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Challenges Faced by Traditional Schools Entering the Online Education Industry
University Business, Nov 2008

In the context of education, online learning is a “make-to-order” business whereas instruction through a traditional ground campus falls under the category of mass production. Applying this to business terms, online learning uses a “pull” strategy while traditional (residential) undergraduate education uses a “push” strategy.

With the realization that each unique customer has varying needs and desires for the purchase of a product or service, most businesses today operate under the “pull” strategy such as Dell or McDonalds. However, traditional education still operates under the “push” method. Statistics show that ninety percent of all incoming undergraduate resident students have the same needs, requirements, and educational expectations, lending to an academic institution's use of systems of mass production to satisfy these similar needs. The familiarity and success with this type of education system has made it difficult for most traditional colleges and universities to successfully enter into the market of online learning.

Adult learners make up the largest segment in demand and utilization of online education. As adult learners come with a unique set of challenges, most traditional schools struggle with the implementation of the “make-to-order” model to accurately and successfully satisfy these unique educational needs.

Expectations of an adult learner include the ability to have their education tailored around their needs - courses they can take when and where they want, and at a pace that fits their lifestyle. While the vast majority of incoming undergraduate resident students arrive straight out of high school (with the exception of some transfer students) adult learners come from a variety of educational backgrounds. While some may have any combination of previous college credit to transfer, life experience, or military experience, some may have no previous college experience at all. Each of these experience levels will need to be evaluated and formatted in such a way that it can be plugged in and used toward their overall degree completion.

If an educational institution only offering undergraduate programs decides to add graduate programs into their mix, the admissions requirements and entrance expectations for their graduate programs will vary from those used at the undergraduate level. While an institution solely operating a traditional undergraduate resident program may not experience drastic investment in making this addition--if indeed much change is needed at all--when offering online education the ramifications of such an addition could be quite significant.

In addition to education expectations, adult learners come from all walks of life with varying social statuses and options for securing payment to finance their education. These additional financing options often extend beyond the bounds of the typical financial aid model, and can include Military Tuition Assistance, Deferred Corporate Tuition Assistance, Employer Paid Corporate Tuition Assistance, outside scholarships, and institutional aid.

Throughout the process of online enrollment, an aggressive edge is key.

Pray, focus, execute...many schools cannot execute. In a traditional (residential) undergraduate model, the sales cycle used to turn a prospective student into a matriculated student can range from three months up to even two or three years, and often starts at the point when an individual first expresses interest in a college or education program in their sophomore or junior year of high school. From this point, numerous months of work ensue to cultivate this lead and build a relationship with the individual for potential enrollment. High-level phone sales skills aren't critical for admission counselors as campus visits; athletic programs, student life, and geography are usually the largest selling points for capturing an enrollment in the cycle.

In stark contrast to the tactics used in a traditional (residential) education setting, within the online education industry admissions counselors must be top-notch as they personally reflect your school's “campus” through their phone conversations. In addition, the duration of the sales cycle to move a prospective online student to a matriculated student is drastically shorter, ranging from a mere day to three months, not years. Admissions counselors (often referred to as agents) of an online education program place heavy focus on direct sales and must be timely, concise, and relevant when offering information and assistance during the admissions process because speed wins in the online market.

In addition to aforementioned tactics, agents of online programs need to create a sense of urgency for decision-making on the part of the student in order to move them forward from the prospective stage. Underestimating the important sales role played by agents in the admissions process, many schools make the mistake of using the same admissions staff that services their residential enrollment efforts to cross-sell their online programs. The adult learner's mindset, shortened sales cycle, variance in audience, and aggressiveness of the online education industry itself mandate a separate online sales or admissions team.

Just as important as the aggressiveness of the sales tactics used interpersonally through admissions agents, schools have to be ready to service the leads they generate on the back end. Multiple mistakes are made when schools launch an online program because internally they are not properly structured through the admissions (sales) process to service the leads purchased within their marketing strategy.

In addition to training skilled agents to address the difference in mindset when dealing in online education, the importance of developing a solid admissions infrastructure to support marketing efforts is just as great. Schools need to have a comprehensive “post-lead” strategy in place to effectively cover all media channels, such as phone, e-mail, and direct mail.

