University for Sale
What Marketers Need to Know About M&A
Last week I had the opportunity to join Kin Sejpal on a special edition of The Higher Ed Pulse podcast to talk all about mergers and acquisitions.
While it’s not a topic I’ve spoken much about previously, it’s actually one I’m particularly passionate about. Over the course of my career I’ve been involved in the acquisition of multiple universities, as well as private companies.
And as higher ed closures, consolidations, and mergers continue to rise, there’s a real probability that more and more marketers will find themselves called to the table to provide professional insights into whether one institution should move forward with an acquisition of another.
So before your President approaches you about a potential merger, I wanted to share a few initial thoughts, based on my own past experiences.
To that end, here are six pieces of advice for any marketer participating in their first merger or acquisition:
#1 Most Mergers Fail
The first thing to understand is that most higher ed mergers fail. From my own analysis, roughly 80% of all higher ed mergers and acquisitions from the past 10 years have resulted in flat or declining enrollment.
That means you’ll have your work cut out for you, especially since so many Boards and Cabinets come to the table with the naive assumption that their institution is uniquely equipped to quickly and easily turn around declining performance at the to-be-acquired institution.
#2 Securing Your Seat
The second piece of advice is that it’s absolutely critical as a marketer that you secure your seat at the table. Many times Presidents won’t loop in marketing until an unofficial consensus has been reached among board members, often on false assumptions about future performance.
Therefore, make it known early and often - even before any merger talks arise - that you have an interest in M&A and directly make the ask of your boss that you would “like to lead marketing diligence on any future mergers or acquisitions.”
All deals come with diligence, so reminding those around you that you would like to lead the marketing portion of the process is a great way to ensure you’re included when an opportunity comes up.
#3 Start With Conservative Projections
As noted above, hopium will abound with any potential deal, but whatever you do keep expectations in check.
One simple way to keep things in check is to trend out current performance for the to-be-acquired institution and create a simple narrative that everyone can understand.
An example I often use is “If all things remain equal and current trends continue, X institution will be under Y total students by Z year”
#4 Look For Low Hanging Fruit
While doing your analysis of the institution you may acquire, pay particular attention to any quick wins that could provide immediate performance improvements.
Whether it’s speeding up their website, updating their email nurture series, or restructuring their paid campaigns, finding a high volume of low hanging fruit can increase your confidence in signing up for the projections you’ll no doubt be pressured into endorsing.
#5 Protect The Brand Before You Merge It
One key item to call out is that the biggest short-term risk to a merger is damage to the acquired institution’s brand. The primary threats are a decline in referral, due to pissed off students and alumni, as well as any actual name change, which has the potential to decimate inbound branded search - which is almost always the highest driver of incoming new starts.
As a result, the best thing you can do is advocate for an acquisition in phases, whereby the institution retains its brand in full in the short term before progressing to an intermediary co-branded phase, followed finally by full absorption by the acquiring institution.
#6 Don’t Lose Sight Of The Core Business
Finally, whatever you do, don’t let your institution lose focus. All too often acquiring institutions get so caught up in dealmaking that they neglect the very activities and behaviors that drove their success in the first place.
Be vigilant in tracking current performance and don’t be shy about sounding the alarm when concerns present themselves.
Final Thoughts
If you’re a marketer in higher ed, it’s likely only a matter of time before you’re being asked to weigh in on a potential merger or acquisition. If it hasn’t happened yet, I’d encourage you to take some time to think about how you’d react to that opportunity, the role you’d want to play, and what you’d need to do to secure your seat.
Because the unfortunate reality is that whether or not you weigh in on the performance projections developed, as a marketer, you’re going to be the one held responsible for them.
So the best thing you can do is be ready to not only contribute, but ideally control as much of the M&A process as possible, as chances are your job may just depend on it.
About The Author
Seth is the founder and CEO of Kanahoma, a San Diego-based performance marketing agency on a mission to build a better agency for organizations building a better world.
You can learn more about who we are and what we do at www.Kanahoma.com.