Determining Market Saturation for Academic Programs

October 18, 2022

This article includes excerpts from Stop, Start, or Grow? A Data-Informed Approach to Program Evaluation and Management.

Higher education is becoming increasingly competitive, but competition doesn’t always mean that a market is saturated. Depending on the institution, competition can be friend or foe. Institutions with a strong brand name and a great marketing organization are going to seek out big, competitive markets because they know the students are there, and they can step into a market and take share from the existing institutions. For one of our clients, we found that they took 50 percent market share when they entered a market. For them, competition was a friend.

Most colleges are not so fortunate and do not have the brand or marketing clout to take share in a saturated market.

How to Know When There are Too Many Competitors for an Academic Program

There are several indicators you can use to determine if a market is saturated, including cost-per-inquiry and Google cost-per-search. Institutions directly or indirectly bid for searches. The bidding drives up the cost in more competitive markets and programs. If these costs are well above average, the program market is getting highly competitive.

Google also offers the Google Competitive Index by keyword, which ranges from zero to one, with one being the most competitive. It’s a good indicator of competitive intensity, especially if you compare an existing program you offer with a potential new program’s index. If the new program’s index is higher than you are accustomed to, program growth or market entry is likely to be a challenge. The index can also explain enrollment declines in existing programs.

There are other dimensions of saturation that need to be addressed. Clinical sites for health care programs are often a constraint. Some institutions are skillful at winning clinical sites, while others simply pay for them, but clinical sites may determine when a healthcare market is saturated. To the best of our knowledge, the only way to assess clinical saturation is to visit or call potential clinical sites to assess their interest.

Programmatic accreditors may also dictate when markets are full. There are a number of programs with waiting lists for students and employment shortages that are nonetheless capped by their accreditors. In these circumstances, it isn’t the number of students who want the program, or the number of jobs for graduates; it is the accreditor’s perception of the program that determines who wins. As a result, accreditors’ conferences are well attended by educators and senior executives who need to know what the accreditor requires and to form relationships with the leaders of the accrediting organizations. These insights on accreditors are a vital part of program evaluation in many fields.

What to Consider When There are More Students Than Jobs

Job opportunities for graduates may also be saturated. It would be unwise, both morally and from a regulatory perspective, for an institution to systematically recruit and graduate more students than there are jobs. At some point, regulators will discover low placement numbers and recent graduates’ unpaid financial aid bills.

Institutions bear some responsibility for these outcomes, good and bad. It is misleading and perhaps unethical to start or grow programs where job prospects are bleak, no matter how popular or profitable they may be. It is also somewhat addictive, as colleges become dependent on programs that generate margins for the institution.

The Secret Sauce

Fortunately, there remain programs in almost every market that have the potential to grow, increase institutional margins, and enable graduates to get good jobs. The goal is to add or grow programs in fields with high student demand, plenty of job openings, high wages, and healthy margins.

Robert Atkins


Bob led Gray DI’s entry into the education industry and the development of Gray DI’s proprietary industry databases and service offerings. He has worked directly with many of Gray DI’s education clients, consulting with CEOs and CMOs on business strategy, pricing, location selection, curricular efficiency, and program strategy.

About Gray DI

Gray DI provides data, software and facilitated processes that power higher-education decisions. Our data and AI insights inform program choices, optimize finances, and fuel growth in a challenging market – one data-informed decision at a time.

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