Value Propositions in Higher Ed

Just picked up a really good read called Business Model Generation, by Alexander Osterwalder and Yves Pigneur. Readers are given 9 basic building blocks that show the logic of how companies plan to make money. One of these building blocks is “Value Propositions.”

“The Value Propositions Building block describes the bundle of products and services that create value for a specific Customer Segment.”

You’re probably wondering (from the title of this entry) how I could possibly connect this portion of the reading to Higher Education. I’ve been working in higher ed for years now, as you know. Although it’s not common practice, it makes complete sense to refer to current or prospective college students as “customers.” They are, after all, buying a service from a college or university with the expectation that they will receive a return on their investment. Take a look at 2 of my favorite value propositions from the reading, that I’ve listed below. I’ll connect these to the value students perceive when choosing or committing to a university:

Customization

Students are more interested than ever, in taking more control over their educational experience. As a result, they are looking to colleges and universities that allow them to create a unique experience for themselves over the course of 4 years. Colleges meet these needs by offering flexibility in general education courses, accelerated programs, study abroad learning, independent studies and co-ops, and many other ways to customize their experience. Customization gives students a feeling of empowerment, as they are more satisfied with a good or service that is created especially for their needs.

Cost Reduction

There are nearly 4,000 colleges and universities in the country, all offering different variations to one ultimate service: educating and equipping young adults for the workforce. Many colleges compete amongst each other using messaging to convince students and their parents that they provide a greater value, or return on a student’s investment (tuition dollars). Additionally, colleges and universities offer significant scholarships to potential students, which is an important factor in a student’s decision to commit to a college. As the number of qualified, high school graduates steadily decreases across the country, colleges are competing fiercely to compete during a shortage of prospective students. In order to keep afloat, colleges must increase their scholarship offerings to combat increasing costs of tuition.

Your turn. Take a look at your industry or company, and examine the over-arching business model or “canvas” that has been established.