Increase Revenue with Modern Continuing Education Software
How using modern eCommerce principles drives revenue in Continuing Education
To say that COVID-19 is disrupting the economy in general and higher education in particular would be one of the biggest understatements of the century.
What is clear is that face-to-face instruction will be touch-and-go for fall 2020, and possibly for spring 2021. This means that more students and faculty are being exposed to online learning.
What is not clear is whether the attitudes to online learning will change in the long run, and how. Also, it is not clear how long the COVID-19 disruption will last and which institutions will survive it.
The plight of small, private, tuition-dependent institutions is nothing new, and many will merge or perish. Just recently, Boston College acquired one such institution (Pine Manor College), and we can expect more of these kinds of acquisitions over the coming years, even months.
However, small schools are not the only ones in trouble, as IPEDS data for FY2018 show that 32% of public four-year institutions and 36% of private, non-profit four-year institutions ran an operational loss. All of these and many others are vulnerable to the triple whammy of tuition and revenue losses, endowment/state funding losses and, if they have a medical center, significant losses in healthcare revenues that have been hobbling healthcare systems. For example, while many schools were reporting losses in the tens of millions, the University of Michigan announced that they could potentially experience $1 billion in COVID-related losses, largely due to its health system.
The key to understanding COVID-19’s long-term implications is being able to understand any sociological changes. While many students are clamoring for in-person courses, statistics show that even more students are open to having online courses blended into their college experience.
What does all of this mean for higher education? How do we navigate these truly unprecedented times?
First, it is important to understand that we are seeing more of acceleration of progress than true change. The value of a college degree has been under attack for a while now, so universities have been among the leaders of the alternative credentialing movement. Big brand-name universities are developing online programs, albeit at a slower pace than mega universities and both are taking market share away from regional institutions. Students are asking about career preparedness and how the curriculum aligns with jobs. Costs are skyrocketing and universities, including some very well-known R-1 institutions, are running deficits. Nothing is really new, but everything sped up.
Gabrielle Hamilton, a chef and former restaurant owner, wrote in The New York Times Magazine about the plight of the city’s restaurants, and one quote really stuck with me:
“For restaurants, coronavirus-mandated closures are like the oral surgery or appendectomy you suddenly face while you are uninsured. These closures will take out the weakest and the most vulnerable. But exactly who among us are the weakest and most vulnerable is not obvious.”
The same could easily be said for higher education.
While institutions need to make many hard choices, choosing to focus on online delivery is of the highest importance. This is not just to deal with the immediate crisis but to be able to survive and thrive in the future.
When it comes to going online, here are some points to consider and decide on rather quickly:
Regardless of how long COVID-19 lasts, tolerance for online education is increasing around the world. The move to “emergency remote instruction” might have soured some students, but many institutions are having a banner summer while operating fully online.
Traditional students’ lives are complicated. They want to take internships, gain work experience, possibly start their own businesses, etc., and having robust online offerings gives them the chance to do that without putting their studies on hold. So, positioning online education as a complement the traditional on-ground experience is a very viable strategy.
This would mean moving large parts of the catalog online, having robust online offerings in the summer and providing the necessary flexibility to your students. This flexibility is even more important in professional graduate programs or programs oriented toward non-traditional students, as these students’ lives are even more complicated by their ever-shifting work and family obligations. In other words, online would be just another classroom, and students could take their classes in the format that is most interesting and/or convenient for them. Once enough online courses become available, you can make it possible for someone to obtain their degree fully online, but your strategy would not be to scale online offerings to the level of the mega-universities.
Another option is to aggressively move into the online space and scale up rapidly. This will allow you to take full advantage of economies of scale that come with fully-online programs. While the instructional approach might not differ from the complement strategy, all other operations will be markedly different.
Your institution should be prepared to invest heavily in marketing and relevant systems. You must have a highly functional IT infrastructure (including a CRM, marketing automation software and registration system) and have proper design and analytics teams available. More importantly, you must have call centers that can answer inquiries within minutes and properly nurture leads through the funnel.
Many of these are not in traditional institutions’ DNA and involve significant investment to boot. You also need to figure out how to deliver all support services online.
This should be something that the institution should already be able to answer. Location plays almost no role in online world, so that advantage/protection is out of question. How will you differentiate yourself? Content is likely not a good differentiator because content is widely available and often at a very low price. Differentiation is found in how you engage and support your learners online. Engagement comes from both faculty and peers, so the quality of online teaching is paramount to success. Building a community of learners and professional networks is also very important, so it’s essential to figure out how to do so in the virtual world.
