Recently, Stanford University made headlines for deciding to stop issuing an annual press release documenting its number of applicants and acceptances.

There has been a bit of an arms race among colleges with competitive admissions to be able to claim just how selective they are. The smaller the proportion of applicants accepted, the better the college does in many ranking systems and the more exclusive the “brand” of the college becomes.

This seems to be a bit crazy, as publicizing how few students are accepted is basically broadcasting how inefficient your college marketing system has become. We can’t think of any organization beyond colleges that would even consider doing something analogous to this – broadcasting to the world that they have enticed non-qualified buyers to consider their product.

I learned firsthand how ingrained this behavior is among college admissions and marketing personnel. About five years ago I had the pleasure to speak in front of a group of about 200 college marketers and high school counselors. I created what I felt was a compelling and original talk which took on this issue. I have given perhaps 200 talks in my career, and this one might have been the single most poorly received presentation I have ever delivered.

The main thrust of my argument was that as a marketer, you want to be as targeted as possible so as to not waste resources. “Acquisition cost” is an important success metric for markers: how much do you spend in marketing for every customer you are able to obtain? Efficiency in obtaining customers is what effective marketing is all about.

I polled the audience to ask what they felt the ideal acceptance rate would be for their applicants. Almost all responded “under 10%” and most responded “under 5%.” I then stated that the ideal acceptance rate for applicants would be 100%. The ideal scenario would be this: every applicant to your college would be accepted, would then choose to attend your institution, would go on to graduate, become a success, and morph into an engaged alumnus.

I used an analogy of a car dealership. Incenting college marketers to increase applications is akin to compensating a car salesperson for how many test drives he/she takes customers on. The dealership derives no direct value from a test drive. Every test drive that does not result in a car purchase is a waste of resources. The test drive is a means to an end and car dealers don’t tend to track it as a success metric. Instead, they focus on what matters – how many cars are sold and how much was spent in marketing to make that happen.

Colleges reward their marketers to get students to test drive when they should be rewarding their marketers for getting them to buy. This wouldn’t matter much if a high proportion of applicants were accepted and ending up attending.  But, even at highly selective colleges it is not uncommon for less than 10% of applicants to be accepted, less than 33% of those accepted to choose to attend, and less than 50% of those that enroll to actually end up graduating. At those rates, for every 1,000 applicants, just 17 will end up graduating from the institution. That is a success rate of 1.7%.

These are metrics that in any business context would be seen as a sign of an organization in serious trouble. Can you imagine if only 10% of the people who came in your store qualified to buy your product? And then if only a third of those would actually decide to do so? And then if half of those that do buy don’t end up using your product or return it? That is pretty much what happens at selective colleges.

This issue is a failure of leadership. College marketers I have worked with can often see this problem, but feel pressured by their Deans and College Presidents to maximize their applicant base. Granted, this can help build the college’s brand, but it is a huge drain on resources that are better spent ensuring targeting applicants who are poised for success at the institution. It has happened because selectivity is considered important in building a college’s brand. Stanford has taken a useful first step, and hopefully other colleges will follow their lead.