The process of applying to colleges and getting accepted to them is a big business and schools of higher learning are raking in the income. The average private college tuition in the US is $27,000 a year plus room and meals of $12,000 a year. Over four years, it is more than the average family pays for their home in many parts of the country.
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So, what can small business owners learn from this?
1. People buy when they are in pain
What could be a bigger pain to solve for all parents than wanting to see their child happy and attend the college of their choice? Even during recessionary times, colleges have raised tuition prices an average of 8 percent every year even when overall inflation was much lower. Tuition has increased 1000 percent over the last 30 years. In contrast, health insurance is only up by 600 percent.
Lesson: Find a huge pain that your customers have and they will pay almost anything to solve it.
2. Have a business partner
The biggest business partner that the colleges have is the U.S. government which lends over $31K per student as part of a federal loan package. As tuition rises sod does the amount you can borrow. Although it is difficult to get a mortgage right now, parents can typically privately borrow up to the amount of tuition because it is the one debt that is not forgivable by bankruptcy.
Lesson: Having a business partner that can help fund the customer’s pain will make the transaction much more likely to happen.
3. Give well known references.
Colleges always brag about their famous alumni and the success they achieved after they attended that school—even if the alumni became successful or famous 40 years after graduation.
Lesson: All businesses need to attach themselves to successful brands that they have as customers. If you have notable customer references, use them prominently in your marketing material.
4. Learn to tell a good story
Every college paints a picture for parents and students of what it will be like to attend their school. They talk about how much they will learn and how much fun it will be.
Lesson: In your business, tell prospects how good it will be once you solve their pain. Remember, people still buy dreams.
5. Know where the profit is
Schools especially push living on campus and using their meal plan. This is because these two areas are some of the most profitable parts of their college operations.
Lesson: For your business, understand where your profit is and sell those products or services.
6. Address the objection up front
For colleges, it's the outrageous cost of attending. Admission officers discuss “their generous aid packages” before the student applies.
Lesson: In business, address the obvious objection to buying your product up front and do not wait for the prospect to bring it up.
7. No live demonstrations
Most schools show parents “sample” dorm rooms. Only one college actually risked showing a “in use’ room.
Lesson: Avoid live demos that do not have predictable results in your business. The risk is too high for things to go wrong and ruin the sale.
8. Stay in touch
My son never received more calls or mail in our home than during college recruiting (the fall) to acceptance season (the spring).
Lesson: In business, marketing to your top prospects is an all the time and every week activity.
9. Everyone and everything reflects your brand.
Every experience a prospective student or parent has at the school shapes their impression of that college.
Lesson: With every prospect or customer interaction, your business is either building your brand or detracting from it.
10. Have an iPhone app
Every college has one.
Lesson: Ensure that your customer can consume your product or service in some way while mobile. Increasingly, less consumption is happening on their computer screen and more on their mobile phone.