The coronavirus pandemic has created a perfect storm in the higher education industry. How an institution responds now, in the weeks and months ahead, will establish the course of their future. Some have very few options for survival where others, if they set the right bearing, can position themselves to not only weather the storm but also flourish in the long term.
This is the third in a series of posts that are focused on mitigating the financial hardships that you may be facing, both short term and long term. In this post, we make an observation from outside of Higher-Education, which we believe provides some encouragement that, with an appropriate response to the challenges resulting from the COVID-19 shutdowns, you can expand your market, increase profitability, and enhance student satisfaction. While not necessarily easy, it is also not necessarily hard other than some difficult priority decisions that will likely need to be made. But, as we asked at the conclusion of our last post, how important is it that your mission survive and thrive? Is it important enough to reshape the institution? Or is preservation more important than fulfilling your mission?
Most of us have been affected in one way or another by the forced closure of restaurants due to the Covid-19 crisis. Many restaurants decided to shut down completely. Others quickly put together an online-ordering and pick-up service. At first, those restaurants that put together a pick-up service were pleading with the market to support them through the crisis. But now, at least in our area, those restaurants may be doing better than ever. It is hard to tell but they seem a bit overwhelmed as orders are typically 30-90 minutes late, and many people are waiting outside or in their cars for their orders to be filled. Perhaps it is just that these restaurants haven’t yet been able to align staffing and resources with demand. But possibly it is that they suddenly have huge order volumes from an expanded customer base that can no longer go to the restaurants that closed.
Bear with me, I am going to transition this to Higher-Ed.
Whether unintentional or not, those restaurants that put together a pick-up service created a new market opportunity for themselves. Certainly there are restaurants that have had a take-out or delivery service for years. Pizza parlors come to mind immediately. Yet one of the outcomes of Covid-19 is that many people have enjoyed being able to drive to their favorite restaurants, have the food they ordered online brought to their car, and then take it home, or to a park, or to a picnic table beside a beautiful stream, or a myriad of other experiences. Certainly the food is just as good, and sometimes better.
The question is, can those restaurants handle a pick-up business long term? Staffing, resources, and facilities must align with demand. And the time for them to position themselves for this expanded opportunity is now. Their challenge is to make the experience great by eliminating late pickups so that once seating is back, they retain their new customers, and continue to expand their pick-up customer base. Not all restaurants will pull this off. And some won’t have the vision for it. But those that do will almost certainly erode the business of those that don’t.
Similarly in Higher-Ed, there is a new market opportunity for those that respond appropriately to this season resulting from COVID-19. Most institutions have scrambled to move their spring and summer semesters online, which deserves a huge round of applause. And the fact is that, whether unintentionally or not, they have teed-up an expanded market opportunity that is additional to their current program. Market demand for online programs will be larger than what we’ve experienced in the past, though online learning has always been a good growth strategy. However, in the same way that the food in a restaurant pick-up service must be as tasty and reliable as the food served inside, online education must be as excellent as the academic education delivered on campus.
Currently online learning is viewed as a lower quality education than campus learning – not only by the market but by the institution itself. We acknowledge that campus life, like seating in a restaurant, has its own experience. We agree that participation in residential life and campus activities are valuable learning experiences. But now more than ever, there will be a segment of the market interested in online education. In fact, we could go so far as to foresee a day when online education might be part of a degree-plan for residential students. Which means it is incumbent on Higher-Ed to make their online education as excellent as the academic education on their campuses. And, frankly, with the technology that is available now, there is no reason why this cannot happen other than emotional ties to a particular form of education. We believe this season has demonstrated that education, communication, relationships, and retention can be as effective online as on campus.
Don’t misunderstand, we are not saying that in-person relationships are not needed, or that they are not more important than virtual relationships. We are simply saying that there is an increased market-demand for quality, online education. And that we believe it can be achieved. However, it will require consideration of new models for pricing, collaboration, and service.
Pricing:
If you look again at the restaurant industry, they don’t charge less for pick up than their regular menu. The food is the same and they charge the same. Higher-Ed has the same opportunity, but they must make their online education as excellent as the academic education on campus. They must be the same. Right now the market perceives that online education is lower-quality than what is delivered on campus. As a result, they want a lower price for it. So institutions must communicate effectively and aggressively to the market what they have done to make their online education on par with the academic education on campus. Certainly there is a window of opportunity now to communicate the “changes as a result of lessons learned from the Covid-19 shutdown.”
Collaboration:
Online education opens up some new, productive opportunities. By establishing collaborative models with other institutions, cohorts can be shared – i.e. enrollment in a cohort can be made up of students from different institutions. That means institutions can charge tuition for courses that might otherwise have had insufficient enrollment. In addition, curriculum can be shared across institutions, or taught to another institution’s students, both of which are opportunities for incremental revenue generation. Conversely, if you have demand for a particular course or program that is unavailable in your institution, you could potentially utilize the curriculum, or participate in the cohort, of another institution. That seems like a more palatable solution than losing students in today’s tight market.
Service:
As discussed at length in our previous post, the long-term viability of online education, and education overall, requires that colleges and universities adopt a high level of automation. In our opinion, this is the most important strategy for the future because it aligns the costs associated with student services and campus operations with market potential and new pricing models, and increases student satisfaction. Important areas of attention include student self-services, virtual one-stop shops, and automated operational functions that minimize necessary staffing levels. For more information, please read our previous post or contact us directly if you would like to discuss your particular situation.
Automation is the key to making your institution financially-stable and competitive over the long term. Unfortunately, no different than the restaurant business, not all institutions will act on it. Some won’t have an accurate vision of the future. Those that do will almost certainly attract enrollment away from those that don’t.
We strongly recommend that you consider pausing any major projects that you had planned for the remainder of this fiscal year and next fiscal year that don’t relate to automation, and instead prioritize the automated systems and services that will secure your future. At the same time, we recommend that you utilize lessons-learned during the spring and summer semesters to make your online academic education excellent, and communicate that urgently and effectively to the market.
If you would like an automation-assessment of your institution, to give you a comprehensive and accurate reading of where you are at, along with recommendations of what you need to do with associated priorities and timelines, please contact us. This is one of our specialized core-competencies.