Stoffer's Soapbox

Marketing Education: Inside out or outside in

There are two extremes as to how market a school, which I'll call "inside out" and "outside in." "Inside out" is to build an incredible reputation, open the doors and select which students you want to come in. "Outside in" is to spend direct marketing dollars to buy Internet leads and reach out to potential students via either inside sales or fields reps. Inside out requires a larger investment in business development and career services while the outside in model requires more investment in upfront marketing and admissions.

A great example of "Inside out" marketing is the Parsons School of Design in New York. In addition to the publicity from Project Runway, Parsons lures students with the opportunity to work with some of the premier design firms in the field. A list of projects on the Parsons website includes designing a new watch for Fossil, designing a line of accessories for Vespa, working with Chanel, Hermes and Saks. This pdf is an impressive summary of the opportunities Parsons gives its students. With these opportunities, students flock to Parsons without a great deal of marketing investment on Parsons part.

The alternative means of drawing in students - the "outside in" model - is via direct marketing and lead gen. A school runs local TV or engages lead vendors for Internet ads, generates "leads" and then calls those leads from a call center. Speed to contact and the skill of the admissions advisor are primary differentiators under this model. From 2000-2005, this market was dynamite for the for-profit early entrants into the online post-secondary education market.

Schools never fall strictly in the camp of "outside in" or "inside out". Even Wharton visits dozens of cities around the world each year to recruit students. But, as the market continues to become more competitive, for-profits can no longer rely too heavily on the "outside in" model. You see this with UOPX buying naming rights to Arizona Stadium, UTI's partnership with Nascar and other industry players increasingly trying to differentiate their brands. A generic IT/business program and a killer direct marketing model is no longer enough, unless it is paired with true brand differentiation.

MIT Admissions Head Resigns

Of all people, you would not expect Marilee Jones, the MIT Admissions head, to resign due to falsifying academic credentials. At MIT, Jones created the most technologically savvy admissions website in the industry, making liberal use of blogs and web2.0 technology to give potential students ways to learn more about the school by interacting with current students, faculty and staff. Moreover, she was a leader in urging today's children to look beyond the rat race of the college admissions process. In doing so, "She rewrote MIT’s application, trying to get students to reveal more about their personalities and passions, and de-emphasizing lists of their accomplishments."

With Jones gone, we need more leaders to carry the mantle for what Jones stood for: developing well-rounded young adults and using technology to help potential students understand their school options

What is particularly sad here is the erosion of trust this propagates. It is an unfortunate statement on today's state of affairs that employers need to verify every degree and professional experience an applicant has had. I prefer to trust people at their word - but in today's world it seems this is a dangerous thing to continue to do.

Marketing 2.0: Education Providers Need to Get in the Game

This post from Andrew Chen, an entrepreneur-in-residence at Mohr Davidow, explains what he calls "10 obvious strategies" to acquire users. These strategies are not so obvious to marketers outside Silicon Valley. To illustrate, I challenge you to go to a marketer at any post-secondary online education provider and ask them the top 10 ways they drive potential customers to their website. It would be buying from lead vendors, adwords buying, email recircs and - I'm drawing a blank. They don't even have 10 strategies. Any for-profit educator that formulates a strategy to successfully leverage social networking, blogs, and Internet viral marketing tools will zip away in a Ferrari, leaving their Model T driving competitors in the dust.

10 (obvious) strategies to acquire users

1. Email/IM features for invites and content
2. Blog/MySpace widgets
3. Auto-invite for email, social networks, etc
4. Auto-embed for blog widgets
5. A/B tested signup pages
6. Smart adwords buying
7. Viral referrals
8. SEO/landing page generation
9. Push through RSS/Email, etc.
10. Reduce user "drag" through the entire funnel

Future of Online Education

I read a real visionary piece on the future of online education in a recent Education Signals newsletter. It is a summary of remarks at a recent education conference by Gary Keisling, chairman of Ashworth University, a for-profit backed Sterling Partners. Keisling has 20 years of for-profit education experience and gave a talk titled, "€œNew thinking in for-profit education models to advance cutting edge investment strategies."€ He described the career college of the future, the school he might build today if starting from scratch. Highlights include:

•  Delivery, outcomes and branding of education over the next 20 years will be much more than a simple reflection of old systems and more aggressively influenced by trends in technology and Internet socialization.
• Embracing Web 2.0 principles, including community, low cost, no censorship and individuality enable a new model for education.
•  Internet socialization will be facilitated and encouraged by the school and online and on-ground content will be completely equal and completely blended at the students’ discretion
•  The current system in which the cost of postsecondary education rises rapidly ahead of the pace of inflation, leaving new graduates tens of thousands of dollars in debt would finally collapse on itself and turn the current concept of brand embodied by a paper (?!) diploma, on its head.
•  The generation that grew up with Web 2.0 and MySpace as the norm, will reward models that focus on results-based learning and job attainment over a brand on a diploma.
• The new model will allow flexibility in curriculum design, and even a menu-based curriculum that will offer more choice in course selection.
•  Costs will be radically lower with revenue and profit generated far more through add-on services and third-party relationships (think of UTI’s company-sponsored graduate programs applied to other fields).
•  There are opportunities to focus on underserved niches: Hispanic market, retiring baby boomers and people seeking very strong career placement tools & capabilities
• The school would develop consortiums with other schools to share leads and gain leverage
•  One of the school’s major focuses would be negotiating articulation agreements and speaking out in every possible forum about credit transfer issues.
• Low cost programs will free schools from outmoded regulatory burdens and new arbiters of quality and value will emerge to replace the old systems.
•  One example could be instruction in multiple languages, multiple states, and even multiple countries all currently tightly controlled.

