Why do most college branding efforts end up as meaningless pablum? I think it’s because most colleges have been relatively insulated from the effects of devastating competition. In fact, historically there have been major barriers to competition in the cozy world of higher education. The biggest have been geography, cost, and reputation. Let’s look at those in turn:

Geography. Much of higher education is local. While some colleges and universities do attract students from around the world, the vast majority of U.S. institutions serve local and regional populations. Likewise, the vast majority of students, both traditional and non-traditional, attend college close to home. This means that of the nation’s thousands of colleges, most see their primary competition as being a small number of local schools.

Cost. It’s not cheap to start a traditional college or even to expand one. Many non-profit institutions lose money on every student, and depend on philanthropy and/or state support to balance the books and finance any new construction. There’s no financial motivation to expand existing facilities or open new locations. Certainly such expansion occurs at times, but often it’s a combination of demand and congruence with the school’s mission. The nation’s elite schools turn away nine out of ten applicants, but despite this record level of demand few have made any moves to significantly increase capacity.

The other cost that is a barrier to competition is cost of attendance. Many students would love to attend highly-regarded private colleges or flagship state universities, but even with financial aid these schools may not be affordable. To save money, for example, students are encouraged to complete their first two years of undergrad school at a community college, and then finish at a four-year university. Even if they wanted to enroll these students, the higher priced schools can’t cut prices or offer enough aid to be affordable. Hence, low-cost providers like local branches of state universities, community colleges, etc., can rely on capturing a portion of the market that might prefer to go elsehere but simply can’t pay more.

Reputation. College rankings change weekly in football polls, but their academic reputations are very sticky. Although US News sells plenty of magazines by juggling their rankings every year, in reality meaningful reputation changes take years, if not decades. This means that a school’s competitors don’t change often. Harvard, Yale, and Princeton continue to compete at the top of the heap, with few worries that Rutgers or Alabama will suddenly become the fourth player in a competitive quartet. Similarly, the community colleges who compete in Cleveland continue to concern themselves with each other, not with Columbia University or even Case Western.

These and other barriers means that a rough equilibrium exists, and most schools can fill their classes every year. With these barriers, it would seem that there will be few big shifts in the competitive landscape. Still, just about all colleges heavily market themselves to find students who fit their needs. They may want applicants who are academically qualified, who can pay full tuition, who have special athletic or musical abilities, and so on. Without such marketing efforts, the quality and fit of their applicants would fall. (And, there can be a spiral effect – if the stats of admitted applicants fall, a school’s ranking and reputation will fall, making it even more difficult to recruit the most qualified students.) Among less selective colleges, some schools must market heavily simply to fill their seats.

The Competitor from Hell

Here’s a hypothetical scenario… You are the president of a college serving primarily a local/regional market. Your competitors are a nearby branch of the state university system, a few community colleges, and a college with a religious affiliation. You have achieved a competitive balance and are attracting, with some effort and at considerable expense, a reasonable mix of incoming students. Harvard is the last school you’d think of as a competitor. They are far away, they are expensive, and you know that none of your applicants would have any chance of being admitted there anyway.

But what if Harvard opened up a branch campus down the street from you? What if they made their tuition cheaper than yours? What if they admitted not just ultra-high achievers, but every applicant who was capable of doing college-level work? Would you lose students? Of course you would.

The good news is that Harvard isn’t going to be opening up that branch campus. The bad news is that as more higher education moves online, many of the traditional barriers to competition will be blown away. Even if the competition doesn’t come from Harvard, it will come from someone.

In the online world, far less infrastructure is needed to deliver a college course. No lush campus, no classroom buildings, no cafeteria, no dormitories, and so on. Faculty requirements are lower. Ultimately, the class can be delivered anywhere in the country (or world) at far lower cost than in person. In the absence of the constraints of a physical campus and the negative net revenue associated with adding students, a selective college could choose to accept online students with less stellar credentials. After all, now every student added makes money instead of losing money.

So, for our hypothetical local/regional college, we now have not one, but perhaps many, fearsome competitors: national brand name schools offering coursework and degrees at low cost and with liberal enrollment policies.

While this may be a scary scenario, that day isn’t yet upon us. Schools with major brand names will be reluctant to devalue that brand by opening up enrollment or cutting cost dramatically. Most students will still want the traditional campus experience and in-person contact with fellow students and faculty.

Wholesale migration to online degrees isn’t going to happen next year, or the year after. Nevertheless, there is already movement in this direction, and even a modest decrease in the percentage of traditional on-campus students will combine with the looming baby-bust decline in high school graduates to put some colleges under pressure. The schools that are barely filling their classes now will succumb to the dual trends of online competition and a declining total applicant pool.

How does a college or university prepare for this? One answer is strengthening its own brand. A college that has set itself apart from its competition will have greater success in a more competitive recruiting environment, and be in a better position to compete online as well. The schools that will fold will be those who have failed to create a unique brand and instead have relied on geography, cost, and/or easy admission as their competitive weapons.

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