6 Student Segments Show Variations in Customer Motivations & Spending Power, Depending on Career Achievement & Life Stage
MBA customer segmentation examples become particularly relevant this year. There’s a possible economic downtown, given disruption from funding cutbacks and government employee layoffs. It will be interesting to see the impact on MBA applications and enrollment, and the distinct segments within this market, such as:
- Full-time MBA
- Online MBA
- Hybrid MBA
- Part-time MBA
Overall, MBA demand has fluctuated considerably in the past five years, making customer segmentation more important. For instance, a GMAC survey of 297 business schools reported that MBA applications rose 13% in 2024, with 80% of programs surveyed showing growth. This strong growth reversed the prior three years of decline (e.g., 2023: -4.9%, 2022 -3.4%) and flat applications (0.4%). 2024 was the highest growth seen in a 10-year period.
In 2024, full-time US domestic student applications grew the fastest at +32%. Growth was also seen among domestic students applying for online MBAs at 18%, hybrid MBAs at 13% and part-time MBAs at 9%. International applications declined in several segments and posted more modest increases for full-time MBA (+4%) and online MBA (+9%).
Not surprisingly, the M7 (Magnificent 7) top-rated MBA programs posted greater application increases than the market overall in 2024:
- Wharton (+18%)
- Harvard (+21%)
- Stanford (+18%)
- University of Chicago (+16%)
- Columbia (+16%)
- Northwestern (+16%)
- MIT (+16%)
Getting an MBA at a top-tier school is a different financial proposition, and customer segmentation examples will be quite different from other schools.
“U.S. News data shows that grads of B-schools with the most sterling academic reputations are, in some cases, paid a salary and bonus more than triple that of grads of the lowest-ranked schools.”
Along with greater applications, MBA enrollment was also estimated to have increased 1.4% in 2024. This represents a flattening out of the longer-term enrollment decline trend of 2.3% from 2018 to 2024. It remains to be seen, but one source expects enrollment to increase 3.2% through 2030.
Since there is a lag from application to enrollment, it may be that any disruption in 2025 does not impact applications until 2026. And, with many second-round MBA applications deadlines closed for 2025, it will be some time before 2025 data is available.
MBA Customer Segmentation Examples:
3 Professional Segments Who Seek Raises & Promotions
Using years of experience as a customer segmentation example variable, three customer segments emerge, each with different expectations from an MBA.
The first segment of “Early Career Professionals” is approximately 22 to 27 years old, with three to five years of experience along with a bachelor’s degree. They hold an entry level position or may have been promoted once. To keep the segments distinct, the definition of this segment will be those who want to stay in their current industry.
For Early Career Professionals, an MBA can help accelerate their promotion, open up new job opportunities in their current employer or industry that require an MBA, and will likely lead to their earning more money.
These Early Career Professionals may have a median salary of around $65,000, though this will vary greatly by occupation, industry and geography. The median salary for US full-time workers age 25-34 with a bachelor’s degree was $67,000 in 2022, 19% less than the median of $80,000 for those with a master’s degree (not necessarily an MBA).
Similarly, the Bureau of Labor Statistics reported median weekly earnings of $1,493 for full-time workers ages 25+. Those with a master’s degree can expect 16% more at $1,737 per week. With the increased median earnings for master’s degree holders (including MBAs), the Early Career Professional can expect a reasonable financial boost after completing the MBA.
The next MBA customer segment is the “Mid-Career Professional” with eight to twelve years of experience. With this level of experience, they are in their early to mid 30’s. Like the Early Career Professional, this segment has an undergraduate degree, and some may even have a master’s in a non-business discipline, for instance engineering. Definitionally, again the focus for Mid-Career Professionals will be on those who want to stay in their current industry.
In their work, they may have hit a growth plateau within their area of specialization and are interested in pursuing an MBA to unlock leadership roles. These Mid-Career professionals may have salaries similar to the Early Career Professionals, or a bit higher given their experience. With a median salary of $75,000 (estimated), the Mid-Career professional needs to more seriously evaluate the expected return from his or her MBA.
A 2023 survey of online MBA graduates reported that 54% received a salary increase, and 40% got a promotion as a direct result of earning the online MBA. Of course, that means 46% did not get a salary increase, and 60% did not get a promotion as a direct result, suggesting that switching employers and industries may be needed to get greater financial return on the MBA.
Staying at the current employer after getting the MBA might yield an initial increase of 10-15% with a promotion, but switching to a higher-paying industry or large metropolitan area may allow the Mid-Career Professional a greater increase.
The third customer segment is the “Career Switchers.” Definitionally, this customer segment is looking to pivot from one occupation to a very different one. Much of the time, this requires leaving the current employer, and it may also require relocating geographically. This segment is in their thirties and forties.
Making a bigger change will likely require greater time investment from the Career Switcher to learn about the new occupation and the new industry. Networking with other MBAs and reaching out to a broader set of contacts, such as LinkedIn second- and third-degree connections may be needed. Depending on the MBA program selected, the business school’s career placement office may be helpful or less so. If these individuals have young families, this extra time commitment may be difficult to achieve.
