NPS: The Most Important Metric Your Higher Education Competitors Aren’t Using

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For enrollment-challenged colleges and universities, it’s time to enlist the help of higher ed’s biggest promoters: alumni. The first step? Net Promoter Scoring. 

By now, we all know that higher education is facing a massive enrollment problem. Last fall alone, colleges lost 465,000 students. While there are numerous factors contributing to this decline, ultimately, they all come down to one overarching problem: Today’s students are increasingly questioning whether the value of a college degree outweighs the cost of obtaining it. 

In a climate rife with economic uncertainty, at a time when every single decision and challenge seems to be colored by the COVID-19 pandemic, how can universities prove to would-be students that the outcome — a degree — justifies the very expensive means? 

Corporate brands understood long ago the power of tracking, harnessing, and leveraging their biggest advocates: satisfied customers. Recognizing that potential, author and business strategist Frederick Reichheld in 2001 created the Net Promotor Score (NPS), a market research metric that’s typically gathered using a single-question survey: How likely are you to recommend this organization’s products or services?

First, let’s discuss why and how to use Net Promotor Scoring for colleges and universities

Before we get into why and how to use NPS in higher education, let’s start with a short explanation of what it is and what it consists of.  

Reichheld introduced the concept of the net promotor score in his groundbreaking paper, “The One Number You Need to Grow.” He believed that if an organization properly identified the most enthusiastic promoters within its client base, it could use those clients to support its marketing and sales endeavors and subsequently reduce new customer acquisition costs.  

As mentioned above, finding true promotors and calculating NPS requires simply asking, “How likely are you to recommend [your institution] to a friend or a colleague?” Respondents are asked to rank their likelihood on a scale of 0 to 10. Those who answer 9 or 10 are considered promoters. Those who respond with a 7 or 8 are considered passively satisfied. Finally, anyone who answers 6 or below is considered a detractor. The final net promotor score is calculated by subtracting the percentage of detractors from the percentage of promoters. So, if 10% of respondents are detractors, 20% are passives, and 70% are promoters, your NPS would be 60% (Qualtrics).  

Need to improve your alumni database? Read about tips and tricks to refresh your database and collect the information that’s most valuable.

In higher education, determining a target NPS is tricky

Of course, it’s not enough to know what your score is — you also need to know what it should be 

Technically, any score above zero is considered good, because it means you have more promoters than detractors. Among all industries combined, a score of 50+ is considered above average, and 70+ puts you among the best of the best. The highest possible score is 100, but achieving that is rare and, for most, nearly impossible. 

But determining what’s actually good is more complicated than that. Ultimately, what constitutes a good NPS is industry-specific. For department stores, the average is around 58. The average in the hotel industry is 39. And in the field of higher education, using our proprietary database of alumni surveys, we found the average NPS to be around 32.  

Higher education is an ideal candidate for NPS scoring. So, what’s the hold-up? 

While universities are well-versed in using alumni engagement to power their fundraising efforts, they’ve historically proven less committed to doing so in higher education their recruitment marketing. Indeed, in one survey of university CMOs, alumni engagement was one of the least-cited metrics used for gauging institutional marketing success—and, in the realm of higher education, NPS and alumni engagement are strongly related.  

While businesses have been embracing NPS scoring for years, it’s never fully taken hold in non-profit settings like academia. University marketing teams might have some awareness of this metric, but most institutions have yet to incorporate it into their greater business strategies. Some higher education stakeholders believe the NPS metric is too simplistic for their target markets. Some argue that the profit-oriented nature of NPS makes it untranslatable to nonprofit environments like academia. Others believe that college choice is too personal of a decision to be assessed against a metric that they believe lacks nuance.  

Yet NPS is exactly the kind of metric that could prove critical for colleges and universities looking to bolster their recruitment and marketing efforts — not to mention their potential for alumni fundraising. 

From the Ivy Leagues to the Big 10 to any number of comparatively tiny private institutions around the nation, college students are inundated with school pride mantras from the moment they step onto campus as freshmen to the time they walk across the stage to accept their diploma. More importantly, though, they have a personal stake in their university’s reputation and brand long after they graduate: It does, after all, play a large role in their own career marketability.  

Looking to build your institution’s capacity for research or data analysis to hit your goals? Contact Hanover Research to learn how we can support your needs. 

Half of your alumni could be promoters. But how do you find them?  

