What’s your plan for extending your degree programs’ life?
I bring this up after hearing a colleague share the following with me.
We launched this program about 5-years ago when there were no other similar programs in the area yet there was significant job demand for graduates with this degree. And since demand was high and supply was low, we priced the program accordingly.
In the first two and a half years, we saw enrollments exceed projections. Profitable revenue from this program was crucial and helped keep other programs alive.
But then the other colleges and universities in the area started launching their own programs. Today, there are 13 other programs available in our market. And all are priced lower, some by as much as $10,000. Some of the competitors are bigger than us and are viewed as much higher quality than us by the people in the area.
Over the past 6 semesters, we’ve seen enrollments drop by more than 30% and we’re spending more money on recruitment.
Options for Extending Your Degree Program’s Life
Welcome to the Maturity Phase of your program’s life cycle. Hopefully, you have identified opportunities for extending your degree program’s life before performance falls dramatically – but just in case, here are some viable options to consider.
Revamp the Program
You can modify the program, focusing on new features that offer unique value so you can differentiate your program from the crowded field of competition. This approach helps build awareness and interest and desire for the program and could allow you to keep the price at or near current levels.
The challenge here is that most people panic when they realize the heady days of the growth cycle have passed, and now things need to change. The first response for many is “cut costs,” so investing in the program can be seen by some as “tossing good money after bad.”
This approach requires some financial forecasting and models that project the possible impact on enrollments and revenue when you lower your price.
The obvious challenge here is that most people dislike sacrificing the per enrollment revenue and overlook the benefit of getting something rather than nothing. The other issue is producing a realistic model and focusing on realistic scenarios. Typically an overly optimistic scenario is selected, which doesn’t pan out, leaving the institution and program in a continuous state of panic. With that in mind, I strongly recommend using three scenarios – optimistic, realistic, and pessimistic – and developing action plans for each. Then as actual results come in, you can turn to the appropriate course of action.
Target New Markets, Audiences
Expanding into a new geographic market or targeting a secondary audience in the current market you serve are also viable options. However, it’s important to remember that when you expand into new geographic markets ramp up, you are typically facing lower awareness and different competitors. The first usually means higher marketing expenses to build awareness and interest, and perhaps a ramp-up time because of it.
The second typically means you need to do some research to understand their strengths and weaknesses so you can develop the appropriate strategies for that market. After all, what works in your current market might not in the new market.
As for targeting a secondary audience, be sure to have a strong understanding of their wants, needs, expectations, perceptions, decision-making process, and criteria because they may require new services or new marketing efforts to recruit, enroll and retain them.
Different Formats, New Locations
You could offer the program in various formats if that is still an option. And you can explore new locations within your existing market, so you reach more of your target audience.
Again, these require some research to ensure there is demand for the different formats, and to identify high potential locations for satellite campuses. And with satellite campuses comes additional expenses that you need to determine and factored into your decision.
My colleague that I referenced at the start of this article has a lot of work and some difficult decisions to make. They entered the market at an ideal time and were able to charge premium pricing while enjoying rapid growth. But those days are gone thanks to the competition and perhaps other changes in the market that are impacting enrollments.
They ignored the competition. They failed to address rising costs to enroll, retain, and graduate students. They ignored their program, failing to modify the program so that it had a unique value in the marketplace.
They had a hot hand. They let it ride. They ignored some pretty essential signs. Now they are scrambling to ‘do something that will get us back to where we were.’ And the bigger, more pressing question that they should be asking is, “where can we go from here?” Why? Because ‘where they were’ might not exist any longer – and they can’t afford to invest limited resources on trying to get to a place that no longer exists.