Effects of Marketing Theories and Customer Relationship Management

Effects of Marketing Theories and Customer Relationship Management on Small Colleges Melissa M. Hopper-Ford, D.B.A., Ph.D. Research Presentation October 21/22, 2021 1

Agenda Motivation for Study Conceptual Framework and Significance Research Questions and Propositions Literature Review Methodology Findings and Conclusions Practical Implications Recommendations for Future Research 2

Motivation for Study Inspiration: Closing of Gibbs College Division, where I was employed as a Professor of Business What are the major threats to small colleges? What steps can small college marketing departments take to prevent closures? What role can technology play in improving marketing at small colleges? 3

Theoretical Framework Internet Marketing Theory Efficiency of internet-based marketing, mostly drawing from business settings and examples. (Peterson, Balasubramanian, & Sonnenberg, 1997). Social Networking Theory Consumer behavior (student decision- making) impacted by with social media and specific networking sites, the most well-known being Facebook and Twitter. (Lu & Hsaio, 2010). 4

Theoretical Framework Enrollment Management/Marketing Theory Marketing and Marketing Management merged to improve recruiting and enrollment practices through marketing options, including designated contact personnel for recruits (Vander Schee, 2010). Structured Enrollment Management/Marketing Theory Enrollment Management/Marketing theory, with emphasis upon the whole spectrum of college or university planning involving increasin enrollment and by advertising and marketing. (Vander Schee, 2015; Wilkinson, Taylor, Peterson, & Machado-Taylor, 2007). CRM-supported Internet Marketing Theory. Consumer Relationship Management improves marketing/increases efficiency through use of software and automated marketing tools (Tileaga, Nitu & Nitu, 2013). 5

Problem and Significance Small colleges face a financial threat, due to declining enrollment and reduced tuition intake necessary for them to meet operating costs. The specific problem addressed herein is to measure the effects of various marketing options on enrollment for these schools, and to assess the impact of automated marketing aids such as CRM on increased marketing efficiency. If this study were not completed, the potential exists for closure of even more small colleges as the gap between tuition revenues and necessary operating expenses widens. 6

Research Questions Q1: What is the effect of marketing options on college selection? Q2: What are the effects of Consumer Relationship Management tools on college marketing efficiency? 7

Propositions Proposition 1: Internet marketing options positively affect college selection. Proposition 2: Social media use positively affects college selection. Proposition 3: Staff contacts with prospective students positively affect college selection by students, which increases enrollment. Proposition 4: Use of Consumer Relationship Management (CRM) positively affects college marketing efficiency. 8

Literature Review Economic Threat to Small Colleges College Development David Jordan, who founder of Stanford University predicted that with time ‘the college will disappear” the best will become universities the others will return as academies or “advanced-level secondary schools’” (Oakley, 2005, p. 2). Small Colleges Throughout History In the mid 1950s, liberal arts colleges were 40% of the total number of institutions of higher education, enrolled 25 % of all undergraduates In the early 1970s, liberal arts colleges accounted for a quarter of all institutions enrolled no more than 8% of all students the loss continued over many decades Between 1967 and 1990,167 private four year colleges have disappeared (Oakley, 2005, pg. 5). 9

Literature Review Economic Threat to Small Colleges College Selection (What led to the collapse?) declining enrollments vanishing state funding challenges with day-to-day finances and cash flow poor-quality athletic programs rapid turnover in leadership With all these considerations, and with the recognition that there is no easy answer, the question remains of why some rural colleges survive, and even prosper, while others collapse (Mills, 2014). Marketing Options Smaller institutions need to set themselves apart schools with more students such as vocational institutions/trade schools the military, or entering the job market immediately without continued education (Mills, 2014). 10

Literature Review Economic Threat to Small Colleges Theories using Marketing to Impact Post-Secondary Choice by Students Internet-based Marketing: Highest demographic base is collegebound age group (Hajli, 2014). Social Media-based Marketing: Free word-of-mouth from exposure and reviews (Lu & Hsiang, 2010). Contacts-based Marketing: Personal touch creates connection with college (Vander Schee, 2017). Marketing Impacts on College Selection: Increased enrollment; increased tuition; less threat of closing (Mills, 2014). 11

