University, Inc.
When Sandra King moved on from Northeastern University to a new job at Bentley College two years ago, she left behind the rather foggy title of vice president of university relations. You can imagine someone in that position overseeing customer service, or maybe contract negotiations with the faculty. When Northeastern hired King's replacement nine months later, they gave the new guy a title that left no doubt about his responsibilities — or the school's priorities: vice president of marketing and communications.
Pulsing behind that title change is a frantic effort at Northeastern, and at schools across New England. You probably haven't heard much about it, because we take the primacy of our colleges and universities for granted around here, but there's a fierce battle raging on most of the region's 270 campuses. Some say it's life or death. That's because two very difficult realities loom on the horizon for New England higher education.
First, we're losing residents to cheaper, warmer states, which means that starting in 2008 we're going to begin producing fewer high school graduates to feed enrollment at our local colleges. That wouldn't be so bad if it weren't for the second problem, which is that more and more students from the rest of the country are deciding New England higher education isn't worth it. Universities elsewhere have greatly improved, usually offer better climates, and almost always cost less. Harvard, Yale, and MIT are never going to have problems attracting students, but the future looks dicey for some others.
Since 1989, the proportion of U.S. students who attend college in New England has fallen from above 6 percent to around 5 percent — about the same as the region's share of the overall population. The Boston Foundation will release a report next month warning of the vulnerability of New England's colleges and universities. “This is a brutally competitive industry,” says Paul Grogan, the foundation's president. “To assume we will always be the leader and our institutions will always remain competitive is dangerous.” Evan Dobelle, president of the New England Board of Higher Education, is even more direct. “The country's demographics have shifted, and it's just as challenging for higher education as it was for manufacturing,” he says. “Somebody's going to go under.” In just the last five years, at least three small New England colleges already have.
Nobody expects an implosion of the region's higher education industry, of course. Schools here remain among the finest in the world. But college is a $20 billion-a-year concern in New England, one that employs a quarter of a million people. The ripple effects of a downturn in this industry would dwarf job losses from mergers involving, say, Fleet or Gillette.
How, then, do area universities make sure their doors stay open? How do they convince students to come to their colder, costlier campuses? The same way, it turns out, that you convince them to pay more for a cup of coffee at Starbucks than at Dunkin' Donuts. Branding, baby. Branding.
That's the hot word at just about every university in the region. Colleges and universities are no longer simply institutions of higher learning: They're brands, to be marketed with the sort of aggressiveness and sophistication traditionally associated with Coca-Cola or Target. Universities are advertising in magazines and on television, radio, and billboards. They pay to hang their names in Fenway Park. They're redesigning logos. They're pouring recruitment resources into fast-growing areas in other parts of the country. And lately, in another trick they've borrowed from the corporate world, they've started to expand their product lines. They're opening franchise campuses abroad while here at home, they build more luxurious dorms, student centers that resemble malls, and recreation facilities that include climbing towers, batting cages, and indoor ropes courses.
Brian Kenny, who took over for Sandra King at Northeastern after several years in the corporate world, was in charge of marketing at Boston University a decade ago. “I wasn't part of the leadership team [back then], and the marketing wasn't considered a key part of the university's overall business strategy,” he says. “That has changed completely. Because of the demographics, universities are starting to adopt more corporate methods to compete. As much as this is an institution where we pass on knowledge and teach students, it's also a business that needs to be run in the way successful businesses are run.”
As you might expect, the branding frenzy has met with considerable skepticism from many academics and public-policy analysts. They believe the focus on selling has distracted colleges from their real mission: education. These critics say that at the same time governments are slashing money for research and financial aid, schools are devoting increasingly precious dollars to marketing and what amount to campus theme parks. That only accelerates the annual increases in tuition, which has broken the $40,000 barrier at many Boston-area universities. The critics charge that recruitment efforts are targeted at the sort of wealthier, white students who can afford these escalating costs. Increasingly, they say, private and public universities are turning their backs on the poor. Many schools have even moved beyond the reach of middle-class families.
No one works harder to “tell our story” — as academic institutions like to describe their marketing efforts — than Northeastern, which is furiously trying to shed its image as the anti-Harvard, the working-class commuter school. Anyone who graduated from the university just 15 years ago would scarcely recognize it today. Beautiful brick residence halls (as colleges now insist on calling dorms) line the new West Campus, along with sparkling new lecture halls and classrooms. The student center looks like the lobby of a luxury hotel, with wood-paneled walls, big-screen TVs, a Starbucks, and a nightclub.
This building boom has cost $386 million since it began in 1998, and it's far from done. Today, 44 percent of undergraduates live on campus, a figure that will nearly double when the construction projects are completed years from now. It's all part of a master plan to change nearly everything about Northeastern: better campus life, better academics, better students, and better faculty. You can't compete for the best students, after all, if you can't deliver the educational product they demand. And make no mistake: Under its president, Richard Freeland, Northeastern is targeting markedly better students than in the past, and it's looking far beyond New England to find them.
