Putting the Customer First

In a series of posts on our Sustaining Higher Education blog, we have been exploring how colleges and universities can transform their strategic planning process by thinking of their students—and others who are considering or engaged in the institution’s offerings—as customers. The benefits of this approach include:

• Focusing the institution’s attention more on its customers than on what its competitors are doing: Does our product meet the needs of our traditional customers? Is the potential pool of these customers shrinking?  How can we best increase our market share of our traditional pool of customers?  Are we priced too high? Do we need to pursue a new pool of customers with different products that fulfill their needs?
• Asking new sets of questions that produce new levels of understanding: Do we know what our customers want from our institution? Are we using the right metrics to gauge how effectively we are meeting their needs? Who do we want our customers to be in the future, and how will we need to change to meet their needs? Do we have the right data or information to answer these questions?
• Evaluating how the customer experience the institution provides compares to the experience its customers have come to expect—not only in comparison with other higher education institutions, but with companies in other industries that are setting the bar for customer experience

A customer-centric focus has other implications for higher education: If students are customers, colleges and universities are at some level retailers, and can discover new opportunities and new strategies by taking a retail-based approach to higher education, including strategies to build the institution’s customer equity and keep its brand relevant to its customer.

The trustee’s role in fostering a customer-centric approach

One of the most important roles college and university trustees play is helping senior administrators set the institution’s strategic plan. While it is not the role of trustees to get involved in the details and implementation of a strategic plan, it is very much their role to ask questions that can shape the strategic plan’s focus. Trustees can help foster a customer-centric approach to strategic planning by thinking deeply about two simple questions: “Who are our customers?” and “Who do we want our customers to be?”

Discussion of the first question—who are our customers? — helps trustees and administrators define the institution’s current state. At most institutions, this question should generate multiple answers. Prospects are potential new customers, for example, while enrolled students are current customers. Alumni can be past customers, current customers (if they have remained involved with the institution), or future customers (if the institution hopes to reengage them). Depending on program offerings, further segmentation might be helpful. How do customers for an online program, for example, differ from customers for a residential program? How do customers for graduate or professional programs differ from those in undergraduate programs? All of this leads to the most important question of all: Why do customers in these various segments choose—or choose not—to engage with our institution?

It is the role of administrators to seek answers to these questions, and for trustees to keep asking questions until all are satisfied that they understand who the institution’s customers are today, and how effectively the institution is meeting the expectations and needs of these customers. This information should also indicate where the institution succeeds and where it struggles in engaging its customers. And this information, in turn, begins to inform the answer to the next question: Who do we want our customers to be?

The answer to this question will set the direction of the strategic plan. Is the institution seeing success in engaging customers in areas where it sees opportunities for future growth? If not, it may need to devote resources to develop new offerings that will appeal to new customer segments, even as it maintains the success of current programs. Is the institution lagging with customer segments that it views as critical to its future success? If so, it must focus its attention on how it can better meet the needs of these customers. Is it devoting resources in pursuit of customer segments that could be better spent pursuing customers of greater importance to the institution’s future? In this case, the institution may need to look at restructuring departments and course offerings.

Trustees may encounter some initial resistance to these questions. The not-for-profit mission of most higher education institutions distinguishes them from for-profit retailers, but it does not separate them from the reality that they are selling things—a residential experience, course offerings, degrees and other credentials, athletic and cultural events—to customers who have many choices. Higher education customers—particularly its students—are also unique, but they are spending significant sums and working hard to get the most value from their experience. If anything, this should increase the pressure on colleges and universities to provide the best customer experience to its students in return for their investments and efforts.

By insisting on the need to put the customers first, trustees can play a significant role in ensuring the long-term sustainability and success of the institutions they serve.

Charles Kim is the Managing Director and Higher Education Practice Leader for Kaufman, Hall & Associates, LLC.