This article appeared as "Full Measure" in the Winter 2023 issue of Independent School.
Do you know how much it costs to enroll a new student at your school? If you answered no, you’re not alone. The question of cost-per-enrollment is one that many, if not most, independent schools struggle to answer. Maybe it’s because the data needed to calculate a new enrollment lives in different systems or is collected in a way that makes it difficult to separate admission and other aspects of the school. But being able to answer this critical question has far-reaching consequences for a school’s mission and revenue.
Understanding the dollars invested in each new student—known in the business world as “acquisition cost,” a measure of how marketing/sales departments are doing—provides insights that schools can use to inform decision-making, strategy, collaboration, and budget across the entire enrollment management spectrum. And the upheaval and uncertainty of the past few years has made it even more important for independent schools to gather and analyze their own cost-per-enrollment data so they can optimize enrollment.
Enrollment is everyone’s job at an independent school, and school leaders—including heads, enrollment leaders, business leaders, and marketing departments—must work together to better understand what goes into admitting a student, how tracking the costs can help with decision-making, how similar schools are reporting their cost-per-enrollment numbers, and more. That’s why NAIS, the Enrollment Management Association (EMA), and the National Business Officers Association (NBOA) came together to help schools evaluate their admission work with “The 2022 Independent School Cost-Per-Enrollment Study.”
The Study
In November 2021 through January 2022, NAIS, EMA, and NBOA surveyed member school admission leaders to learn more about the costs related to admission and marketing in their schools. They asked about admission staffing costs, marketing and communication expenses related to admission, promotional and software costs, travel costs, and more. One-hundred-fifty-four schools, including day (76%) and boarding (24%) schools, responded to the survey. Almost all schools were coeducational (95%), and about half (48%) included both elementary and secondary grade levels.
What is cost-per-enrollment? For this study, the industry groups defined it as the total cost related to all admission and marketing efforts a school uses to acquire a newly enrolled student. Just as each independent school’s enrollment practices are unique, so are their costs and resources. That’s why the specific metrics used to determine cost-per-enrollment may vary among schools. There are, however, common categories that many independent schools share, which informed the equation for this study. The following categories comprise “newly enrolled student” costs: admission compensation, promotional/software costs, travel/development, office supply/general costs, and additional admission cost. (Download a worksheet to calculate your school’s cost-per-enrollment and access the study at nais.org.)
Given the importance of enrollment, schools should invest in a sustainable enrollment management strategy that is informed by research, data, and best practice. The cost-per-enrollment study brings together all three elements, helping school leaders better understand the elements that go into admitting a student. Tracking these costs can help teams make more strategic decisions and learn how similar schools are reporting their cost-per-enrollment numbers. By examining enrollment and assessing specific activities and actions, schools can build a shared understanding of their goals, determine how well they’re achieving those goals, and learn what it will take to improve.
The Findings
So, how much does it cost to enroll a student at an independent school? In the study, the median cost-per-enrollment was $3,677. But in many instances, the study’s findings were less definitive and raised more questions than answers. However, some findings prompted interesting ideas schools should consider and discuss when determining their own cost-per-enrollment.
The largest schools (700+ students) had the lowest median cost-per-enrollment of all school groups—and saw the highest median return on their investment: $8.60 in tuition for each dollar spent on enrollment management in the first year of tuition. While these schools may have spent more on enrollment overall, their total spending per student was lower.
Consider: Are you more focused on hitting the enrollment budget than ensuring that the budget is optimally used? Do you need to rethink your capacity to grow? If you invest more strategically, could you drive down the cost-per-enrollment?
Elementary schools had the smallest cost-per-enrollment: $2,869 per student versus the overall median $3,677 per student. The median cost-per-enrollment for secondary schools was $5,844. The difference between elementary schools and other divisions raises questions about whether elementary schools need to revisit their marketing and retention efforts, especially amid demographic shifts, population decline, financial challenges, and school choice movements among millennial parents.
Consider: Is there room to invest more strategically in your enrollment efforts? Are you prepared to attract the next generation of young families who are facing inflation, rising housing costs, and student loan debt? Do you rely too much on word-of-mouth for new enrollment? Are there ways to consolidate current efforts or share resources?
Most independent schools spent 90% of enrollment costs on staff salaries and benefits, which leaves 10% of costs for enrollment activities. Within those activities, the median spent on travel was $0. While many day schools may not need to travel far for admission activities and acknowledging that the pandemic complicated travel, this still raises questions about community engagement. Are schools going out into communities, or are they waiting for prospects to come to them?
Consider: Is community engagement part of your overall enrollment management strategy? Are there opportunities to have a presence in the community, to share your message, and to learn about your dream families? Do you need to adjust admission responsibilities to make room for community connection?
Only 81% of schools reported having a target enrollment goal. That means 19% do not. While 81% is a significant amount, it still leaves a good portion of schools that are not defining their goals around enrollment. Understanding and being deliberate about what you are trying to achieve is the best way to ensure you are being effective and efficient with your enrollment strategy and budget.
Consider: What is your enrollment target this year? How has that number changed over the past few years? Have your efforts improved enrollment, or do you need to rethink your strategies?
Good Opportunities
So how can your school use this information to strengthen your enrollment management strategies?
Invest in people. A school’s people are its most valuable resource—and largest expense. By investing in your team’s training and expertise, and aligning their responsibilities with the latest best practices, you’ll ensure their output is more successful.
Streamline systems. At many schools, marketing and lead generation efforts are duplicated or misaligned. Each department may use its own process, software, and strategy. Auditing your enrollment management spectrum and streamlining your efforts across departments will help you lower costs and improve results.
Improve inquiries-to-application conversion. The data shows a substantial increase in cost from inquiry to application. This may be because inquiring is easy, and families are willing to do it spontaneously. It could mean schools are getting the wrong inquiries, or there are inefficiencies in the conversion process where families are getting lost. By better understanding your school’s inquiry-to-application process, you can improve this conversion rate.
Strengthen your story. To improve enrollment, you need to authentically connect with your school’s dream families. Clearly and consistently articulating your value proposition and differentiators to prospective students and parents can help your school convert more inquiries and improve cost-per-enrollment.
Commit to measurable marketing. Most schools invest in staff, a website, and maybe a customer relationship management platform but not much else. However, many of the opportunities for growth uncovered by this data can be leveraged using strategic, measurable marketing efforts, such as inbound, digital, and content marketing.
By analyzing the current enrollment management spectrum, streamlining existing systems, and investing in people and strategy, independent schools significantly impact their mission, goals, and revenue.