905: LIVE From the 2024 ⁠Career Education Convention⁠ - with Josh Swayne, CEO Charter Colleges and Gary Thorup, VP Operations, MDT Marketing

Joe Sallustio: Welcome back everybody. It's your time to ed up on the EdUp Experience podcast where we make education your business. We're here at the Career College Convention in Indianapolis, Indiana, put on by our great friends at Career Education Colleges and Universities. Shout out to today's career colleges for serving many, many students that still need to be served no matter what's going on in the rest of the space. Of course, always by my side, at least for the next couple of days, here he is. He's Douglas Carlson. He is head of partnerships at Lead Squared. Douglas, what's going on? How are you?

Douglas Carlson: It's so much fun to be here. This is just the energy and especially that intro music. It's so special about being here at CECU. I think so often we talk a lot about traditional not-for-profit education, which is really important and there's a lot going on here. But we're missing such a huge segment of the education space and the good that's done here. So I'm just thrilled to have representation here of some of the areas of education that are sometimes underrepresented.

Joe Sallustio: Well, there you have it. I think we just end the episode right now. No, no, no. We have two important guests with us. We're going to bring them in. Let's see. We're going to bring them one at a time. Let's see who they are. We've got Gary Thorup. He's VP of operations at MDT Marketing. What's going on, Gary? How are you?

Gary Thorup: Doing terrific and you nailed the intro music. I'm really impressed.

Joe Sallustio: Well, you know what? I got that in advance. I didn't know that was your favorite song. Douglas filled me in on that. Gary, I feel like I've known you for a long time. We actually have met for the first time today.

Gary Thorup: Yeah, it's awesome to be here finally to meet in person. So much has happened over the last four years where you're not directly connected with each other. It's great to be here in person. A little shout out to MDT Marketing, of course, CEO owner, Mitch Talenfeld. MDT was the first company that ever sponsored the EdUp Experience podcast four years ago, could you believe it?

Joe Sallustio: Remember it vividly. We believed in the mission. Who the hell are these guys? We believed in it. We knew it. And look at you, you've blown up. It's been amazing to watch. So well done. Thank you very much. But we're going to talk to somebody else. We've got another guest. Let's get him in. He is the CEO of Charter College. He is Josh Swayne. What's going on, Josh? How are you?

Josh Swayne: Not much. I'm just enjoying my time. This is exciting. A little new experience. Kind of rolling with the punches. Hopefully you don't walk away going, "What was that?"

Joe Sallustio: We're going to try to keep it light and a little bit of fun. But both of you guys, Gary and Josh are doing important work and we're going to start with you, Josh, CEO of Charter College. Charter College, where are you located or where of the many locations are you located? You have to remember them all, but I'm sure you could if you wanted to. Who do you serve? How do you serve them? Anything else you want to tell us about the history of the colleges?

Josh Swayne: Charter College has been around since 1985. It was originally established in Anchorage, Alaska. And from there, we've just organically grown throughout the West. We have 14 different campuses right now. And we service a variety of different programs, from blended in-house programs to online, primarily in healthcare and trades.

Joe Sallustio: Amazing. One thing that people don't understand, I would say people outside of career education don't understand is how hard it is to run a multi-campus institution. You think running one campus is hard, but try running 14. It's got a whole other dimension to it. You need a different management structure. Can you talk about some of the successes that you've had and maybe some of the challenges that you've overcome managing so many schools?

Josh Swayne: I think as you mentioned, one of the unique challenges is just the different regulatory components as it relates from state to state. There's obviously the government, then you have your national accreditations, and then you have your states. So with that, that's probably the most unique element. You even break down into labor laws and things that you don't naturally think when it comes to education, but in terms of running a business, those are probably the biggest headaches that come with, I think, multi-state operations. Now you can kind of have some duplication, it allows you to spread across, as you have multiple campuses. But it's enjoyable, we're in five, soon to be six different states from an operational student delivery standpoint. So that gives an opportunity for us to make relationships with each of those states, but it's a relationship business from a student to the employer to your accrediting and regulatory bodies and such.

Joe Sallustio: Yeah, it is a relationship business, Gary. I mean, we've got to find students. We've got to introduce them to Charter College. They've got to enroll there. That's not easy work. It's hard work and it's getting harder, especially as AI makes everything. It's kind of disrupting search and so on. What's going on in the landscape right now?

