As a higher education consultant helping institutions recruit international students, the question I get asked the most at the moment is, “what’s everyone else doing?”
So, last week I asked those I spoke to if I could summarise the key themes of our discussion. Below are 10 insights I gained from my conversations which I hope provides you with a broader context when developing your own strategies. While we don’t know what the “new normal” will look like yet, this quote from John F Kennedy seems very appropriate at the moment;
“The Chinese use two brush strokes to write the word 'crisis.' One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger--but recognize the opportunity.”
If you would like to discuss or add to any of the commentary below, please let me know. For further information on our unique student-centered approach to student recruitment, please click here.
1. Increasingly competitive market
All the intuitions I spoke to expect international travel restrictions to stop semester 2 2020 on-campus study for international students. As a result, institutions are planning to refocus on onshore international students (a source “market” larger than China), while international travel restrictions remain in place. Higher unemployment may entice current international students to study another course as they wait for the economy to recover.
Most institutions expect state border travel restrictions to have been lifted by semester 2 2020. This will enable inter-state recruitment of existing onshore international students (if campuses re-open).
There is significant concern a global recession will reduce demand as middle-class family incomes are impacted and their ability to afford an international education is reduced. [It’s worth noting that the GFC (2008) had a minor impact on Australian domestic and international student enrolments. In fact, 2009 and 2010 both posted strong domestic student growth (prior to demand-driven funding in 2012). International student numbers also grew steadily up to 2010 when visa changes, a rise in the Australian dollar, and Indian student attacks saw international numbers decline].
Consider what actions can you take to strengthen your institution’s value proposition to maintain student numbers in a more competitive market? A better understanding of the different attitudes and behaviours of each prospective student segment can help you develop more relevant and influential activity.
2. Significantly reduced opportunity for semester 2 2020 international student recruitment
Many unknowns are making planning for semester 2 2020 very difficult. Competition for international students could be significantly reduced as institutions reduce international recruitment investment to cut costs in 2020, but then so could the potential number of students.
Department of Home Affairs lack of clarity on how starting online impact’s a student’s visa and post-study visa will deter some students from enrolling, especially from migration focussed countries.
China is thought to be the first offshore market that will recover, but most universities consider semester 1 2021 will still be significantly impacted.
Consider identifying a prospective student’s barriers to applying, accepting and starting online in semester 2 2020 and develop initiatives to address student concerns and reduce the barriers to starting online for the first semester (or 2).
3. Pressure to increase financial discounts and incentives
Student pressure is building to compensate new students for (temporary) online course delivery that fails to replicate the broader face-to-face student experience by offering increased discounts.
There is also concern a price war will break-out when the travel restrictions are lifted as Go8 universities who don’t normally discount heavily fight for market share in key markets (e.g. China) to rebuild revenue.
Concern that increasing discounts would not only reduce the margin on new students but would also increase the pressure to offer current students the same discount, further reducing institutional revenue.
Consider avoiding a race to the bottom, by identifying the student experience gaps between online and face-to-face delivery and developing initiatives to close the gaps and build value into the online experience for students rather than increasing discounts.
4. Revised priorities for international markets
Diversity is likely to take a back seat as revenue becomes the #1 short term priority, especially for the Go8 who have been impacted by the COVID-19 crisis the most, (China likely to be the #1 priority market due to its historical size as a source market).
COVID-19 recovery will vary greatly by market, ensuring some key markets are not available as source countries as early as others, (again most think China will emerge from the crisis before other large markets).
Given current student and post-study visa uncertainties, migration driven markets may be slow to commit to starting, (this will change if the Department of Home Affairs provides favorable guidance soon).
The current lack of part-time work will impact living cost-driven markets, which again might be slow to commit to starting until they can be sure they will be able to find a part-time job to cover their living costs.
Consider reviewing market priorities for each semester start date, developing new criteria to assess the potential of each market, and its’ fit with your institutional strengths.
5. Need to build stronger agent relationships
Most agree that the way you treat your partners in a time of crisis will drive your future relationship. Agents are facing significant cash flow and profit pressures and some will not survive. They are even more in the dark regarding what’s happening in Australia than Australian universities as they try to keep up with how each country around the world is managing the crisis.
Many agents are pushing to offer prospects discounts (whilst maintaining their margin) to drive sales, which only increases the risk of a price war when the travel restrictions end.
Some intuitions are taking the time to focus on improving the quality of the student experience when prospects visit key agents to drive agent recommendation and student preference.