Of course, all the improvements in the world don't help if nobody knows about them. So three years ago, Northeastern launched its branding campaign, which included what Brian Kenny calls “targeted national media buys in markets we were trying to get better known in.” Those markets, unsurprisingly, happened to be areas with growing populations: California, Florida, the mid-Atlantic states, and Texas. The school advertised in the New York Times, the US Airways in-flight magazine, and the Philadelphia transit system. It put up billboards in New Jersey and Baltimore and in Fenway. It sponsored the Osgood File on CBS Radio in an effort to reach not so much potential students as their “influencers” — their parents and guidance counselors. It sent representatives into high schools in the target regions to pitch guidance counselors and meet one-on-one with students. The university hired a full-time admissions counselor in California who travels frequently to West Coast high schools.
“We were starting from a basis of zero recognition in some of those areas,” Kenny says. “Any way we could find to get our name out there — even if people just had a general perception that we were in Boston. That's a big draw. And if a new name started to surface as an option for people to look at in Boston, that helps.”
It certainly has helped. In 2000, just 34 percent of incoming freshmen came from beyond the Northeast. Four years later, 46 percent did.
So the marketing has proven effective, but the single best way to build your brand, as every president of every college and university in the country knows, is to make an impression where it really counts: the U.S. News & World Report rankings. Each year the magazine compiles its list of the best colleges, using such factors as selectivity, SAT scores, reputation, spending, retention rates, and the ratio of students to faculty members. The official line from the magazine and the colleges is that the rankings are just one tool students should use to find the right school. But everybody knows the truth: Parents and students obsess about them. Consequently, so do universities. Because the rankings are so important in creating buzz, schools try to improve in the areas U.S. News decides are important, and they massage the numbers they submit to the magazine. They do all that while at the same time insisting, for the most part, that the rankings aren't important. Who wants to admit you're allowing some magazine to help determine how you educate tomorrow's leaders?
Actually, Northeastern does. Freeland's stroke of genius has been to not only openly embrace the standings, but to actually incorporate them into his marketing strategy. While other schools pretend they hardly notice the rankings, Northeastern uses them to sell itself. The second page of its most recent annual report is headlined “SURGING FORWARD” and boasts that the school jumped from 150th in 2002 to 120th this year. “WHAT'S NEXT?” it asks. If you believe Freeland, what's next is a ranking in the top 100. That's where you need to be, he's said to just about anyone who will listen, if you hope to survive the coming student drought. “We are in a hurry,” he told Northeastern's trustees last year. “We intend to achieve top-100 status before this decade is out.”
There are plenty of people who question the priorities of the higher education industry these days, the lust for U.S. News success, and the construction bonanza. Still, it's difficult to find a Freeland critic. Even those who decry the measures he's employed admit he's resuscitated a school that nearly went out of business in the late 1980s. “They've done an extraordinary job with an institution that doesn't have the brand in Boston,” Evan Dobelle says. “I mean, they're outbranded by 15 colleges as far as what people would perceive as socially acceptable for their child. Their biggest brand used to be when they [won] the Beanpot.”
So Northeastern's brand is on the rise, but how to speed things up with U.S. News ? One way to quickly climb the rankings, Freeland confided to the Northeastern board, is to improve your reputation among your peers, which accounts for a quarter of your score. “The problem, of course, is that the process by which this happens is glacially slow,” he told the board. To accelerate it, he said, “We have also launched a targeted effort to tell our story to the academic professionals best positioned to influence perceptions of Northeastern.” That meant paying for a series of full-page “advertorials” in the Chronicle of Higher Education, a trade publication read by just about anybody U.S. News might poll. Got it? What your peers think about you plays a big part in your ranking. So lobby your peers. Take out an ad where they'll see it. Tell them your story.
The results so far have been spectacular for Northeastern. But is it possible that what's good for one school, that what benefits New England's imperiled universities, is bad for higher education as a whole? For society in general? Yes, it's possible.
The raw numbers at Northeastern reveal a university in the middle of a stunning ascension. This year's freshmen had a mean SAT score of 1211, up 101 points in four years. Thirty-five percent graduated in the top 10 percent of their high school class, compared with just 16 percent four years ago. Northeastern has gotten more selective, offering places to 42.3 percent of applicants last year, about half as many as it let in four years earlier. And more of those who came stayed. In 2000, nearly 17 percent of freshman did not return for their sophomore year, a figure that has dropped to less than 12 percent. The school has gone after higher-performing students and accepted fewer of them — the exact recipe for improving in the U.S. News rankings. It has become, in the words of the industry, more competitive.
Northeastern's student body appears to have remained about 20 percent nonwhite, according to statistics supplied by the school, but most of the country's four-year colleges and universities have gotten whiter and more affluent as they've gone after higher U.S. News rankings. Northeastern says it doesn't have economic data for its students, but government figures show that only about 13 percent of its students received Pell Grants, federal financial-aid grants reserved for the poor. “The more you try to make a college represent America — increasingly people of color, increasingly a range of family income levels — the more you risk your rating in U.S. News, ” says Robert Woodbury, former chancellor of the University of Maine system. “That's pretty stark, and that came from a college president.”
