Feb
9
Many new industry analysts fear the big name non-profits can take over the online space!
- February 9th, 2009
They fail to realize that there is more to it than brand! Yes brand is important, brand is expensive, but whats most important is the business process. The strong for-profits have the process down to a science or an art. The non-profits are so far away from instilling the cutting edge aggressive strategies which the for-profits have mastered. In addition, most of them do not have the willingness to change they way they think, the way they operate. Thus, until the business processes of the non-profits become more progressive, they will continue to lack the punch necessary to hang with the professionals. We conducted an interesting study between the UoP and a non-profit regionally accredited online school, the results were astounding.
Not, so sure, I agree they dont compare as to the business processes or agressiveness, but their brands should allow them to have a significantly lower cost per lead/marketing cost. Thus, they don’t need to convert as well. My real fear is if/when they partner their brands with a forprofit mentality and/ or partner, then they will be a strong competitor.
It’s difficult to have an opinion without knowing more about the differences you refer to in your statement “We conducted an interesting study between the UoP and a non-profit regionally accredited online school, the results were astounding.” Is it possible to read the study?
Thanks
Glenn
I am a former Wall Streeter and, since 1974, an entrepreneur. I have been involved in the for-profit education sector since 2001, and currently am CEO of Andrew Jackson University, so I see both sides of the street. I also speak to analysts quite frequently, and I am impressed by very few (Trace Urdan, for one, gets it). Their attitude re “who will control online” is similar to analysts’ guesses back in 1999 when their expert prognostications predicted that the big ad agencies would dominate web design, development, and programming. The big agencies missed the boat, mainly due to their culture. The same is happening with the big non-profits, in my opinion. The big non-profits, with the exception of the premier brands (Harvard, Stanford, etc.), are being “found out” as the media is blanketed with stories of high costs and low quality. I could go on and on, but time is too valuable to write more.
How about publishing the results of the study….
By the way, I’m working right now with two major traditional universities and their online initiatives. Let’s pose the question: If you could choose between a well known traditional university that had the processes down and UOP/Kaplan/DeVry/Career Ed/etc, which would you choose?
I would publish the study if I could… we were asked to conduct the study by the non-profit and thus they own it. However, what was learned was clear. Without question if I were to be selecting a school for myself I would go the route of the traditional vs. for-profit. I would shop around and choose what I believe to be the best choice for me. However, I do not represent the masses, in fact and with regard to the significant majority of the internet lead flow, the decision process is a quick one. The vast majority tend to swing to the schools that make the first “good” response and establish a relationship connection. Often, the non-profits are just way to slow in responding and create too many hurdles to enroll. Now to be clear, it is in their model to be selective and thus they tend to lack the “sales” aspect which helps to push the enrollment decision.
I would like to see your study too. Although I can probably guess what the traditional school was doing differently! I agree that the brand is a strong element, but when you are competing in the world of for-profit schools, you need to be a fierce marketer and have a strong response team.
I am at a large for-profit who 18 months ago offered marketing services to a mid-size traditional university. We now generate a third of their yearly student enrollments — and our students are all online. Believe me, the traditional schools could take the online market if they had the skills and the vision.
I think the biggest obstacle for the near term is the fact that traditionals are still largely faculty-focused as opposed to student focused. This isn’t as big a deal when you are an undergrad, but as a working professional looking for enhancement via a degree it can make a difference. As more for-profit grads go into management, then newer for-profit grads will benefit from their lack of bias regarding the school name. I agree with a few of the other comments however in the fact that if traditionals decide to outsource many of the marketing/admissions functions to those in for-profit areas, they could make great inroads.
A mentor of mine, a school President of a for-profit school, once said that for-profit schools should be wary of the day the sleeping giant awakes. He meant the traditional 2 and 4 year State Colleges are well tooled if they so choose to commit to winning in the online world. I think he is right and the recent online initiatives launched at the University of Illinois and Colorado State University show that the market is beginning to change. They have the brand, the State support, the Employer credibility, lower tuition, etc.
Can you not derive from your study a statement of the principles which govern the not-for-profit and for-profit space, and what the industry defacto standard ratios are? It would make a great discussion point.
Thanks
It’s in the blood of for-profits to make money while traditionals have many other “distractions” and politics to tend to. I guess it can be said that they “can” take over this space, but will they or is it their objective?
I also would not consider a for-profit school for myself and I don’t necessarily think I’d be incorrectly biased by preferring say a U of Arizona grad over a U of Phoenix grad. Not to start a war here, though the admin may get a kick out of it, but going to a for-profit like Phoenix is the easy way out. What % of the top 50% of graduating HS seniors prefer for-profits vs. non? What’s the avg. SAT/GMAT/GED score of a for-proft candidate vs. a traditional school candidate? What average experience and qualifications does a professor from a traditional school vs. for-profit obtain? What kind of academic, social, and cultural lessons can a for-profit provide compared to a traditional? Hmmm… Can they provide the almuni networking post graduation as say a Michigan or U of Florida? No, they cannot.
And why not just take the safe, more well-respected route of going traditional than going for-profit and “hoping” that employers don’t have a bias towards you, or wait a generation or two and hope that the bias is either reduced or completely vanished.
Do I sound too elitist or Republican? Or just realistic?
Having devoted most of my career to working in the for-profit sector, and the last ten years or so in online learning, I think one point is really important to remember. Community colleges have been major providers of online/distance learning for a very long time. And they are growing. It’s just not quite as simple as for-profit vs. non-profit (I hate even typing that). And, in recent years, all of postsecondary education has become noticeably more oriented toward career education, which was the arena of for-profits for decades. As the costs of all postsecondary educatioin continue to rise in all sectors, the payoff in terms of income to the student when compared to costs becomes all that much more important.