July 28th, 2016
Once again, we find ourselves in very challenging times for intensive English language programs in the US. These enrollment valleys occur once every ten years or so. One can cite a variety of reasons for the declining enrollments; however, the primary one is the decline in Saudi Arabian scholarship students. Other factors at play are the dollar, the “Trump card,” the Brazilian scholar program, the lousy world economy, more world competition (e.g. English in Malaysia), and some might even include “global warming” on their list of causes. But the primary cause of the situation we’re in today, the Saudi student decline, was certainly predictable. It was not a matter of “if,” but “when.”Along with the tremendous influx of Saudi students since 2005 came more IEP school openings. IEPs barely had to lift a finger to fill their seats thanks to the Kingdom of Saudi Arabia. There was really no reason to allocate resources to prime the pump of other potentially lucrative future international student markets. I am sure a few of the IEPs continued to cast their sales net far and wide and were able to groom some potentially new emerging markets; however, I suspect most did not. Life was good, so why make the effort?
Not the first IEP enrollment crisis, not the last
These major “market disruptors” such as the Saudi student decline occur about every decade for IEPs. For other examples, we can look back to the oil crisis of 1974, the huge Venezuelan scholarship program of the mid 1970s that saw a sudden end, and the Iranian take over of the American Embassy in 1979, as well as the 1997 Asian financial crisis and 9/11. In addition to these major market disruptors, there were minor ones such as periodic foreign government fiscal controls on travel abroad, major currency devaluations (or stronger dollar), Europeans no longer able to quit their jobs to study abroad and easily return home to better jobs (Switzerland in particular), and military conflicts, just to name a few.
So, here we are in this mess today with declining enrollments, instructors being laid off, administrators being placed in classrooms, program levels being combined (out of financial necessity), and IEPs closing (more by the end of the 2016). And then there is the possible impact on international education if Donald Trump becomes our next president, or a disruptor of some sort occurring in the People’s Republic of China, either of which would bring further hardship to IEPs.
How to survive the Saudi slump
There are few short-term solutions to getting us out of this mess. If the student numbers do not turn around soon, there will be an increasing number of IEP closures resulting in fewer IEPs, providing some enrollment growth among the remaining IEPs. Yes—you are all competing in the same markets for the same students with few exceptions. You are all friends, but you are also friendly competitors.
Those IEPs that are able to survive the carnage will be those that are best able to manage their expenses throughout this period. That is how they will survive. I say this because developing new markets is costly, time consuming and requires skill sets that might no longer be available at the IEPs. This is especially true since those IEPs that do survive into the fall of 2016 will have eliminated many administrative positions.
A common marketing mistake of many college/university IEPs is that they look to the “big name” schools to set the standards for recruitment. “Big name” schools do not require the same aggressive marketing efforts as those IEPs on lesser known campuses. So, if you are one of the “small name” schools, you need to be very creative and very aggressive in the ways you market your IEP program. You have to put the students first. For instance, if you have a program schedule designed to meet the schedule of your college/university instead of a schedule most convenient for your prospective students, well, need I say more?
Recruiting: an ongoing project
IEPs may sometimes forget that the sales effort does not end with receiving a student application. Special efforts need to be put forth to ensure that the student applicant will actually arrive and enroll for classes. And the sales effort continues. As you know, the student can easily pick up and transfer to another IEP if he or she becomes unhappy with yours. Regular blind student surveys will certainly go a long way to help you identify and rectify reasons behind unhappy student customers. When I think of the IEP program, I think in terms of 24/7. IEPs which do not accept 24/7 responsibility will be those programs which lose students to the IEPs which do think in 24/7 terms.
The surviving IEPs will be those that are customer centric and have carefully studied market conditions resulting in knowledge that will help them finely tune their sales efforts. They will need to be able to identify new potential markets utilizing recent US government visa statistics that are not readily available to the general public. Using student statistics such as those found in Open Doors can easily lead you astray. You need to know where the student activity is today, not where it was one or two years ago. A shotgun sales method will not yield the results you are looking for. Also, if you are not working with very qualified and carefully screened productive agents in key countries around the world, you will have great difficulty recovering from this downturn.
So, do your homework, target your promotion, keep your expenses in line with your revenue, work with good referral agents with whom you communicate by Skype once a month, and you will be around when the dust finally settles. And, yes, it will settle as new markets and new opportunities begin to appear on your radar.
See this article as it originally appeared on iTEP Chairman Perry Akins’ LinkedIn page. Follow iTEP on LinkedIn.