A new survey by Oracle of 300 C-level executives, including many at universities, revealed that today’s consumers want service that is all about them personally.
Appropriately titled “Era I,” the Oracle survey also suggests that colleges and universities may pay a steep financial price for failing to provide this up-close and personal digital experience for their students. “Higher education respondents estimated a 19 percent revenue gain for institutions that provide a highly individualized experience to their constituents,” said Keith Rajecki, Oracle’s senior director of industry business solutions for global education and research.
While Rajecki is quick to point out that higher education doesn’t share the same kind of baseline revenue goals as companies, he noted that universities are nevertheless under tremendous pressure to control costs. “We’re not out of the woods yet on the cost-of-education challenges,” he said. “It’s a key factor that will help drive university presidents and CFOs to focus more on personalizing the student experience.”
Perhaps nowhere are the financial stakes more quantifiable than in the area of student retention.
According to Rajecki, a lot of higher ed institutions calculate the cost of recruiting and enrolling each student at more than $1,000, a number that doesn’t include the loss of revenue from students who subsequently drop out.
“If a school can increase retention by four percent, that could be tens to hundreds of thousands of dollars per semester, depending on the number of students,” he said, noting that personalized interaction is often key to retaining at-risk students. “At the moment, millions of dollars annually are being lost for institutions.”
Even so, the survey suggest that few schools have invested in the kind of highly personalized campus experience that these C-level executives feel is needed. While 73 percent of respondents said that the trend toward a highly individualized student experience “is a growing challenge to their ability to compete effectively,” only seven percent graded their school’s efforts in this area as an “A.” Indeed, more than half—57 percent—gave their schools a “C.”
And while university administrators have long recognized the financial upside of personalized retention programs part of campus services, only 50 percent of respondents listed predictive analytics as one of the biggest individualization opportunities at their schools.
Why the disconnect? In some cases, schools may simply be overwhelmed by the challenge of scrubbing their data sets and of developing algorithms to interpret that data. In other cases, schools are struggling to identify the solutions that can resolve the problems highlighted by the data.
Higher ed survey respondents were far more likely to zero in on the personalization opportunities afforded by mobile apps (63 percent) than on predictive analytics (50 percent). “I can’t think of an institution that doesn’t have a mobile strategy, but mobile apps are really not as individualized as students desire,” said Rajecki of the typical campus offerings. “What students really want is a mobile app that provides them with just-in-time notifications and alerts for actions they need to take.”
Multiple factors, including security concerns (47 percent of respondents), contribute to the slow adoption of personalized services for students, according to the survey. Another is the drag created by legacy systems, identified by 57 percent of survey respondents overall. “We’re at an inflection point where a lot of institutions are deciding whether to upgrade their current systems or move to the cloud,” said Rajecki. “When you think about when many of these applications were developed, mobile didn’t exist, social media didn’t exist—and analytics didn’t resemble what they do today.”
Given the financial upside of creating a highly personalized student experience, it’s ironic that the biggest roadblock is budget concerns, cited by 63 percent of higher ed respondents. It’s not altogether surprising then that 97 percent of higher ed respondents believe cloud-based solutions, with their pay-as-you-go business model, are an important link in helping their institutions pursue this personalized experience.