$19.2 billion.

If you take the annual budgets of 142 countries, including Cuba, Jordan and Lithuania, and add them up, they won't amount to $19.2 billion.

Yet in the year 2000 that sum was Harvard University's endowment. If you're thinking, “Wow! That's amazing!” there's another “wow” coming up.

In 1999, Harvard's endowment was $14.4 billion. In one amazing year, Harvard University's wealth jumped nearly a third. What's fascinating is that the $4.8 billion dollar increase alone was larger than the total endowments reported last year by some of the nation's other top universities, including the Massachusetts Institute of Technology ($4.3 billion), Columbia University ($3.6 billion) and Dartmouth College ($1.7 billion).

So What's Harvard University Doing That You Aren't?

Mmm… Good question. And one worth answering. Because Harvard's structure and marketing system can teach us one heck of a lot.

Let's get into the classroom, shall we? And while I'm at it, I'll take a real business example to make the leap into understanding not too difficult: Business Case Study: An Imaginary Web Hosting Company Called WebGhostum.

Harvard Lesson No. 1: Teach Your Clients Well...

Huh? What kind of marketing strategy is that? The best kind, my friend. How much time do you spend on the education of your clients?

Look at what Harvard is doing. It's not just educating their clients, it's actually making the clients pay for the education. The smarter the clients become, the more they earn. The more they earn, the more they credit Harvard University.

So Yeah, You've Got a Sales System in Place...

But have you got an education program for your clients? Nope? Why not? Couldn't you have a training program where your clients would pay to learn what you know? Wouldn't that make your clients oh so smart and consequently richer?

Harvard puts the highest emphasis on the art of teaching. New professors take rigorous teacher training. Each teacher has several mentors who inculcate different aspects of the Harvard system.

If you've got a sales force, how about training them to be teachers? If you're a small business, how about making your Web site or your brochure an education system? How about having a training course just for your clients?

Here's What Webghostum Should Do

Customers have no idea why one Web host should charge $15 per month while the other charges $75 for the same space and bandwidth. So in the true spirit of education, here's what WebGhostum could do:

  1. It could have a Web page or a booklet outline the dangers of choosing the wrong Web host. There are dozens of very important factors that need to be explained to potential online businesses. Business owners are often oblivious to the facts. The Web page or booklet would be a vital tool in educating them about the stable door, BEFORE the horse bolts.

  2. The Web host could have a two-hour training session, which it charges for, on how to choose the right host. Plus, it could add on an expert who talks about how to create a Web site that not only draws huge amounts of traffic but also converts customers into paying clients.

  3. It could educate its salespeople by getting them to attend these training sessions and reading the Web page or booklet. The salesperson then becomes an educator instead of a pushy salesman/saleswoman.

Which brings us to Lesson No. 2: the art of playing hard to get.

Harvard Lesson No. 2: Just Say No

In 1997, there were 880 seats for Harvard Business School. Nearly 7,500 students applied.

Harvard says no to over 90%. Partially, it's because of Harvard's limited capacity… but if you notice carefully, Harvard hasn't quite increased the size of its classroom, either.

Harvard does a superb job of saying NO. Incredibly, the more it says NO, the more the customer psychology kicks in. The desire to get into Harvard grows stronger than ever.

So How Do You Say No to Your Clients?

Do what Harvard does. It set up a carrot-and-stick criterion. You have to qualify before you will be considered. Once they set up this criterion, Harvard sits in its little castle and pull up the drawbridge.

And, darn it, you as a student want to get past that moat and get into the castle more than ever before. You so want to get that carrot that you're tripping over yourself to get in.

Harvard's No Extends to Other Areas, Too...

Harvard created customized courses for companies. But Harvard laid down rules as well. The Business School won't take on a company if there is no participation and commitment from the CEO. If the criteria aren't met, no matter how lucrative the opportunity the business school says NO.

So Here's What the Web Host Could Do…

First, it could list the huge benefits that a person would get by joining the Web host. Alongside the benefits, the Web host should also list the qualifying criteria.

Second, to qualify for these benefits, the client would have to fill out a form and submit it to the Web hosting company; it would then evaluate the form, and the space would only be given once the evaluation determined that the client met the criteria.

That's the equivalent of Just Saying No. It's a whole lot better than saying yes to every customer that knocks on your door. And contrary to common sense, Harvard has proven that you get far more customers when you say NO. A systematic and strategic system will allow you to say no and still grow your profits exponentially.

If You Don't Believe in No, Look at the Figures

Harvard accepts only 15 clients at a time in its specialized Customized Courses. In 1997 alone, Customized Courses accounted for $50 million.

And Harvard doesn't quite stop there.

Lesson No. 3: Are You a Publisher Yet?

“Since we can't bring everyone to campus, we extend the brand to the places where people work or to their homes,” says Linda Doyle, CEO of Harvard Business School Publishing.

Good point, Linda.

So how do you get customers who won't come to your campus all excited? Harvard does it with Harvard Business Review, Harvard Business Online and dozens of publications and interactive and digital media.

In fact, Robert Clark, Harvard's dean, says there is evidence that the Harvard Business Review and the electronic media tend to increase a student's desire to attend live sessions at the campus.

Do You Take Your Brand to Your Customer?

Do you have a newsletter that stops talking about how wonderful you are and actually gives the customer vital information? Do you create products or information packets that the customer can purchase on an ongoing basis? Are you creating the customer's desire to buy into your product?

Chances are you're not. You're so busy trying to sell your core product or service that you've completely, totally forgotten that ancillary products could get the customer more involved in your company than ever before.

Harvard can't get everyone to its hallowed halls, but it's got to make sure that the student doesn't wander across to another university. So while the student is waiting, Harvard gives him or her loads of product to experience and learn from.

How the Web Host Could Bring the Brand to the Customer

Web hosting is a dry subject. It's like warehousing. There isn't a lot to know once you've done the education of the benefits. However, there are lots of ancillary fields that are vital to making sure that the customer stays with the Web host.

If the customer hosts with a Web host and doesn't make money online or finds the hosting to be too big an expense, that customer will never explore the potential of its Web site. Which means it will never move up the ladder into higher-bandwidth, more-space Web hosting. This is profit down the drain for the Web host. The best way to circumvent this loss is to take the campus to the customer.

Start a Publishing Arm

If you don't have your own content, go out there and find a partner whose content is complimentary to yours. The Web host could find marketing, design, copywriting, search engine positioning and measurement tracking companies.

All of them could be contributors to a newsletter or booklet. If time and budget permit, you could even print your own “Harvard Business Review.” Think about it. The smarter your client gets, the more she'll thank you for it.

Become a publisher. Find ways to get across to your client and become a publisher of sorts.

Because, as dean Robert Clark says, “The challenge is to be able to expand the range of Harvard without diluting the brand. But the risk on the other side, the risk of sitting still and doing nothing, is just as great.”

So get off your you-know-what and emulate the simple success of Harvard University.

After all, you can't argue with $19.2 billion!

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Sean D'Souza uses age-old psychology, marrying it to modern technology, on his Web site, psychotactics.com. Can "psychological tactics" make a difference? Go there and find out.

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