Are referral fees a sustainable student recruitment strategy? Some may favor the idea, but this article might change your mind. Discover smarter alternatives along the way.
Cool! My university just paid me $300 for referring a friend. He found the school independently, but since there’s a referral program, we split the money—and even used some for a party with friends.
I’m planning to do it again with a few more friends. It’s easy money! They would have enrolled anyway, but hey, if the university is paying…
Now, some classmates are even asking for compensation to attend Open Houses or student recruitment events.
Eduardo's University is certainly not the only one that is trying this formula: Incentivize financially current students and even alumni to boost enrollment.
It seems like a good idea. The candidates applying through a referral are already convinced to join the university. They have first-hand information from current students who they trust. The Student Recruitment or the Admissions Team must do no more work. Easy. There is no need to spend money on education fairs to gain brand recognition, retargeting on social media, or follow-up e-mails from the recruitment team. You can even be a little bit more flexible in scholarship decisions. The CPA (Cost per acquisition) is only the commission paid to the referring student. That's a fraction of spending on the usual nurturing of the candidate pipeline. Besides, there is no better conversion than 100%! All the uncertainty is gone...
Putting money into the university-student relationship can be a double-edged sword. As explained, it can be a straightforward way to increase enrollments for a particular intake. Students might get greedy over time and ask for more money. If the recruitment cohort depends on a significant % of these referrals, soon the university might be held hostage. At the same time, this referral program might be open only to a selected few. This might create envy or hostility toward those who haven't been chosen or might not have the network to get referrals. Think about first-time university goers or students depending on scholarships as they might not have the means to attend education. Ultimately, it can create tensions between various stakeholders, and though it creates an enrollment boost, it also has a lot of undesirable side effects.
There can be many other ways to get students involved, help recruit students and grow the community. Some universities have built Student Ambassador programs that connect current students with the variety of activities of the admissions and recruitment teams. The incentive: valuable exposure, networking opportunities with senior members of the university, and even invitations to selected high-profile university events. For more senior profiles the incentive could be access to upskilling courses the university offers and similar event privileges. Just make them feel special - without money.
Let's finish with an even bigger idea... The building of a community and creating a sense of belonging and pride should be the ultimate goal of an academic institution. This is the idea of the Circular Framework, developed by eduALTO.
There is no shortcut. You won't see the result in the next intake. It will take time and a long-term financial commitment to invest in building this community. The benefits are obvious: students and alumni help recruit students by referrals as they take pride in representing the university on any occasion. The incentive is the honor of promoting the university, the honor of engaging with the community, and, ultimately, the honor of giving back. So, the larger the community of proud students and alumni grows, the CAGR is growing and it creates a snowball effect.