The same principle that deems the necessity of a separate admission or sales team when cultivating online leads (as opposed to residential leads) equally applies in the academic realm. Many resident programs are driven and controlled by academic committees and deans that often embrace an “elitist” type attitude. While not negating the great importance in offering a quality, student experience and assessing student learning outcomes, oftentimes a school can be governed by the mindset that believes that unless a student is sitting in front of a live faculty member, he or she is not learning. It takes a concentrated effort on the behalf of the school's leadership to be pioneers in education and break from the traditional mold of teaching. Hiring forward thinking faculty who will embrace the opportunities of online learning as an effective and modern education tool is crucial. Forward thinking can include incorporating the newest technology in the course format, introducing new programs that will have high market demand, and updating and revising current courses on a continuous basis.

Utilizing a separate adjunct faculty model for the instruction of online courses is also preferable and more effective than using resident faculty to teach both formats. Many adjunct faculties teach online courses for a living and their career, and are often more in tune with the online environment, their students' needs, and the unique challenges that can be faced when teaching from a distance. Constructing a separate academic structure for online programs can be the best way to accomplish and promote the highest level of quality instruction.

Data is everything: if you can’t measure it, don’t do it.

Many schools do not possess the expertise or the mindset needed to properly analyze and utilize incoming data. Whether tracking traditional or online enrollment, an internal data management team is key to achieving and continuing success. The director of data management is a co-pilot on the management team that allows the school to organize, analyze, and pull data in order to make decisions on the fly and with quick and effective turnaround. A large portion of an organization's future success is centered on the ability to make decisions based upon on solid data--not just a theory or gut feeling. In the online education industry, data management plays a vital role in allowing leadership to make quick and effective changes to stay ahead of the competition. The online education market is very dynamic, often changing daily. Effective and controlled data management provides the ability to change, manage, and most importantly, make educated decisions at the same pace that the competition demands.

The same fast pace seen in the sales cycle of the online education environment must filter down to support offices also servicing the residential student body. These crucial offices comprised of the Registrar's office, financial aid, and student accounts all have to be ready to turn student enrollment very around quickly. Schools can have a great marketing plan, highly skilled sales agents, and a comprehensive post-lead strategy, but if financial aid or the other support offices are bottlenecked producing a slow turnaround time, student frustration and attrition will ensue. While streamlining each of these areas for efficiency is often easier said than done, it is crucial that schools address this issue as the rate of growth can be stymied.

When examining online education and the extensive possibilities it can provide, school leadership must see the whole picture and avoid the easy trap of focusing on or fixing one area and then moving forward with high expectations. Marketing and lead generation are important, the sales force is important, the post lead strategy is important, the academic mindset and assessment process is important, back-end student support offices are important, and the data to analyze each of these areas is absolutely critical.

The rate of external change should never exceed the rate of internal change.

As a whole, the education industry typically is slow to change, adopt new ideals, or embrace forward, out-of-the-box thinking. We all know that businesses have to change quickly to keep pace with the ever-growing demands of their customers or they face losing market share. Education shouldn't be viewed any differently. Although it is not commonly popular to refer to students as customers or to view other schools as competition within the realm of higher education, this is the reality regardless of which terms you may choose to embrace.

School leadership needs to recognize the extensive value of starting an online division - a potentially larger alumni base for future giving, a feeder program for their residential campus, larger profit margins then residential programs, fewer infrastructure demands when expansion is called for with increasing growth, and the availability to branch into alternative revenue sources such as certificates or a grade school academy.

For-profit schools have a far better understanding of the value of online education than nonprofit, traditional (residential) schools. Leadership at the traditional institution has to be willing to implement changes to the current structure and culture to create the dynamics necessary to be successful in the online market. Brand loyalty in the online market is far less than it is in the traditional residential model. The ease of changing schools when enrolled online forces schools to quickly address changes to student needs or else run the risk of losing those students.

Ronald Kennedy is executive director of Distance Learning and Graduate Studies at Liberty University (Va.).

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