Gary Thorup: Well, there's so much and you're absolutely right. I think especially when you're talking about an institution like Charter where you're going out, there's a lot of young adults that you are reaching out to to try and get them educated. One of the toughest things is they got their life going on. There's so many things going on that they have to worry about. It's fuzzy math. Grown up things. And so I think one of the things that we do and one of the areas that we've partnered with Charter in is how do we do a better job of engaging them and making sure that they're clear on what the value proposition is? What are they going to get out of education? And help support them through their enrollment process to make sure that they're arriving on time, that they know when they're supposed to have a financial aid appointment. They know when classes are going to start. Those sorts of things as healthy reminders to help make sure that they're advancing through the enrollment lifecycle correctly.

Joe Sallustio: Douglas, I feel you brimming. Your ears are about to explode with smoke that you have so many questions right now.

Douglas Carlson: It was really kind of funny. I'm taking a little bit of a U-turn because I'm still going back to starting in Alaska. Can you tell us about that? What was the reason for founding? How did the school expand out? That isn't necessarily the usual expansion strategy that I would think of for a school system. So, just curious.

Josh Swayne: Yeah, actually in terms of combination, there was a school in California that a small group purchased, an equity group purchased, and wanting to expand, that's where they came across Charter College. So Charter College then is the name that we relabeled all of our campuses with. The gentleman who started in Anchorage was a professor, was in love with education, saw a need there in the Anchorage, Alaska area, and started it actually as an IT technical school. In 2003, this group purchased and merged the two together. And since then, we have organically grown throughout the West to where we are under the Charter College brand.

Douglas Carlson: Got it. Is there something about the West that allows you to expand more readily? Because a lot of times when I see colleges, they'll expand within the same state. So you might have multiple campuses in Florida or multiple campuses in Texas. And obviously, size of state matters. But I'm just curious, where is your multi-state strategy coming from?

Josh Swayne: Probably about 10 years ago, strategically as a group, we decided to target really smaller markets. Where typically, you know, we're in towns like, unless you're from Washington, Wenatchee, Washington, Yakima. A lot of people aren't going to know where that is. Billings in Montana. So the objective there is that in those smaller areas we have a campus but have maybe one or two programs that service just the workforce needs there versus having an all-inclusive campus that has all of our program offerings and has a full service of everything.

At the same time in those small markets, we have particularly designed that operation to have minimal staffing that's needed. And then we do a lot of our work from financial aid, admissions, career services done through a video link. So even prior to COVID, we had what we called link rooms where our students would go into the room. It was two big TV screens and they tapped in through what people know as Zoom, but we just called LinkedIn. And that's how we provided those student services to the students along the way. That way we could go into the smaller markets and be able to offer the educational institutions but not have the full array of administrative staff. And control all the fixed costs.

Douglas Carlson: Well, I'm completely flabbergasted. My goodness. So this is a cool model. Where did this concept come from? Because you're really doing, obviously you're doing a great job controlling costs, but what I also heard is you're doing a really important job serving underserved markets, specifically for job skills, which is really important. Billings probably isn't the biggest draw for schools of any stripe or any sort, but you're there and you're serving a purpose. So where did the concept for this model come from?

Josh Swayne: We began to think outside of the box in terms of as you begin to do just normal market research to open a new campus, we begin to see these pockets of needs. But really when you look to step into like, well, how are we going to find a campus president, a financial administration, admissions? And so then we started to restructure how can we provide the end result, which is meet the workforce needs without all the fixed costs that come from an administrative payroll and realize that, hey, from a headcount standpoint, we can service these from our larger markets where it's easier to hire and train and to keep staff and to meet the regulations that you need and the skills specifically needed to address those students. And that's what kind of spawned that idea and realized that, hey, all joking aside, the joke that was in our company was like, hey, if you can date and meet and marry someone online, why can't you, you know, speak to a student, talk about school and sell education and the concept of that entry model. But once they're in, they're at a bricks and mortar school where we hired the teachers. They're there locally. They're the skill set of whether that's a trades or medical component. But the initial servicing the student along the life cycle was a question that most thought, well, you have to physically be there. And we're like, well, no, you don't. You can still, in fact, it actually became something a little bit easier because instead of having a full-time employee there from eight to eight, when we were, you could have somebody that sat locally that could service two or three of these smaller markets and be able to be real-time activated versus physically being there.