Colleges Must Embrace User-Generated Content

A lot of colleges (especially for-profits) are scared to leverage new media like YouTube, blogging and social networks, out of fear that they do lose some control of their marketing message. A typical administrator's comment is "What if someone writes a slanderous comment or what if a current student or faculty member bashes the school." What they fail to realize is that if their product is of high quality and they have an enthusisastic customer base, there is very little to fear. Check out this video on YouTube, it's a parody of UOPX and pokes fun at the school's marketing, accreditation and student body. What is most interesting to me is not the video but the comments to the video - some are ignorant, but UOPX's supporters present the other side well, giving viewers a very balanced view.  Two sample comments are "I don't believe Randy was referring to UoP's Business Program Accreditation. UOP is Regionally Accredited like most other legitimate schools." and "This is a waste of time, ill-informed, ad hominem attack with no basis in reality. Though I am not in any way affiliated with the organization slandered, it is clear that the makers of this clip lack the basic understanding and integrity necessary in assessing the value of well accredited distance learning programs." Instead of just responding to attacks, schools should start to use web2.0 to their advantage to create buzz, enhance brand value and generate leads organically.

Chinese Post-Secondary Education Company CIBT Closes Round of Financing

Congrats to Toby Chu, a trailblazer in bringing for-profit education to the Chinese market, for closing a $5 million round of financing with the private equity firm Camden Partners. I have met Toby several times and he is the perfect person to bridge the gap between Western and Chinese culture to help eventually create a sizable for-profit education market in China. He already has a great start - his company, CIBT, operates four campuses in Beijing, two campuses in Weifang, one campus in Anyang, and six learning centers in other cities in China. He also offers curricula and joint degrees with U.S. based institutions like WyoTech (division of Corinthian), ITT TEchnical Institute and Western International University (division of Apollo Group).

Second Life: Should Colleges Jump on the Bandwagon

Ohio University, Art Institute of Pittsburgh and other schools have recently devoted a large amount of marketing and web development resources to extend their campus to the online virtual world Second Life. Click here to check out Ohio Universities' Second Life "campus". I agree that these efforts certainly do help these schools present themselves as hip or cutting edge. It also allows the schools to reach a base of tech savvy users. The game Second Life has 2 million users, up from 95,000 a year ago. The average age of users, surprisingly, is 33.

The branding benefits of Second Life are clear - but if schools expect to get a wave of new  students solely from marketing via Second Life, I think they are sorely mistaken.For one, there are 2 million users, but how many are "real"? I signed up just to check it out and I have never logged in again - I bet a lot of these users are like me. Secondly, how many users are looking to peruse online schools, given the sheer number of activities one can pursue in Second Life.

What Second Life should be is a nice addition to a holistic new media marketing strategy. Potential students should be given the opportunity to interact with a school via their communications channel of choice. This medium could be by subscribing to student and faculty blogs or podcasts, interacting with students on a social network for that school, visiting the school's Second Life Campus or more traditional approaches like taking a physical or virtual campus tour or reading online student/faculty profiles.

My Work Unveiled: Launching New Online Design Programs

I can finally share with readers one of several high impact projects I am working on. My employer, Career Education, announced on its earnings call the coming launch of online delivery of programs at its IADT design schools. I believe delivering quality design programs online is an underserved niche and I have headed up efforts to craft an operating model - primarily in marketing and admissions - that is unique in for-profit education. As we launch the website, announce programs and open up admissions over the next several months, I will be excited to share our efforts with all of you.

University of Illinois: Haphazard Plan for Online Learning?

The financial plan for the University of Illinois's for-profit virtual campus is aggressive, calling for a profit of $27 million in its 5th year of operations, according to an article in the News-Gazette.

• Assuming a net margin of 20%, estimated year 5 revenue would be ~$135 million.
• This would mean a year 5 student population of ~7,500 students if revenue per student was $1,500 per month ($18K annually).

In today's competitive online learning environment, the school's plan seems overly aggressive . In the third year of operation, the cumulative loss could reach nearly $16 million, according to the financial plan. There is no reason they can't ramp marketing slower and have a lower burn rate to achieve profitability.

In addition to the financial plan issues and difficulties garnering faculty support (see my post on this), the school seems to be taking a somewhat haphazard approach to crafting its business plan. Rather than bringing on an experienced leader with a vision, they seem to be using a hodge podge of consultants to craft a vision while simulataneously looking for a chief marketing executive. The consultants include Compass Knowledge Group of Orlando, Fla., at $29,000 to assess the market for online nursing degrees - I have no idea why you need a consultant to do this - all you need to do is look at government published data for nursing degree growth and speak with large health care providers like Kaiser Permanente. Other consultants include Pamela Pease of Santa Fe, N.M., a former president of the online Jones International University ($83,500 contract through June) and Eduventures ($38,000 contract to assist with planning and marketing).

Most importantly, rather than pushing ahead aggressively with a rather haphazard plan, UI must work harder to build consensus amongst its constituents and find a plan that works for faculty and students without eroding their existing brand.

Top 100 Education Blogs

OECD just released a list of its Top 100 Education blogs. Unfortunately, the two month old Stoffer's Soapbox was nowhere to be found :(

Next year, I'm crossing my fingers it will be there.