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A Conversation with Tom Dougherty

University Business, March 2013

Marketing and branding expert Tom Dougherty says that colleges and universities can and should adopt the promotional strategies of the top consumer brands. An often-quoted source on business and brands, he has been featured recently by The New York Times and CNN, discussing topics ranging from television to Apple to airlines. In his 25-year career, Dougherty has helped companies like Lexus, Tide, and IKEA capture market share from competitors by changing their focus from product to people. Dougherty says higher education can do that too, and he’ll share these ideas with the audience at UBTech 2013 in Orlando as a featured speaker. Here, in a conversation with University Business, Dougherty said the first step was to understand that higher education is a business like any other.

At UBTech, you’ll talk about changing the mindset of college and university administrators that don’t see the institution as a business. How do you do that?

The way you change the mindset is to first recognize where it comes from. The problem that we have with university presidents is that, even though they offer business classes, they look at business as the Great Satan. They think that if you are involved in the corporate world or in the business world, you have somehow sold out from the fundamental rightness and completeness of education. That’s the mindset you have to get past.

In fact, what you are looking at is a real entity—the survival of your university. If you look at the definition of business, it isn’t just commerce; it’s the competition for a scarcity of resources, such as students and their ability to finance their education. You are competing against other universities. If you don’t change your mindset, you may end up with the greatest university in the world and no ability to function. To me, that isn’t a tradeoff. It is an acknowledgement of the world as it really is.

The argument we sometimes hear is ‘We’re not a business. We don’t make widgets, we deal with people.’

If you think about it, the fundamental business of the university is as a service industry. Why? Think about it in terms of retail, which also is a service industry that doesn’t manufacture anything. Their focus is on human beings. The university presidents who understand that aren’t afraid to consider themselves like a retail destination. In this case, it’s a destination of higher education. You are in a competitive set. Students have the ability to choose another university or even another form of education, like a community college, or a for-profit trade school, or an online university. The reality is that students have more choice, so you need to set yourself apart.

Universities should want to be the IKEA of the higher education world. Where I live in North Carolina, the closest IKEA store is an hour-and-a-half south in Charlotte, yet people will make the pilgrimage. Before that store opened, the closest IKEA was in Atlanta, and people would go to that one. They will drive that far.

Now compare that with the brand you have at a chain like Target. I can go out my front door and find a Target three minutes away, and another one not much farther away. But Target is about product, not people. IKEA sells a lifestyle. It sells the ability for people to see themselves as someone who cares about style in an affordable way. That’s a people story.

What lessons can university leaders take from the IKEA comparison?

They need to understand that the basis of their brand is not in what they sell, but in who they are for. All the great brands of the world have innately understood that. They are never talking about a product or a service. They aren’t talking about what they do or what they create. Instead they talk about who they are for. That’s what the top universities do.

Maybe the best example of who you are for is to look at Apple. They sell products at a premium price, and they dominate most of the categories they play in. How? By telling you and me that people who use their products ‘think differently.’ They aren’t comparing all the features of the iPhone versus the Android. It’s not about that. Instead, it’s about you and me. Who are we when we use it? It’s that power of Apple to identify the human being instead of the product that keeps them from always having to have the latest and greatest. They don’t always have the next best thing. I would venture to say that if you look at some of the smartphones on the market, many of them have more features and benefits than the iPhone 5. Yet, the iPhone 5 gets a 150 percent price point jump and is not available in as many places.

Universities need to stop thinking of themselves as a place where people go just for education. They need to think of themselves as the place where educated people come. A kid that is going to college doesn’t see himself as ignorant. He thinks of himself as being quite erudite in many ways, therefore his school should be a “smart place,” if you get my meaning.

That’s a good point about students not seeing themselves as ignorant. When you research consumer choice, are students getting what they need from current college marketing?

I don’t think they get enough differentiation from college marketing. It brings us back to a basic problem in all industries today. That is the paradox of choice. Sometimes more choices cause us to make fewer decisions. For the average high school student who is choosing a university, that’s a very different world for him to be suddenly faced with his own self-direction.

What often happens is we give kids a huge catalog with way too many choices in it. Let’s say our student is interested in sports marketing. He looks at a course catalog that has 400 other things he could be studying, and it looks like sports marketing is not something the school understands or focuses on. But if the university says our major goal is to educate marketing professionals and we have various disciplines of study, one of which is sports marketing, the student is more likely to say that’s the school for him.

I think some universities are beginning to look like northeast Greek diners where, when you look at the menu, it looks like they make everything from eggs to lasagna—and they are all a specialty. That is not a believable story.

University leaders need to ask if the target market believes in expertise or does it believe in generalisms? That would help students make those decisions.

We’ve seen branding messages from many schools that are virtually indistinguishable from one another. How can a university set itself apart?

It’s really about focusing on who the student is. I hear schools argue, “We aren’t selling a one-size-fits-all solution; we are talking about students.” Yet when you look at their marketing messages, it’s never about the students—it’s about them. They become the 800-pound gorilla, pounding its chest saying, “We are… We are…” But very few of them say, “You are…” And “you are” is always a more powerful message.

When I work with a university, I find a niche that identifies something that hasn’t been done before. They’ll say they’re uncomfortable with that, but the reason they are risk averse is that they don’t want to be wrong. But in fact, with the position that they are currently taking, there is no doubt—they will absolutely lose.

Recently the University of California came under fire for changing its 144-year-old logo to a modern graphic. Is that sort of change risky?

Some years ago the GAP changed its logo and “everybody” was up in arms over it, forcing the company to change it back. But the reality is, if they didn’t change it back, it would have dissipated and everyone would have accepted it. The problem is that they listened to every opinion.

Universities say they don’t want to be businesses, but when I hear stories like that it tells me that they are more like businesses than they want to ever admit. They think if alumni don’t like it, we’ll lose their contributions. Well, contributions are another way of talking about sales. That’s a business model.

You’ve said that a brand can actually transform a university. How so?

It’s about letting students know where they are going when they come to your school. Think about it: Is the message, “We’re providing higher education” a different story from “We are educating people to find a job”? Yes, of course it is. If your university’s goal is to educate people to find a job, you need to reevaluate everything that your school does with that goal in mind. When you identify your focus so students can know what you stand for and what they will be saluting, they will find their way to you. Letting them know where they are going and what they will do when they get there is a very different story than saying, “we’re just a place of higher learning.”