Optimization
Increase Growth and Cash Flow
An outdated program portfolio may include once-great programs that now have limited student demand or jobs for graduates. Great new programs may be overlooked. An unfocused portfolio may have a scattering of small programs that are difficult and expensive to manage. Like good gardeners, educational leaders must regularly decide what to prune and what to plant.
Optimizing price can have substantial near-term financial benefits for most higher education institutions. The right prices enable colleges and universities to drive enrollment growth, improve cash flow, or, more often, a blend of the two. The results of these changes can be substantial. Importantly, pricing is also one of the few strategic changes that can be made relatively quickly — since there are relatively few changes required in systems and behaviors.
Gray’s Approach
- Analyze the Competition Compare competitor prices to determine how prospective students might assess your pricing.
- Survey Design Create a set of offers that include price level, discount, communication, and other factors to be tested.
- Develop Sample Identify a robust sample of relevant participants for the survey.
- Conduct Survey Collect and tabulate results.
- Build PC Simulation Use simulator to estimate effects of various price levels, structures, and communication approaches.
- Build and Run Financial Models — optional Project the effect of pricing strategies on revenue and profit.
- Select Strategy Share results with leadership.
In the illustration above, financial results are realized at $25,000 in tuition.