Ten Temptations in Tough Times: 2020 Edition
Given how this year has played out, you may have forgotten to celebrate the tenth anniversary of the Great Recession. I remember 2010 all too well; it reshaped our business. As traumatic as it seemed at the time, the effects of those dreaded days yielded great benefits in terms of our focus, our fine-tuning and our priority-setting.
At the time, we published a piece about how easy it was to give into some temptations that were ultimately unhealthy. I stumbled upon that post a few weeks ago and was amused by its relevance ten years later as we’ve faced a series of new crises. The temptations still seem strong. With a little updating, we present them again with the hope that you are sufficiently convicted not to cave in.
Assuming your consumers have no capacity or are unwilling to buy
Given COVID’s influence on the economy, consumers likely will take even more budget-conscious perspectives, plan more carefully and consider a wider range of options; that doesn’t mean that people will stop going to college. We may be on the precipice of a reduction in the number of high school graduates over the next 15 years, yet the opportunity to offer degrees to those who want and need them is not diminished. Granted, your audience may look different than it has in the past. Still, don’t make the assumption that there’s no room for you in the market. For an analysis of examining demographic factors and your market share, read that here.
Trimming marketing budgets as part of across-the-board cuts
Succumbing to a 10- to 20-percent, across-the-board budget cut might be feasible for some departments, but not for marketing. With competition for students and donors increasing, it will take more resources than ever to successfully market your institution. Rather than trimming your marketing budget, why not work harder to ensure that every marketing investment you make is a worthy one? Data show that those organizations that did not reduce marketing budget—and in fact, increased expenditures—more quickly returned to health and gained market share post-recession (Biel and King, 1999; Amissah and Money, 2015). Let me direct your attention to a post from a few months ago that considers budgeting options before you.
Throttling marketing efforts
The disruption on many fronts throughout 2020 will inspire more creative products and services. Delivery methods will be introduced that will create even greater competition. As a result, your marketing efforts will necessarily increase. In fact, in this climate, you may find more creative and cost-effective means to spread the good word about your institution. But if for a minute you thought that less budget meant less effort, you’re mistaken.
Don’t assume a quick return to your robust budget (if indeed you ever had one). This year has been too volatile for higher ed to expect income growth, let alone make up for 2020 losses. In this economic climate, people are already frustrated and tense. The last thing you want to do is cut those service endeavors that distinguish you from your competition. In fact, now is the time to step up those front stage efforts. Eliminate services that are seen as superfluous, but make sure that you’re not trimming areas that are most important to your customers.
Changing nothing and riding it out
Now is the time to think about making adjustments that will improve the quality of your offerings. If you’re hoping that if you can just hang on and eke through these challenges, you’ve missed a golden opportunity. First, it’s unlikely you’ll be able to do that unless your endowment is ginormous. Second, these occasions (recessions and/or pandemics) open windows to reimagining how you can be stronger and better. See below.
Misusing an occasion to re-invent
Eliminate those albatrosses that have stood in the way of greater success. Use this opportunity to be creative, to dream differently and to be a better form of you. Self-assessment and study of your market responsiveness will lead you to a better place. Don’t miss this occasion. I guarantee it will be difficult, but it will be worth every drop of blood, sweat and tears in the long run. A glaring example is the speed of which institutions have recognized that live and in-person events may have had less value than they had in the past.
Making choices misaligned with your mission and market position
COVID is forcing you to make tough decisions. Often, you are having to choose between the lesser of two evils. You’ll be tempted to take the path of least resistance, but that may not be the most advantageous route long-term. When you plan, determine strategies that support both your mission and your market position. Your mission is your rock in hard times: why do you do what you do? And your market position is your sail on a stormy sea; knowing who you are, how do you behave? For example, if you’ve reached a point of selectivity that positions you well in your market, hang on to it—even if it means enrolling fewer students (gulp here). Recommit to your mission, assuming it is still relevant (gulp here, too).
Responding to hearsay and the word on the street
It’s easy to hear about the setbacks at other colleges and universities and assume that the same is true for your institution. But before you make a knee-jerk decision, dig deep to get the facts regarding your own economic health. Things could be a lot better than they seem. As we have watched the unevenness of the deleterious effect of COVID-19, we are more convinced that not every institution suffers the same or equally. Be sure you are not borrowing trouble from what you read in the Chronicle of Higher Education or Inside Higher Ed.
Raising prices to cover expected shortfall
Increased public awareness of and attention to the rising cost of higher education—coupled with the madness called 2020—has made planned increases in tuition particularly risky without significant product changes. Carefully calculate the long-term risks of standard price increases. We are watching an increase in price adjustments, i.e., reductions, that could become a pattern.
Extending efforts to new markets before saturating primary markets
Of necessity, you likely have your eye on new markets. Nathan Grawe has convinced you to look beyond your traditional markets to expand your reach. And your new capabilities with remote learning show promise of opportunity without regard to geography. While you’re exploring new opportunities, don’t forget to deeply saturate your primary market. Rather than making a big investment in new and untested markets, now is the time to hone what you’ve always done extremely well for years.
Though the coming year may be less stressful than 2020, you still face many unknowns. You don’t yet know what President-elect Joe Biden’s administration will mean in terms of economic stability, COVID’s sting even with a vaccine, market confidence, or legislation in support of higher ed. Keep your hopes high, and don’t give into temptations for short-term fixes that could create lasting or lifetime problems.