#1 There are plenty of qualified, full paying students out there: if only the admissions office would do a better job of recruiting them!
Nothing could be further from the truth. Fewer than ten percent of the families of students attending college can afford the average cost of a private college education. Many of these full-paying students will attend public institutions. Those who don't attend public institutions have a great many choices because every college is fighting to enroll a full-paying student. As a result, only the hundred or so most selective private institutions nationwide have a sizeable percentage of their enrollment paying the full bill. The vast majority of private institutions have virtually all of their students receiving some form of college-funded aid. This is not because they want to; it is because they have to in order to enroll a class.

#2 Need-based financial aid is a thing of the past, and private colleges can best meet their enrollment goals by strategically using merit aid.
While merit awards are an important element of most colleges' pricing strategies, the fact remains that colleges who do not take financial need into consideration will have a less productive aid program and will be far more likely to suffer from high attrition on cost and perceived value issues than institutions who do consider financial need. Many students simply will not be able to attend because they cannot come up with the difference between the amount of their merit award plus federal and state entitlements and the actual cost of attendance. Those who cannot make up this difference will have to make significant sacrifices. This creates a heightened concern about the value of the experience relative to the sacrifice it requires. Few institutions hold up well under this kind of scrutiny. Colleges that pay attention to need among middle-income students can significantly increase net tuition revenue by making certain that this need is being met.

#3 Using large merit awards to recruit bright students who can afford to pay is a good way for most colleges to increase academic quality.
It is both difficult and expensive to use merit awards to recruit bright students who can pay their way to college. If these awards are successful, they have a disproportionately negative impact on the discount rate and net tuition revenue. If they do not work, they are a wasted administrative exercise that significantly reduces the college's flexibility to use aid strategically to increase net tuition revenue. Quality, measured by the traditional measuring sticks of grades and test scores, can be increased by focusing resources on the middle and upper-middle of the applicant pool quality matrix. These students are more easily influenced with smaller amounts of money, so the average aid dollar per enrolled student is considerably less than it is with students at the top of the profile. A strategy that looks to increase the size of the middle of the class and reduce the number of weaker students at the bottom will result in a stronger and more homogeneous learning environment that has a lower aid cost per student.

GDAIS does reasonably priced, successful, aid leveraging strategies for private colleges. While we have designed award strategies to meet a wide variety of different goals, the GDAIS aid award matrix is typically designed to increase academic quality and net tuition revenue without significantly impacting the discount rate.

Much has been claimed in the last year or so about the effectiveness of e-communication and how the "old way" of communicating with students was successful for the last generation of prospective college students but not for this one. Our market research suggests that you might want to wait before discarding some of the methods of the past like snail mail, print publications and telephone calls. GDAIS interviews more than 20,000 high school seniors a year regarding the college search process. We asked the following question in several of the surveys and have now compiled the results.

I am going to read some ways that colleges may have contacted you.

Please indicate how effective each was as a way to contact you.

Was it very effective, effective, somewhat effective, or not effective?

If you have not been contacted in this particular way, please say that the item does not apply to you.

A personal letter mailed to your home

Very effective	26%
Effective	32%
Somewhat effective	29%
Not effective	12%
Does not apply	1%

An e-mail from an admissions person at the college

Very effective	18%
Effective	18%
Somewhat effective	34%
Not effective	21%
Does not apply	9%

A telephone call from an admissions person at the college

Very effective	29%
Effective	27%
Somewhat effective	22%
Not effective	13%
Does not apply	9%

A telephone call from a current student

Very effective	14%
Effective	32%
Somewhat effective	22%
Not effective	17%
Does not apply	15%

A viewbook or prospectus

Very effective	25%
Effective	32%
Somewhat effective	9%
Not effective	4%
Does not apply	8%

A course catalog

Very effective	32%
Effective	31%
Somewhat effective	30%
Not effective	5%
Does not apply	1%

The college's Web site

Very effective	27%
Effective	34%
Somewhat effective	33%
Not effective	6%
Does not apply

A videotape of the college

Very effective	14%
Effective	21%
Somewhat effective	18%
Not effective	19%
Does not apply	28%

We continue to be impressed with the importance of traditional letters, viewbooks, and most importantly, course catalogs. Colleges that are not making their catalog readily available to their prospects are making a mistake. There is no question that e-mail and the Web are becoming more and more important each year, but it seems clear that this generation of prospective students is not ready to give up the old standbys of communication. In other words, if you don't have a viewbook and/or a catalog that prospective students can leave on the family coffeetable as a ready reference, you're going to have trouble keeping at the top of their list.

It is very difficult to develop a completely accurate long-range pricing strategy in any industry, but it is particularly difficult in higher education. There are simply too many external factors affecting what an institution can charge; however, GDA Integrated Services has found some ways to remove as much risk as possible from this difficult decision.

Our approach is to examine the following three key aspects of a college or university: market position, public image, and healthy ambition. Through a review of the institution’s admissions and marketing data and a series of on-campus interviews, we are able to assess these aspects as they relate to a specific institution and make some pricing strategy recommendations.

Market Position
To determine market position and market demand we look for a variety of information including but not limited to:

Public Image
To determine an institution's public image, we consider the following issues, as well as any available market research that might shed light on their public image. The following is a sample of factors that relate to "public image.":

Healthy Ambition
"Healthy ambition" refers to colleges making the mistake of peer pricing because they believe prospective students and their families perceive a higher price as indicative of higher quality or prestige. While this may have been true in the 1980s, it no longer is the case. Students and parents are more savvy consumers and are better able to assess quality for themselves, independently of price. For pricing and marketing reasons, "healthy ambition" must be judged on how the increased revenue will supplement the institution's educational reputation, market position, and/or public image.

To determine the "healthy ambition" of a college in terms of a tuition increase, we test the projected outcome of the price increase with the accuracy of these assumptions. Here is a sample:

This price increase will:

It is important to remember that few if any of these are the direct beneficiaries of a typical tuition increase situation. Instead, increasing tuition frequently leads to increased discount rates for financial aid which result in less revenue for the elements that will actually improve the quality of the education. In other words, tuition increases can be counterproductive.

While an analysis of this type has elements of both art and science, it can help an institution understand the likely impact of a significant price increase. In the absence of an improved market position, increased visibility, and an opportunity to demonstrate that the price increase will enhance the quality of the experience, it makes sense to tread carefully with a price increase that exceeds the national rate of inflation.

GDA Integrated Services is a market research, consulting, and services firm that specializes in customized, integrated marketing solutions that help colleges and universities compete successfully for students, funding, and visibility in the twenty-first century.