Others are reviewing the ROI of their agents and their agent activity, to reprioritise agents and activity moving forward.
Consider increasing the quality of your relationship with key agents by developing joint business plans with your top 20% of agents (who probably deliver 80% of students). How can you develop a shared business plan that drives growth for the agent and your institution by improving the speed and ease of applications and service, the prospective student experience and recommendation of your institution, rather than simply focussing on the % margin. Packaged good companies successfully introduced this style of key account management when dealing with their key customers 10 years ago, proving the benefit of a win:win approach.
6. Need to address prospective student’s evolving attitudes and behaviors
The issues students care about in different countries have been impacted by COVID-19 in different ways, requiring value propositions and marketing campaigns to evolve to better meet prospective student needs, (which will be different in each market).
Health safety will emerge as a big issue for prospects, as no-one will want to choose to study at a COVID-19 hotspot, or where quality healthcare will not be available to them. Will Australia be considered a safer choice than staying at home or studying in the UK or Canada?
A global recession will increase prospects’ focus on the return on investment from overseas study, developing your value proposition to justify the cost and demonstrate career prospects will be increasingly important.
Prospective Chinese students, in particular, are increasingly worried about discrimination following the COVID-19 crisis. In a recent study, 30% of Chinese agents reported that students had “experienced some form of discrimination, directly or indirectly, while currently abroad, causing prospective students to change their destinations according to parents or counselors’ directions”, (BOSSA).
Increased market competition will require institutions to find a way to stand out from the crowd and engage prospects to avoid being lost in the “sea of sameness”.
Consider spending time to understand how the COVID-19 crisis is impacting each markets’ attitudes and behaviors and how your competitors are responding. Develop market specific activity to address the different student attitudes and competitor pressures.
7. Developing integrated digital recruitment process
All agree that a student orientated online recruitment process needs to be developed, but siloed team working is creating inconsistencies and gaps in the student experience, (web v’s collateral v’s email v’s webinar v’s phone calls).
Clarity is required on entry requirements given delays to exams and restrictions on face-to-face English testing to enable prospects and agents to predict the likelihood of receiving an offer.
Surveys suggest students intend to defer rather than cancel their study, so most institutions are focusing strongly on nurturing current offer holders to convert them to study at some point in the future.
Most are concerned about simply replacing in-country events with webinars and are developing peer to peer recruitment approaches.
Consider increasing the emotional engagement of your activity by offering to connect prospects with current students from their country. For some markets, academics and alumni can engage prospects in the issues they care about the most better than current students to build preference and commitment to study at your institution.
8. Cutting budgets
Most institutions haven’t cut recruitment budgets deeply (yet), but all are cautious that more cuts are on the way.
Existing programs may need to be cut by 50% to offset the dual pressure on budgets stemming from new digital recruitment costs needing to be paid at the same time overall cost savings are needing to be found.
Significant time is being spent on analysis to understand the return on investment of different activities. But cross-functional tension is expected when international recruitment costs are cut across marketing and recruitment teams that have separate reporting lines.
Consider using the 80/20 principle to identify which priorities to retain and which activities to stop. Carefully select KPIs for ROI measurement to avoid intended consequences as teams manage what we measure, (e.g. it’s easy to generate leads by talking about scholarships, but they are typically low quality and cause issues later in the recruitment process.
9. Struggling with internal decision making
All agree it’s currently hard to build consensus and make decisions cross-functionally. Teams are constantly asked for more information that may not even exist as senior leaders struggle to build an evidence base to drive decisions.
Historical data will not be an accurate guide for the future and even though stability is starting to develop in key assumptions, many uncertainties remain.
For most, it feels like a new plan is required every week as new information comes to light and previous decisions are over-tuned.
Consider that winning in a highly competitive market requires student-centric strategies, rather than institutionally centered approaches. If in doubt, ask yourself, which decision would the student prefer?
10. Biggest unknowns;
Reopening of campuses for face-to-face teaching.
Relaxation of travel restrictions and pre-conditions to enable international students to study face-to-face.
Relaxation of inter-state travel restrictions.
Student visa and post-study visa clarification for international students starting their course online.
If you would like to discuss any of the areas raised above please let me know, I'd be only too happy to help.
At MacMorgan we help institutions develop a student-centered approach to growth, if you'd like to find out more about our unique approach, please click here for more information.
John Chatterton
+61432 906 790
john@macmorgan.co