Measuring ROI is not always a good ROI

Why ROI doesn't always work.

I am going to take a stance that may not be too popular: ROI is highly overrated.

It is not that I don't believe in ROI, it is just that it does not always express what we believe it expresses.

Recently, I attended a college fair at a local school. There were colleges from all over the country in attendance. I watched as thousands of students traveled from booth to booth picking up papers, patiently waiting to speak with reps, and looking for their favorite colleges. As I watched, I couldn't help but think that all those poor reps had traveled so far just to be jammed into a space no bigger than an airplane seat to be surrounded by both students and other reps. Not only couldn't you move, you could barely hear. A quick bit of math and it was apparent that between travel, the cost of a hotel, food, the fair itself, and the salary of the rep, your typical college in attendance spent somewhere between 2-4 thousand dollars to meet the students who made it to their booth, many of whom they could not even speak with. Clearly, the ROI here was abysmal. Yet, the reps came.

Another striking characteristic of this fair was who wasn't in attendance. Not a single Ivy League school or highly ranked college attended. What can be concluded from their absence? That spending money on brochures and other traditional means of outreach has a better ROI? Or is it that they really don't need to recruit given that students will apply to their schools no matter what.

Part of ROI is based on the ability to measure things. On a website that is a bit easier since clicks can tell you where someone visited. But what about things like ads in a newspaper or on the side of a bus for that matter? Not everything is easily measured yet ads still persist. Even if you try and poll students on where they heard about your school, you will not get an accurate answer since in most cases, their information came from multiple sources. So much for measuring ROI.

A similar situation can be found when looking at a college's website. I recently read an interesting and well written article by Kyle James from .eduguru. He made the case that measuring metrics from a website is critical to understanding how best to reach students. In order to get students to enroll, you must first get them to notice you. In terms of websites, they refer to it as SEO. While this may seem logical, it does not always apply either.

Most college websites are set up to serve a wide array of people ranging from prospective students to alumni. Because of this, tracking who goes where is often difficult. While you can see how many people downloaded a document or viewed a virtual tour, you cannot be sure it was even a student who did it. Even if it was, making that personal connection with him or her remains elusive. In truth, the only metric that really matters is the one that results in a personal contact. If a college can get that student to visit or speak with a rep face to face, then getting them to apply and enroll becomes that much easier. Now you understand why all those reps were jammed into that tiny school...ROI not withstanding.

Another area where ROI will factor in is with on-line virtual fairs. What is the value of a student that attends a virtual fair? More importantly, what is the ROI for the college that attends a virtual fair when there is no assurance that any of the students attending are interested in your school? Is it prudent to spend money, often thousands of dollars, for a maybe?

Recently, MoreThanGrades.com launched our virtual on-line fair that incorporates a live chat feature. One of our major concerns was addressing the ROI for this type of event, which is why our policy is run our fairs at no cost to the colleges attending one of our fairs. Our aim is to put colleges together with those students interested in them. By not charging colleges an upfront fee, we have taken the guess work out of the ROI by having students indicate before hand the colleges they are interested in. We then providing colleges with an opportunity to speak live with students and then provide follow up offline. Imagine if a college could go to a regular college fair with a list of students waiting to speak with them. A list of students provided to them without investing any resources. What would that ROI be worth? On this point, Mr. James and I agree: the end goal of all resources invested in recruitment is to get the student to apply. But all the technology in the world will never replace the face to face contact the admission department has with a student. The ROI for that -priceless.

Mike