Capturing Alternative Revenues

Strategic Lessons and Compendium of Tactics for Increasing Nontraditional Operating Revenue

Topics: Administration and Finance, Transportation and Parking, Auxiliary Enterprises, Space Utilization, Facilities and Operations, Revenue Enhancement, Alternative Revenues

Imperative #2: Bundle Episodic Services into Memberships and Turnkey Packages

Increasing the Returns from Enrichment Learning

Building Larger, Continuing Relationships with Senior Citizens

The goal of imperative #2 is for colleges and universities to bundle existing services to create more attractive product offerings, longer-term customer relationships, and hopefully opportunities for premium pricing.

A handful of institutions have successfully applied this imperative to the growing business of senior or retiree enrichment learning. Course audit fees are a relatively common example. Colleges and universities invite retirees to audit existing courses for a small percentage of tuition. This practice produces modest revenue with no additional costs, and also cultivates potential donors.

However, select institutions have dramatically increased revenues by bundling enrichment learning with social and leisure offerings. Examples include group weekend excursions built around faculty-taught seminars and membership programs combining lectures, concerts, and golf outings. Most aggressively, university retirement communities generate millions in revenue and have grown quickly, from almost none 20 years ago to more than 50 nationwide today.

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A Turnkey Home Schooling Solution

Texas Tech University’s Online K-12 Program

Texas Tech University has successfully applied the second imperative by creating a one-stop home school resource, bundling online K-12 courses with e-textbook and exam proctoring services. The program has achieved dramatic enrollment and revenue growth in recent years due to an increasing international presence.

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Consolidating Conference Services

Large Public University’s Centralized Conference Management

As a third example of applying imperative #2, one large public university bundled all conference services into a single, centralized conference management office. The office now oversees not only conference space rentals, but also accompanying food and lodging. This single point-of-service model has significantly improved customer service and allowed the university to charge a premium. The conference management office also generates additional business for campus housing and dining.

Of course, one potential drawback of centralized conference management is stifling faculty entrepreneurialism. To incent faculty to continue launching and recruiting conferences to their campus, the university instituted a revenue and cost sharing plan. Conference management splits revenue from all conferences with the college of the sponsoring faculty. Additionally, conference management absorbs any losses in the first year of a new conference. This safety net helps new conferences get off the ground and encourages faculty and deans to pursue promising ideas, hopefully leading to future conference business.

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Imperative #1: Capitalize on Student Demand for Convenience and Flexibility

Imperative #3: Seek Out Stealth Advertising and Leasing Opportunities