Federal law concerning incentive compensation prohibits colleges from paying fees per enrolled students, with an exception for international students who do not qualify for federal student aid. Specifically, section 487(a)(20) of the Higher Education Act of 1965 [20 USC 1094(a)(20)] indicates that colleges may not pay for advertising based on the number of students who apply or enroll: “The institution will not provide any commission, bonus, or other incentive payment based directly or indirectly on success in securing enrollments or financial aid to any persons or entities engaged in any student recruiting or admission activities or in making decisions regarding the award of student financial assistance, except that this paragraph shall not apply to the recruitment of foreign students residing in foreign countries who are not eligible to receive Federal student assistance.”
 

The regulations explicitly address internet advertising and marketing activities, indicating that CPC advertising is permitted while CPA advertising is not. Specifically, the preamble to the final rule as published in the Federal Register 75(117):34819, June 18, 2010, states: “Several negotiators were concerned about the impact of the proposed language on an institution's Internet-based activities. Negotiators asserted that the HEA permits advertising and marketing activities by a third party, as long as payment to the third party is based on those who ``click'' and is not based on the number of individuals who enroll. The Department agrees and does not believe that the proposed regulatory language would prohibit such click-through payments.”
 

In Conclusion
 

Long-term, these restrictions will cause colleges to drop low-quality lead sources and to use better-targeted lists of names, as well as trying to skip the first few layers in the college admissions funnel. This will lead to a decrease in the number of students who are recruited, but will lead to an increase in the number of applications and enrollments. It can also potentially lead to a decrease in the recruiting costs per enrolled student, saving the college some money.

 

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