Supply is up in online ed but demand is down — now what?
Colleges and universities must adapt to a new business model when it comes to marketing
Higher education marketing is more competitive now than it has ever been before, and it’s only getting worse.
The number of high school graduates in the pool of prospective college-goers is smaller in the Northeast and Midwest than it has been in recent decades. Yet the number of new post-secondary opportunities is growing. Supply is way up, while demand is either dropping or growing slowly.
Meanwhile, 70% of chief academic officers say online education is going to be a key pillar of their institution’s strategy moving forward, and demand for online education programs is growing at a slower rate than at any point in the last 20 years.
In a conversation about the growth potential of online higher education and the marketing challenges presented by modern competition on Higher Ed Live, Seth Odell, former associate vice president of integrated marketing at Southern New Hampshire University and current VP of marketing and creative strategy at Helix, joined Cornell University’s Ashley Budd, assistant director of digital innovation.
Budd highlighted the concerns of enrollment professionals who have been trying to get around the shrinking population of traditional college-goers for years. But online education is a dangerous place to look for salvation, given the trendline of demand.
“That’s really a scary reality,” Odell said. “If you’re turning to online education to solve an enrollment problem, it’s going to be a really difficult problem to solve.”
There are now 450 online MBA programs competing for students. According to Odell, graduate programs, more generally, are oversaturated in the online space. They’re easier and cheaper to launch because they require fewer courses so they make a more logical entry into the online world for institutions that are new to it. Colleges trying to fill a niche that is relatively untapped might instead consider undergraduate programs.
By some counts, nearly 45 million people in the United States have earned some college credit but no degree. These are often working adults who need the flexibility online learning provides to earn a credential. While it is expensive to get a full range of specialized undergraduate courses online, there is major potential in reaching this market.
And recruiting them is often a matter of inspiring prospective students, rather than simply informing them. While colleges and universities have traditionally marketed to students who have already decided they want to continue their education, Odell recommends getting in earlier with emotional advertising that convinces prospective students that it is time to return to school.
When it comes to marketing, colleges and universities are going to have to become more efficient, and word-of-mouth is likely to become increasingly important.
“There’s a level of commoditization that is happening in postsecondary education,” Odell said. “When there are 450 online MBAs, are you honestly going to price compare? You’re not. You have a really good chance of going on and getting overwhelmed. So what do we do? We turn to the people we trust.”
Institutions that used to enroll students referred by others just 10 or 15% of the time, now see their referral rates reaching up to 40%, according to Odell. He sees that trend moving in only one direction: up. That means an increase in the return of investing in the student experience and making sure students want to endorse their program to friends, families, neighbors, etc.
Marketing represents one of Odell’s primary concerns with competency-based education, which is currently being developed as a less expensive alternative to traditional higher education. When it costs the same amount to recruit students to a CBE program as an on-campus program, but the institution charges less for the former, programs either lose money or have to cut back on student services. Neither scenario is a good one, and colleges will have to figure out how to reconcile this problem for long-term sustainability.
As colleges and universities rethink their marketing strategies for a changing business model, Budd points to one critical need: executive-level attention.
“If you have marketing buried seven layers beneath your campus grounds, there’s no way to move that conversation forward,” Budd said. “It has to be at the top.”
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