Over the past several years, Hanover created a unique dataset using alumni surveys of nearly 40,000 respondents. In these surveys, we ask participants a wide range of questions about their college experiences, their relationship to their universities, and their post-graduate experiences. Included in the survey is the same question used to figure out NPS: How likely are they to recommend the institution to others?  

So, what did we discover? According to our data, 53% of alumni are promotors, 26% are passively satisfied and 21% are detractors. Of course, it’s not enough to simply know how many promoters or detractors you have. The strength of any metric is rooted in your ability to act on it. Fully capitalizing on the potential of the NPS measurement requires going deeper by asking and answering questions such as:  

  • What factors are most likely to influence alumni to be promoters?  
  • What might cause others to be detractors? 
  • How can we apply these factors to our long-term enrollment and fundraising strategies? 

So, which factors are most likely to affect whether your alumni graduate to become promoters? In our research, we found 15 variables that have the largest impact on whether graduates go on to become promoters, with the top five being: 

  1. Reputation for academic quality 
  2. Institutional reputation 
  3. Overall experience 
  4. Campus atmosphere 
  5. Academic experience 
Reputation and quality of experience are the top predictors of an alumnus becoming a promoter.

Armed with this kind of data, institutions can determine where to concentrate their strategic efforts to not only ensure quality student experiences, but to produce alumni who will go on to support the institution post-graduation, whether through donations or by promoting it to prospective applicants. 

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Putting your NPS score to use to boost enrollment, raise funds, and more. 

As simple as the NPS may sound, it can reveal significant and actionable insights for universities in terms of their enrollment and fundraising endeavors. Moreover, it allows institutions to identify alumni who are active brand promotors. Those promoters can help their institution through three specific channels.  

  • First, promotors can directly supply funds to an institution through alumni donations. While this seems like something of a given, there’s more to it than simply targeting would-be donors. In Hanover’s surveys of alumni, we’ve learned that the most common driver for donors is a desire to give back. Yet those who donated in hopes of ensuring financial stability or providing access through financial aid were 15 percentage points more likely to become promoters. What does this mean for colleges and universities? By targeting donors based on their stated reasons for giving, institutions can identify alumni who are most likely to act as promoters and play a valuable role in their recruitment and marketing efforts.
     
  • Second, promoters can serve as ambassadors of their institutions and improve application quality as well as quantity. There’s a reason the University of Michigan publishes an online list of its most notable alumni: Name recognition wields incredible power. Highly ambitious prospective students apply to the universities they believe are most likely to ensure their success and help them realize their own dreams. The more successful your alumni, the more attractive your institution looks to potential applicants — especially those pursuing similar career paths to your greatest success stories.
     
  • Finally, promoters can improve student yield by influencing prospective students’ decision to enroll into a particular institution. When it comes to closing a sale, corporate brands learned long ago that the most effective implements in their toolbox are the success stories of their current and past customers. In one study by video marketing company Wyzowl, 9 out of 10 people said they trust what a customer has to say about a brand more than the brand itself. Meanwhile, 95% said that reviews directly influence their purchasing decisions. Incorporating alumni promoters (i.e., your past customers) adds authenticity and credibility to your recruitment efforts.“Students want inside information about industries and real-world resources. Alumni want to share their trajectory and offer advice,” Jodie Sperico, executive director of alumni engagement and the Adelphi Fund at Adelphi University told one online higher education news publication. “Whether through formal programming or intentional pairings, allow your alumni to serve as ambassadors and promote the institution in a way no professional staff or communications can.”  

The takeaway: It’s time for higher education to leverage the power of NPS

With talking heads increasingly predicting its demise and enrollment numbers on the decline, higher education is very much on a precipice.  

Realistically, of course, there will always be a need for higher education in some form. Still, if colleges and universities hope to overcome the ongoing enrollment decline, they must embrace new ways of demonstrating their worth to potential applicants who not only have a wealth of options from which to choose, but who might very well be questioning the value of a four-year degree.  

By incorporating NPS scoring into their recruitment marketing repertoire, colleges and universities provide themselves with a ready-made stable of ambassadors who can prove their alma mater’s merit not only through words, but through their own successes.  

Get more insights into engaging your alumni and driving enrollment. Visit Hanover’s Resources and Insights page.

— Anirban Ghosh, MS, MA, Managing Director, Content Initiatives, Hanover Research 

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