Feb 26, 2012

When Good is Good Enough

What can you do when good is good enough for the consumer?  In other words, what do you do when you are a high quality-high cost provider of education battling in a marketplace where “excellent” is not the brand attribute desired by most families or students?  I have been thinking about this question a lot lately as I think it is at the heart of the challenges faced by many high quality, independent colleges, universities, and schools across the nation.

It strikes me that, since the economic recorrection, more schools and colleges are struggling with their value proposition.  This gets manifested in many ways, but primarily through lagging enrollment or demand, or higher discount rates.  Let’s be clear here.  It is not that the marketplace of potential customers does not believe they are a good school.  Rather, it might be just be that the marketplace does not think that an “excellent” choice is needed, but that “good” is good enough.  

This is akin to the philosophy of buying a car.  While many consumers might really like the high end performance, safety, and luxury of a Mercedes, they don’t need it.  What they do need is a smaller portion of those brand attributes in a lesser cost option.  So, they choose Honda or Toyota.  The result is that their purchase delivers “good” rather than “great”.  

Many of the outstanding, high quality, high cost independent schools and colleges are fiercely working in this same battle.  I think the mistake they are making is trying to change the consumer mindset.  It is very difficult – nearly impossible – to move a consumer choice from “good” to “great” if “good” is all they really desire.  “Good” will get them into a strong college or a solid job after graduation, without super-high debt loads.  Good enough wins.

Maybe the real strategy challenge is to stop trying to change the mindsets of consumers that they must purchase “great” or “excellent” and focus only on those families and students who really desire those attributes.  The question then remains whether we have over-built our capacity beyond the number of viable consumers for our “great” product.  What do you think?  How is your school or college working through this dilemma?