Literature Review Economic Threat to Small Colleges Consumer Relationship Marketing CRM Tools Used with Internet Marketing: Increase speed of response ease of storage of contacts ease of retrieval continued follow-up and nurturing of leads This frees people for personal contacts or working on other marketing strategies (Tileagu, Nitu & Nitu, 2014). 12

Design, Procedure, and Sample Design Qualitative research transcendental phenomenology to remove researcher bias (Husserl, 1931; Tillman, 1967) blended with thematic analysis (Creswell, 2014) Procedure Interviews current and former small college employees Questionnaires current small college students Data collected then bracketed Clustered by prevalence of answers Analyzed in connection with propositions Sample Sample groups- criteria for selection into the sample was affiliation with a small college ten interviewees- administrative or other employees of the Gibbs division 286 students number selected for the study conforms to a sufficient size interview pool per Polkinghorne (2013). 13

Findings Internet Use All ten interviewees (current or former college employees) stated internet marketing is or was used at their respective schools. School that closed in 2009 only had a website. Current respondents indicate varied interactive internet options are available that they believe are the best marketing tools for their schools. Students and faculty were unanimous that today the Internet is the best source of marketing information about colleges. Unexpected finding: Personal contact is more important in college marketing than social media: Interviewee: “Social media is very effective if used properly, but that it needs to be user friendly. College nights are more effective than social media!” Students: “Word-of-Mouth and Personal Contacts more effective than Social Media in swaying enrollment decision!” 14

Findings Other Factors (rated 1-5, 5 highest) Cost or aid available, with a rating average of Location, averaging 4.13, followed by Opportunities for study at 3.73. School quality, averaging a score of 3.44 School or class size at 3.41 Influence of friends/relatives/peers at 2.60. 4.36. Unexpected finding: Both schools and students consider costs/tuition as essential in marketing and decision-making! 15

Findings CRM Enhances Marketing Marketing Factors enhanced by CRM quick response time personal follow-up accuracy of information received Unexpected finding: Everyone supported CRM. Interviewees: “We all used CRM.” Students: “Quick response time essential!” (enhanced by CRM). 16

Conclusions MOST EFFECTIVE AID TO MARKETING Internet marketing options positively affect college selection. SECOND MOST EFFECTIVE AID TO MARKETING Staff contacts with prospective students positively affect college selection by students, which increases enrollment. THIRD MOST EFFECTIVE AID TO MARKETING Social media use positively affects college selection. 100% AGREEMENT Use of Consumer Relationship Management (CRM) positively affects college marketing efficiency. 17

Practical Implications Q1: What is the effect of marketing options on college selection? Marketing options affect college selection to varying degrees, with internet marketing being the most effective, followed by word of mouth and social media, and that staff contact has a positive impact on student choice to enroll. Q2: What are the effects of Consumer Relationship Management tools on college marketing efficiency? CRM tools enhance college marketing by improving speed of response, ease of record-keeping, and allowing staff to devote more time to personal contact as opposed to mundane data gathering, storage and retrieval. 18

Research Recommendations Marketing Option Recommendations Colleges should focus heavily on internet marketing. Websites designed targeting students who live close to the schools and are interested in affordable education appear optimal, according to the responses of the subjects of this study. Although social media has much impact on today’s youth, word-of-mouth and personal contact ranked higher in effectiveness according to the study. Therefore, pre-admissions contact personnel from throughout the college should be designated to give close attention to prospective students. CRM Recommendations If small colleges have not invested in CRM, they should do so. This software not only allows fast response time to online inquiries, vital in this media-saturated age; it also efficiently records and stores data on leads that college personnel can then check out more thoroughly, due to time saved doing repetitive tasks. 19

Epilogue This study verified the MY belief that internet-focused marketing would be effective. What was surprising was the lower results accorded to social media, compared to searches via search engines, websites, word of mouth, and personal contact. This research has revealed the potential over-emphasis on social media, at the expense of personal contact, which it shows to be highly effective. Indeed, this work can be a stepping stone for further studies at schools in different geographical areas and with larger student bodies which may or may not reach the same results. Nonetheless, it points out viable directions for small college marketing in an age where competition for students is fierce. Knowledge is power, and this study presents surprising information regarding effective marketing theories and CRM use at small colleges in the internet era. 20

Thank You! Questions and Comments 21