There are several interconnected reasons for this problem. First, a lot less government financial aid goes to the poor these days. In the mid '80s, some 86 percent of federal aid was need-based, meaning it went only to those who couldn't otherwise afford tuition, says Tom Mortenson, a senior scholar with the Pell Institute for the Study of Opportunity in Higher Education. Today, the proportion of aid reserved for the poor has fallen to about half. Meanwhile, Mortenson says, a Pell Grant buys only about half as much college education today as it did in the 1970s. The $4,050-a-year limit has not kept pace with the cost of tuition. That leaves it to the schools — many of which are already spending heavily on construction and equipment — to make up the growing difference. More and more, they simply don't.
Mortenson's campus contacts tell him the dictate from the top is to “bring in freshmen with higher academic credentials so they look better in U.S. News, and they want more full-pay students so they can maximize revenue.”
A profile has emerged of the sort of student who will help you in the U.S. News rankings without hurting your bottom line, Dobelle says. “They're all focusing on that high-paying student from [for instance] a Philadelphia suburb. 'How do we get that kid who's smart, with a 1250 SAT and a B-plus average, and a full payer?' They're all after that kid.”
That kid is more often white than anything else. Mortenson says minorities and the poor are being pushed out of four-year schools and into community colleges. The number of Pell Grant recipients in four-year rather than two-year colleges has dwindled steadily from about 62 percent to 45 percent in the last 30 years. Mortenson has also found that of all whites enrolled in college, more than 57 percent go to four-year schools. For blacks and Hispanics, that number has dropped to 51 and 38 percent, respectively.
Meanwhile, since everybody wants that full payer with the 1250 SAT, he's going to get some pretty attractive offers, like reduced tuition, even though he may not need it. Woodbury calls this “buying students.” Schools are using precious financial aid not to provide opportunity to those who can't afford tuition, but to bring in the profile student, he says. That's what keeps a college competitive, and that's a college president's job. “But what's good for an individual campus, if everybody does it, may be bad social policy.”
Sandra King designed much of Northeastern's branding campaign. Now she's helping Bentley tell its story. The school's new marketing strategy is reminiscent of the youth-basketball teams Nike and Adidas created specifically to build their brand and produce future endorsers. And it's an indication of where the marketing of higher education is headed.
In December, Bentley contacted guidance counselors in the United States and overseas, inviting nominations for a program to identify 25 high school juniors “who are changing society.” A panel of judges has whittled down the 292 candidates, and this month Bentley will honor the Tomorrow25. Each honoree will be flown to the Waltham campus for an awards ceremony and panel discussions featuring stars of American industry.
It certainly sounds like a treat for the chosen young men and women. But think of what it means for Bentley. “Visibility,” King says flatly. “Not might be, there will be media attention. That's a strategic way to get our message exposed, to be highly visible to prospective students and their families.” To grow the brand.
The keynote speaker will be Norm Pearlstine, editor in chief of Time, Inc., a company with which Bentley has forged what King calls a strategic partnership. “It's the widest-circulation weekly in the world,” King says. “It's one of the top 50 brands in the world. Their editorial content is closely aligned with our academic focus. It's our target market.” And, she points out, versions of Time magazine are distributed in high schools. Time is cosponsoring the leadership conference, and the Tomorrow25 students will be featured in advertising in the magazine.
Topping it all off, “The people we invite to the event will be from industry around the world,” King says. The idea is that the business leaders see Bentley as an innovator, a “thought leader.” That adds value to the Bentley degree, the Bentley brand.
King dismisses the importance of the U.S. News rankings. It's not that good ratings are unimportant — she admits that schools are preoccupied with them — it's just that, in the end, branding is more powerful. “I don't think being in the top 100, or the top 50 for that matter [Bentley is tied for 8th in the North in its category and is 62nd among graduate business schools], is really the turning point in whether you'll be successful. If you can be clear in your mission — so that a guidance counselor can guide the right kind of student to you, so that a parent can guide their young person to you, so that a young person can say, 'Yes, I can visualize myself there' — that's of much more value in the long run.”
As evidence, King points to Bunker Hill Community College in Charlestown, a two-year school that, by definition, will never make the U.S. News rankings, but has gotten the message that marketing generates attention. “They're doing a very good job right now of positioning themselves,” King says. “We designed a new logo; they did too. They have a new tag line. I mean, they have an interesting population of, I think there are 45 languages spoken on their campus.”
Actually, it's 62. But the fact that King gets the idea is testament to the power of branding. The marketing campaign Bunker Hill launched last fall (“Imagine the Possibilities,” it's called) is far less complex than Bentley's, but the results have been dramatic. Suddenly, people are aware of the school, talking about it, even. Although Bunker Hill is overflowing, with an enrollment that has grown 25 percent since 2000 and now stands at 7,800 students, it has been all but invisible in its own city. “We're overshadowed by prestigious, private institutions,” says Mary Fifield, the college's president. Since the marketing campaign, though — television spots, print ads, billboards — Fifield keeps hearing from everybody how there just seems to be a buzz about the school.
Whether you're an elite four-year university or a community college, the key, King says, is knowing what you have to offer, what your demographic is, and how to tell your story. The rest is simply academics.