This article continues from Part 2 of Real Revenue Recovery Right Now, where we describe four useful customer strategies for success.
Getting the basics RIGHT
Fulfilment REORGANISATION
Asset REDEPLOYMENT
Value REPLACEMENT
Each post in this 4 part series takes you through each strategy and gives an example of a company that has done this well. In Part 1 we discussed how a small amount of insight and good management is enough for companies that are less effected by coronavirus to succeed. In Part 2, companies dealing with more extreme challenges should look for options to reorganise how to fulfil customers’ needs.
Asset redeployment
Asset redeployment is the next revenue recovery strategy. The idea is to give your customers a key aspect of the customer value proposition they want by using your assets a different way. The key differences between asset redeployment and fulfilment reorganisation are what changes. With fulfilment redployment the product is the same but the way it is provided to the customer changes. This may involve changing assets (like moving from a retail experience to an online experience). Asset redeployment keeps all of the same assets but changes the actual product or service. In both cases at least part of the core value proposition to the customer remains the same.
International university student revenue will drop by $3 billion this year
Australian universities have been hit hard by the closure of Australia's borders preventing international students from attending classes on campus. Estimates of 21,000 job losses were reported by the ABC in May this year. The concern is not just losing students for a single year according to the head of Universities Australia, Catriona Jackson. She said the revenue hit would be felt for years. The article went on to quote a union official in the sector who compared the current situation to a previous down turn:
If you look at the global or the Asian financial crisis a few years ago, it took five years for the numbers of students to come back to Australia. I think we're in the same boat.
Our research on student experiences with several universities uncovered the core components of the value proposition attracting international students to study here. Most of our international university students have come from China. Their primary reason often relates to a sense of prestige. An international degree is more highly valued in China than one from a local university there. US degrees are considered the most prestigious by Chinese students. However cost is a factor and Australia is far cheaper than the US when it comes to the fees international students are required to pay to get a degree. So the wealthiest Chinese students study in the US and some of the rest come to Australia. Australian universities would like to claim it is their institutional branding and reputation attracting these students. This is a factor for sure, but our research showed Australia as a country was the more important factor. Some of the other reasons international students like to study in Australia is to learn English and to acquire permanent residency status. Both of these are somewhat outside the scope of our universities’ value propositions. Unless they are coming to do an English Language Intensive Course for Overseas Students (ELICOS) program, the students are supposed to already be fluent at English just to get in to uni. And permanent residency is not assured simply by completing a degree here.
Based on the value drivers Australian universities should be on working out how to offer international students the same level of prestige (even if they cannot physically come to Australia to study). One way to do this could be to offer virtual internships with Australian companies. The appeal of working for an Australian company as part of getting degree is greater than just studying here. Sadly, many universities have tended to over-promise and under-deliver when it comes to the career impact they claim to have. Students end up with an expectation their degree will magically pave the way into their dream job with a preferred employer of choice. Reality falls a deal short of this.
A university is more of a hygiene factor than a differentiator for most graduates entering the workforce for their first formal professional role. Having lectured at eight universities around the world (including in Europe, China and Australia) it is apparent to me most universities are not doing much beyond all care taken and no responsibility for helping their graduates find good entry level placements. Most of them don’t do much more than host company graduate recruiters. By redeploying teaching and admin staff to work with industry partners, most Australian universities could create a value proposition still very valuable for international students. The key component would be working out how the international students could intern remotely. Not really too different from local staff working remotely. This approach doesn’t change the core value of an Australian degree for an international student, it just offers that value through a different service offering with the same resource set. The final approach innovates around core value propositions.
Value replacement is covered in Part 4.
Robert Dew is a Founding Partner at CapFeather Global with more than 2o years of corporate consulting and university lecturing in Innovation, Customer Strategy and Customer Experience. His PhD related to improving creativity in strong corporate governance environments. He has also done 60+ start-ups.