Online education has not permeated the ranks of full-time educators, especially among tenured and tenure-track faculty. Quality Matters shows that this is especially the case at R-1 research institutions, where 66% of full-time faculty and 57% of part-time faculty have not previously taught online. But it’s not just R-1s who are unfamiliar with online learning. With the exception of community colleges and regional public institutions, the majority of faculty did not have online teaching experience. Interestingly enough, at 44%, R-1s have the second lowest percentage of students with no prior online course experience, a lower percentage than even community colleges.
One silver lining the spring 2020 pivot has brought is that almost all faculty has been forced to think about online delivery. This has brought forth tremendously creative approaches to online learning, and it has been satisfying to see colleagues find new and better ways to engage students. High-quality faculty engagement will help institutions differentiate themselves from others, and it is very important to include star faculty in online efforts. If you are gunning for scale, the SME/facilitator model will work, but design has to be top-notch. Regardless of the instructional approach you choose, you must figure out how to help fully online students build community and how will you provide non-instructional services, such as placement support, not only at a distance, but possibly internationally.
However, you cannot just think through this in a vacuum. You must engage your stakeholders—especially students and alumni—to help you figure out what your “secret sauce” actually is. You must have a clear-eyed picture of whether you can deliver on what you’re promising, both immediately and in the long term. Surveys and focus groups can help in this effort, and you must resist the urge to dismiss negative feedback. Also, you must realize the pitfalls of being in an echo chamber, especially if you are struggling with enrollments. What your current students find especially attractive might be putting off potential students. The question then is: do you want to change, or do you need to simply reach more people who will appreciate your unique institution? Either way, you must set an intention.
Now that you know what you want to achieve and how you want to differentiate, how will you get there?
Obviously, the first question you must ask yourself is whether to build or buy. Building means having an internal effort to provide online instruction and services. The advantage is that you get to control the entire effort, but disadvantages are that it is very difficult to achieve scale and you have to fund this effort yourself. This is a topic I’ve covered in the past, exploring key considerations for new online entrants and factors to consider when looking at OPM partnerships.
The key factor here is your capacity for risk. Online has not been a sure bet for a while now, so you need to determine whether your institution can bear the risk. To have a comprehensive unit built from scratch requires north of $5-$10M in investment, and reaching scale can easily take tens of millions of dollars in marketing expenses alone. Much of these funds have to be committed before it is clear how successful the effort will be. However, the internet is not going anywhere, so investing in your own infrastructure has a lot of merit, especially when it comes to core activities such as instructional design and curriculum development.
If you choose to buy, the question is whether to go “fee-for-service” or “revenue share”. Both of these could fall under the category of retaining an OPM. According to 2U and others the requests for OPM services are booming, and many OPMs confirm as much. However, given the pressures on finances, colleges will likely be more open to revenue sharing agreements, but it is not clear whether OPMs are as excited about those, especially not on terms that prevailed prior to COVID-19. There is a shortage of talent, especially in Instructional Design (this shortage has been noted for years). And now that everyone seems to have woken up to the need to advertise, competition for clicks is fiercer, and budget needs are greater. At the same time, risk is considerably higher simply due to entering into the online space is no longer a guarantee of success (if it ever was).
Universities trying to achieve scale often do not have many options other than to engage with one of larger OPMs or to simply buyan established, large online provider. Purdue bought Kaplan, and Arizona just bought Ashford. But looking at the Arizona announcement, this seems to be a revenue-share agreement, in which Arizona will pay Zovio (parent company of Ashford) 19.5% of revenue and foot the bill for running online operations. In return, the university will receive $225 million over 15 years with $37.5 million upfront. The integration of two cultures will be interesting to watch, but this looks a lot like an OPM agreement, just on a large scale.
I know I raise more questions than answers, but there are no “one-size-fits-all” answers available. You must include your faculty in your online efforts and think of ways to entice your star faculty to be fully involved. Beyond that, you must assemble the stakeholders and determine what you are trying to accomplish and what sets you apart from other institutions.
Once you have this information, you need to have candid discussions about what is possible and what you feel comfortable with as you choose strategy, both of educational and financial. Rumors of higher education’s demise are greatly exaggerated, but we are in for a wild ride.
How using modern eCommerce principles drives revenue in Continuing Education
Author Perspective: Administrator