Online Education: Why the Revenue Disconnect in Online Education?

Online Education: By Jeff Cobb on May 4, 2011

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.

http://www.tagoras.com/2011/05/04/online-education-revenue/

Tom McDonalds comments:

What if your online education empowered your individual learners to have the adaptive reasoning skills required to effectively apply knowledge to new situations?

What if you had the option, online, to individually coach and mentor individual learners?

Would advanced individual learning performance outcomes along with coaching capabilities help you further monetize your online content?

Let me know your thoughts. Tom

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