Monday, May 28, 2012

Customer Value Proposition for America’s Colleges and Universities


The New York Times online recently released a two-part series entitled “Degrees of Debt”, which analyses the rise in student debt and how colleges are confronting their costs. The article “Slowly, as Student Debt Rises, Colleges Confront Costs”, hits close to home for me as an Assistant Director of Admission for Carnegie Mellon University’s Undergraduate Office of Admission. Simply raising tuition and fees is not enough. Gordon Gee, President of Ohio State University has come out and said, “The notion that universities can do business the very same way has to stop. Public colleges and universities need to devise a new business model to pay for the costs of education.” I agree with President Gee even working for the private nonprofit CMU. Today’s economy has led students’ and their families to be even more price sensitive regarding tuition hikes and services provided. They ask pointed questions nowadays like what should the return investment look like for my son or daughter?

Lawrence T. Lesick, VP of Enrollment Management at Ohio Northern couldn’t have said it better stating, “the current model is not sustainable long-term.” To remain competitive and maintain their national rankings colleges and universities are going to have to show Customer Value Proposition (CVP) to consumers.     

In the reading “Reinventing your Business Model” by Johnson, Christenson, and Kagermann, we learn the most important value to get right is the CVP. In this case, the job that needs a solution is the rise in college tuition leading to ever-increasing student debt. In reference to the Business Model definition, each of the three other interlocking elements including the CVP creates value for the customer. The CVP and profit formula define the value for the customer and the company while the key resources and key processes highlight how the services below will be delivered. 

Profit Formula
Tuition, room and board, colleges strategic plan

Key Resources
Faculty, staff, academic programs, student dormitories, wireless internet, student unions, climbing walls…

Key Processes
Planning, budgeting, sales, service, company’s mission…

By redefining their CVP will colleges still be able to justify tuition increases when state and federal monies are decreasing?  Is education, like the article says, intrinsically expensive therefore student debt is inevitable?    

“A Generation Hobbled by the Soaring Cost of College”


“Slowly, as Student Debt Rises, Colleges Confront Costs”

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