Over the last few years, there have been dramatic shifts in the world of higher education. Changing economic landscapes, the evolution of online learning technologies, and the emergence of for-profit colleges have turned higher education upside down. High quality public and private educational institutions have been scrambling to figure out a way to compete in the ever-evolving education landscape while still upholding their academic integrity and keeping their brands intact.
As public institutions continue to see their budgets slashed and private institutions struggle to bring on enough students to keep their colleges alive, online degrees have emerged as a possible revenue-generating solution. But simply taking programs that exist on-campus and launching them in an online format isn’t enough and can sometimes put universities further into the red. An exhaustive process of analyzing the competitive landscape as well as program demand must be undertaken in order to ensure a program’s success. The world of online education is already overly saturated with programs that have been launched by universities looking for a quick fix to a complex problem, but little focus has been paid to what potential students actually demand.
But it is not all gloom and doom; there are many individuals out there who view a high quality online degree program as a fantastic alternative to a more traditional on-campus option. The world of online higher education is growing, and will continue to as larger brands move into the market, online learning environments evolve, and online degrees continue to become more socially acceptable. Introducing a degree program online is a big decision, but the following guidelines can be useful in determining the potential opportunity of a program.
Elements of a Successful Online Program
1. Is the Degree and Are Graduates In Demand?
This is a basic way to at least tell if there is a market for your program. This should be the very minimum that is required if you are looking to launch a program online, but should not be the sole criteria. There are many different resources that will tell you whether or not a type of degree or graduate is in demand, but unfortunately much of this is based on job or career projections that have not happened and will not for at least a handful of years. There are some resources that you can review to gauge the career demand for your graduates, but remember that these are estimates and projections based on what is going on right now (back in 2006, getting a real estate or finance degree was a great idea).
- U.S. Department of Labor
- U.S. Department of Education
- Bureau of Labor Statistics
An important and sometimes overlooked way to understand whether a program is in demand is by reviewing the search volume (Google Keyword Tool) for keywords associated with your program. For example, there are 5,400 local monthly searches for the keyword “masters in public health”, but only 880 for “masters in public policy”. While not exact, this would infer that there are approximately six times as many people searching on the Internet for a MPH over a MPP. The keyword tool is also useful for deciding what to name the program (don’t get creative, it will just confuse potential students).
Another obvious way to understand whether an online program is in demand is to look at your recent graduates from your on-campus program (if one exists). Are employers chasing them?
2. Is the Potential Online Degree Program Unique?
Unfortunately, in most situations, if the degree you are looking at launching is in demand then the market is most likely already saturated with less than desirable universities offering a similar program. There are thousands of different degrees available on the Internet, so how are you going to stand out from the rest? Unless you work for a university that has an extremely recognizable and well-respected brand, you are going to have to work at communicating the value of your program to potential students. Some of the following might help to separate your program:
Curriculum: Is there something unique about the curriculum that can really benefit certain individuals? For example, if you are launching a Masters in Information Systems, does a course focus on a specific technology that is in demand but not covered by other universities? Do professors that are well known in the industry teach the courses?
Accreditation: This might sound basic, but you would be surprised how savvy potential students are when it comes to accreditation. This is a good way to separate yourself from much of the competition, especially if you are a smaller brand. It is never a good idea to launch a new unaccredited program in a competitive field.
Ranking: Is the on-campus program ranked in any way? Has the program been recognized by any industry leaders or large organizations? These can go a long way in separating your program from the competition.
Concentrations/Focuses: One way to cater your degree to specific audiences is to offer different concentrations or focuses that are relevant to your core students demands. For example, if you are looking to introduce a Masters in Internet Marketing, you could introduce concentrations in Social Media, Search Engine Optimization, or Pay-per-click.
3. Does the Potential Program Have a Defined Target Audience?
Unless you have an extremely strong brand, or offer a degree program that cannot be matched by any other institution, it is going to be very difficult to compete in a market that has a broad audience. For example, if you launch an Online MBA, when marketing the program, it is going to be hard to find the specific audience that is interested in your program over a competitors program .
Facebook and LinkedIn advertising have also enabled marketers to create custom audience segments, which in turn has produced a cheap way to drive highly targeted traffic. For example, if you introduce a Green MBA program, you might be able to craft custom audience segments that target individuals on Facebook who are interested in green technologies and renewable energy. Rather than just relying on individuals who are searching for an Online MBA (estimated Google CPC of $60), you can drive potential students to your site that are already interested in Renewable Energy for $2 per click.
4. Is Launching the Program a Bargain for the University?
At the end of the day, the potential income generated is going to be a major deciding factor as to whether or not to launch a program. Obviously you need to figure out how much money you are going to spend (expenses), and how much you can bring in (revenue) to figure out the potential income from a program. But how are you going to figure out how much an online degree can generate?
We are going to take a quick look at the basic costs associated with marketing the program from an Internet advertising standpoint. The first place to start is to figure out how much it’s going to cost you to generate a lead.
Most likely you are going to need a savvy Internet marketer who is familiar with the higher education industry to calculate that for you. The education vertical is one of the most competitive on the Internet, so relying on someone who is not familiar with the industry is generally not a good idea. This individual will calculate an estimated cost per lead by looking at estimated cost-per-clicks, keyword volume, audience segments, and conversion rates across multiple different traffic sources. These numbers can fluctuate wildly (some keywords cost $50+ per click), and many of the future articles on this website will provide best practices on how to squeeze the most out of your marketing dollars.
Once you have determined your cost per lead, you need to figure out what percentage of those leads will become students. This number can also fluctuate wildly depending on multiple different factors including number of starts, brand strength, cost, and financial aid.
So let’s say your estimated cost per lead is $120 (about average for a medium competition degree with a relatively strong brand), and you are able to close those leads at 2%. That means it will cost you around $6,000.00 per student, just considering the expenses associated with driving traffic. This does not include various other fixed costs such as web design, and hiring other individuals that will make launching an online degree successful (internet marketers, student advisors, copy writers, online savvy professors, etc.).
Someone with a solid finance background is going to be needed to provide more accurate calculations, as the above is just a basic calculation of the marketing needs. One other factor that is extremely important in determining the revenue per student is your projected retention rate (if half of your enrolled students drop-out, that’s going to kill your bottom line).
5. Is the Potential Program a Bargain for the Student?
One of the major deciding factors as to whether an individual will enroll in a program is how much it costs. This might seem obvious, but universities sometimes don’t take this into consideration when pricing a program. People are becoming more aware of the dangers associated with debt (especially student loan debt), so making sure that your program is priced competitively is extremely important.
Introducing a program in which employees of certain companies get tuition reimbursement is also worth looking into. Unfortunately this is somewhat hard to gauge, especially when the online program might not be launched for another one to two years, but is something to keep in mind.
So is My Program a Good Candidate for an Online Format?
There are many factors that influence whether or not a program can compete and be successful in the online marketplace. While sometimes it can be hard to project the opportunity surrounding a program pre-launch, there is research that can be completed that will paint a clearer picture as to what to expect. As long as the program looks to be a strong candidate from a marketing, recruitment, and retention standpoint, the program is most likely at least worth an initial market test.