I recently came across a June 2016 article in The Atlantic magazine on online program managers (OPMs), and how much money they are making from marketing student enrollments in the USA.
OPMs offer Colleges modern marketing tactics such as websites that collect information to generate marketing leads, text message follow-ups to inquiries, and phone banks with ambitious “career counsellors” ready to help students complete financial-aid requirements and enroll.
Five companies reportedly control about half of the $1.1 billion OPM market:
- 2U, Academic Partnerships
- Wiley Education Solutions.
A 2014 profile in Forbes reported that Academic Partnerships:
- scored $100 million in annual sales
- by taking 50 percent of tuition revenue
- from the 82,000 students it had placed in online programs
- across 40 virtual campuses at public schools such as the University of Texas at Arlington and Florida International University.
The article suggests that non-profit schools (including public schools) spend an average of $38.53 for a lead – just for the name and information of someone who may be interested in attending their school. It costs more than $380 to turn that lead into an application and more than $2,200 for every student who actually enrolls.
John Katzman founded one of the most successful OPMs (2U – worth more than $1.3 billion). Katzman now disagrees with the practice of tuition-sharing, and sees a new OPM model taking hold. His new company, Noodle Partners, is an OPM that uses flat fees-for-service instead of tuition-sharing.
Whether you believe the current tuition-fee sharing model will continue, or a new flat-fee based one will replace it, rather depends on whether you think Colleges have a chance of doing some of this successfully by themselves. They should, as its pretty core to their business and losing 80% or even 50% of fee revenue outside of the organisation is not sustainable.
So what’s stopping Colleges being their own OPMs
There are four “ducks” that need to be lined up in a row:
- Course Engineering and
Business – senior college managers and leaders need to resource a program of institutional change, wholeheartedly. They need to resource and commit to a new business plan that can validate the key new developments in revising program delivery practices, to include the new online education ones as well. This is hard, because often senior academics are not promoted on the basis of their business acumen or change management skills.
Education – senior academics need to learn more about distance learning (which a lot of good online learning involves). This too is hard, because distance learning thinking is not core to most academic departments or academics. Even experienced distance learning departments are struggling with the latest online learning technologies and pedagogies, and their apparent expense and complexities.
Course Engineering – producing twelve or fifty good quality, online distance learning modules is an engineering task, involving a team of multi-skilled individuals developing and maintaining hundreds of course components and multiple delivery formats.
Administration/Support – try introducing a customer-friendly 3-minute online student enrollment process to your institution, and see what resistance it meets. How can you offer regular examination diets to students around the world, that aren’t tied to your time zone, season or academic calendar.
There is value added in marketing and sales, but only if colleges fail to leverage their own reputations with good quality, flexible, online product offerings.
Leverage what you’ve already got; get ready to change things; learn to treat all your students as distance learners; get your 4 ducks in a row; and become your own OPM.
Do the first one with us because we’ve done it many times before.
It will take some time, but keep the money in-house and invest in a permanent new capability and set of flexible learning assets for your institution to own and cherish for the next 100 years.
It takes a conductor to bring out the best in an orchestra. Consider using CAPDM for your first, popular arrangement.
- The Atlantic article about the OPM market
The discussion on this OPM issue:https://www.linkedin.com/groups/2444806