Similar to the Mid-Career Professionals, Career Switchers will get a higher return on their MBA investment if they are moving into a higher paying industry (e.g., investment banking or management consulting) or a large metro with higher salaries (e.g., New York City or San Francisco). As a balancing factor, the higher cost of living in the large metro may partially or even fully offset these gains. Still, this segment can potentially achieve the highest returns by getting the MBA and making the pivot. For those who go full-time, many will find it pays off, as 79% of full-time MBAs found the program they attended was financially rewarding
To be sure, there are other customer segments who do not fall into these categories, such as older candidates (ages 50 and beyond, Executive MBAs, etc.) but for many business school programs these three customer segmentation examples are a large amount of their customer base.
MBA Customer Segmentation Examples:
3 Pricing Segments for Online & Hybrid MBA Programs
Online MBA programs have gained popularity in recent years. In fall 2023, an estimated 58% of all MBA enrollments were in online programs – the majority of enrollments. Based on this popularity, it is evident that there are several customer segmentation examples that are choosing the online MBA or the hybrid MBA. And, from 2018 to 2023, online MBA enrollment grew at a 2.2% compound rate.
The top online MBA programs are a very different list than the M7. Using rankings from US News & World Report, these top online MBA programs include many public universities, as well as some privates, and none of the M7.
There is a large variation in the number of students enrolled, with #1 ranked Indiana University- Bloomington by far the largest at 1,729 students. There is also significant variation in pricing, from $895 per credit hour for Kansas all the way up to $2,421 for USC Marshall OMBA.
| Rank | University | Online MBA Name | Cost per Credit Hour |
| #1 | Indiana University–Bloomington | Kelley Direct MBA | $1,758 |
| #2 | University of North Carolina–Chapel Hill | Kenan-Flagler MBA@UNC | $2,025 |
| #3 | Carnegie Mellon University | Tepper School online hybrid MBA | $2,307 |
| #4 | University of Washington | Foster School Hybrid MBA | $1,548 |
| #4 | University of Florida | Warrington Online MBA | $1,208 |
| #6 | University of Michigan–Ann Arbor | Ross Online MBA | $2,256 |
| #7 | University of Southern California | Marshall OMBA | $2,421 |
| #7 | University of Arizona | Eller College | $1,250 |
| #7 | University of Kansas | $895 | |
| #7 | Arizona State University | Carey School | $1,372 |
Pricing provides a clear, visible way to divide online and hybrid MBA customer segmentation examples.
The less expensive online MBAs likely appeal to an “Online Value First” MBA customer segment. These consumers are looking to get the MBA accreditation while holding costs down and are comfortable learning online and hybrid.
For a price range of $10,000 to $30,000, the Online Value First MBA can obtain their MBA.
Two examples of programs that appeal to the Online Value First customer segment through their pricing are:
- University of Texas the Permian Basin – an AACSB-accredited online MBA for roughly $10,700 tuition for students with a business undergrad ($355.99 per credit hour), 30 credits. For those without an undergraduate business degree, the total tuition is $12,815.
- University of Illinois iMBA – costs $26,136 total, including tuition and fees. The program promises “real-time application to your job,” “customizable curriculum,” and “24-60 months to complete – you set the pace.” They also tout a “25% average pay increase during the iMBA program” and “62% received a promotion, job offer, or new position during the iMBA program.”
There are a number of other public universities offering an online MBA program in the lower price range. For instance, Georgia Southwestern State University offers an online MBA for approximately $9,500 in tuition.
A second level of online MBA pricing has tuition ranging from $30,000 to $80,000. The customer segment that finds this balance of affordability and program benefits appealing is more of an “Online Balancer” from a price perspective.
Two examples of programs that appeal to this Online Balancer are:
- University of Florida Warrington- has tuition of $58,000 plus an additional $1,807 in fees. Convenience is the benefit that this program heavily promotes: “Our Online format focuses on continuing a student’s professional development with limited interruption to everyday life. With a bank of lectures online to watch at the most convenient time, students can expect an estimated 15 hours of work per week through individual assignments, group projects and readings.”
- Arizona State University Carey School – has estimated tuition and fees of $72,000 for the online MBA. The website touts: “Move your career forward with one of the highest-ranked online MBA programs in the world.”
The final pricing tier in the online MBA market is the highest priced with tuition ranging from $80,000 to $150,000. This online MBA Customer Segment prioritizes factors other than pricing and can be called “Online Premium Demanders.” There are several MBA programs priced in this range. Examples include:
- Carnegie Mellon Tepper online hybrid MBA – Priced at $140,000 for tuition (not including fees), based on $17,500 per semester over eight semesters. This top-ranking online program (#3) promises: “Tepper Online Hybrid MBA offers the best of both worlds—the convenience of learning from anywhere coupled with in-person experiences that ensure you don’t miss out on anything by being online—all in one high-caliber program.”
- University of North Carolina Kenan Flagler online MBA – With a cost of over $125,000 this is reportedly the most expensive public university online program. Their program touts: “MBA@UNC is where high achievers become agile leaders. When you earn your MBA online from the top-ranked UNC Kenan-Flagler Business School, you’ll prepare to analyze problems, strategize responsibly, and build mission-driven organizations.”
These pricing examples are just one way of segmenting the online MBA market. In conversations we had recently with a university that offers an online program, it sees the target consumer as a busy working professional with a young family at home.
Insight to Action’s experience in customer segmentation spans education, CPG, automotive and many other industries. For more customer segmentation examples, visit our resources page. Or contact us to share your thoughts.
