I’ve been catching up on my reading and in the process noted that the March edition of Associations Now highlights research showing a disconnect between the revenue growth association CEO’s anticipate they can achieve from online education and what they actually experienced. Here’s the rundown for the past two years for the percentage of CEOs who anticipated growth versus those who actually achieved it:
2009
Anticipated: 60.9%
Experienced: 33.3%
2010
Anticipated: 59.2%
Experienced: 36.3%
Even if it has shrunk somewhat over the past two years, that’s still a fairly sizable gap between expectations and reality. Indeed, the fact that there is a gap at all seems bizarre when you consider the dramatic growth in the overall market for online education during the past decade. For 2011, 62.4 percent of the CEOs they are anticipating revenue increases driven by online education, but we don’t think there will be much of a shift in the gap unless there is also a fundamental shift in the way that organizations – with these same CEOs leading the charge – go about planning for and managing online education.
As part of the research we are conducting for our sector wide Association Learning +Technology Report (forthcoming), we found that very few organizations doing online education – around 10 percent – characterize themselves as “very satisfied” with either the enrollment levels or the levels of revenue they are generating. These findings seem consonant with the ASAE numbers. Additionally, we found that only 15 percent of organizations characterize themselves as “very successful” with online education. And here’s the kicker – only about 20 percent of organizations doing online education have actually created a strategy to guide their activities. Is it any wonder that few are finding great satisfaction and success?
If the CEO’s experiencing a gap between expectations and reality want to see real revenue growth from online education at least one part of the answer seems glaringly obvious: make it a strategic priority and act accordingly. Indeed, start thinking more strategically about education in general and provide a vision for online education as one component of an integrated portfolio of products and services designed to deliver high value to members.
It’s the nature of our work here at Tagoras that we talk with a lot of organizations that are in various stages of implementing online education. We see more executives involved than in past years, but still too few. And we still encounter too many organizations that take a haphazard “we need it yesterday” approach to planning – if planning is even the right word. Learning online is a fact of life at this point, and as we wrote in our 2009 Association E-learning: State of the Sector report, “with it now dramatically easier for groups to self-organize, communicate, and share knowledge, e-learning becomes one of the tools through which associations can differentiate and establish value.” The revenue disconnect suggests that most associations aren’t doing that, but I have no doubt that a bit more executive leadership and some basic blocking and tackling could change that situation quickly.
What do you think?
Jeff
Jeff — Excellent analysis of what’s behind this particular curtain. I’ve long been a proponent of devising a clear strategy FIRST. It takes time to do it right (though not as much time as perceived — an organization can create a strategy for its educational curricula in anywhere from a day’s work to a couple of months, depending) but it’s time invested to be sure.
I’d add here that there are upfront costs that might not be recouped as quickly as some organizations believe. An LMS, for example, needs to be seen as a long-term investment, rather than something that will pay itself back within the short term. Sometimes it can take five years or more.
And organizations opting to hire a production company for their Webinars, for example, might see further impacts on the revenues they hoped to achieve. It’s like everything else — the more you do yourself, the more $$ you pocket. If it costs you $5000 to hire a production company to do a Webinar and you charge $100/computer, you don’t start to earn back your investment until the 51st registrant. And even then you’ve only generated $100 in revenue.
I’d suggest that revenue projections for elearning are too often based on faulty assumptions or information.
For example, we usually don’t assign dollar value to the time and effort our volunteer session leaders put into preparing for a face-to-face session (can you imagine how exorbitantly expensive an annual conference would be at those rates?!?!?), yet content repurposing is a standard expense, especially in custom content development for asynchronous learning.
Finally, I wonder how many of those execs would pounce on their favored face-to-face sessions with the same critical eye? I know there are sessions that cost organizations far more than the revenue they ever generate — some are lucky to break even — but the organization holds onto them because they’re essential to its learning culture. That’s all well and good — sometimes it’s better to break even or lose money if the program benefits the members. But don’t apply a different standard to elearning programs, just because they’re online.
Yes, my passion on this runs high!
Thanks for getting my blood boiling, Jeff 🙂
Ellen – A belated thanks for commenting on this. Your input on strategic thinking in the area of e-learning is always welcome! I think another factor in “revenue realization” that neither of us really touches on above (though I know you are well aware of it) is competition. Very often, as associations enter the world of online education, they don’t account to the degree they should for competitors who have already entered the market place, or will soon. The economics of face-to-face meetings make direct competition more difficult, but the cost of entry in e-learning can be quite low, depending on the approach taken. Suddenly what may have been blue ocean for an organization becomes filled with red. Development of a vision that outflanks competitors is one of the key reasons I think more executive involvement is critical.
Plenty to continue thinking about in this whole issue!
Jeff