Douglas Carlson: Well, the thing that pops into my mind is there's a lot of traditional campuses that have satellite campuses. So I'm thinking of a headline I saw from West Virginia, and they're having to shut down some of those smaller satellite campuses. A big piece of that is not just the teaching piece, but there's a lot of fixed costs there. There's a lot of redundancy there as well. So this could be a really interesting model to help rural campuses that might be struggling. So I love this and I think these are the type of insights that I love to kind of pull out and find where other areas could potentially adopt this. And you know, really kudos to you for developing the model.

Joe Sallustio: And Gary, you still got to go find these people, right? I mean, you got to go, if you go to Billings, Montana and you know, I don't know if you know this, but I did record you, I recorded you when you weren't looking and you were putting in a new marketing initiative and I just want to play it for you. "Execute order 66." I'm not sure how it worked out.

Gary Thorup: If you ask my coworkers, they'll probably tell you that's what I sound like.

Joe Sallustio: What is the partnership look like between you guys now? You've gone to Billings Montana or just as an example, are you going to go to another small market? You've got to have a plan to access that market from a market intelligence perspective. How are you guys working together to do that?

Gary Thorup: Well, the way that we collaborate, we actually do a lot post-inquiry. So where we really support each other, we're post-inquiry focused on how can we nurture, what can we do to help better engage those who have expressed interest in the first place. And actually it's kind of like dynamic between Douglas, Josh, and MDT because one of the solutions we have today... This Douglas? This guy right here? Because the way that we're able to leverage Lead Squared to deliver what I honestly believe is one of our most compelling nurturing campaigns that we have out there, which is all trigger-based. It's trigger-based based on student status through the enrollment cycle. And it's meant to engage as people advance through the process. The only reason we can do it is two main things. One, because we're able to leverage the technology of Lead Squared. But two, we've built, and I don't want to speak out of turn, but I feel like we've built a good relationship with Josh and Melissa and the whole team there on like trust in terms of doing test campaigns to figure things out because the campaign that we're thinking about right now took a lot of work. There's IT involvement on their end, there's IT involvement on Lead Squared's end and our end to make this happen. But we've been developing different campaigns over the last few years that have like they're showing their results now and to have the dedication open mind to taking a shot at tests like this, I think is tremendous. And I think that's where we really have worked well together.

Joe Sallustio: Trust is one of those areas in higher ed that I think we, especially with a lot of schools closing right now, both in the career college side because of regulation or otherwise, and now you're seeing it more on the nonprofit side, finding the right partners is just like the most important thing because you've got to put a lot of trust in these gentlemen, in these companies that they're gonna become part of your business, just not a vendor serving your business. Can you talk about how you make that decision and who you're gonna work with a little bit?

Josh Swayne: You hit the nail on the head in terms of just relationships. That's the business that we're in from the student all the way through that funnel. I've worked with Mitch now for 20 plus years. And MDT's been part of our, some part of our lead nurturing or lead generation. And it is just about that ability to sit down at the table and talk about what's working and what's not working and to be able to continue to tell your story in a compelling way and meet the student or the customer where they're at. And that's been a good opportunity with us with MDT to be able to, you know, there's been campaigns where we scrapped and said, hey, we got to cut this, it's not working for us anymore. And, you know, sometimes that hurts their feelings a little bit, but that's okay. They adapt and roll. And then they bring things to the table that, you know, Gary was just talking about that's, hey, that's a very innovative way that is speaking to our student base and meeting them where they are. But ultimately, it's just that relationship and to be able to go back and forth in a very healthy manner with the same purpose in mind, to be able to tell a compelling story and to provide that customer service.

Douglas Carlson: Well, and I'm thinking of the extension of that is, you know, you're coming into a new market, so you're six states, so congratulations on that. How do you think about opening up a new market? So like, you know, Billings are a smaller area where you serve really well. Do you start with a population? Do you start with a need? Do you start with, you know, what jobs are not being filled? I'd just be really curious how you think about that. And then obviously you partner with MDT and others to make that happen, but just kind of curious.

Josh Swayne: It's reverse engineering, at least for us, the way, and I imagine we're very similar to a lot of individuals. We start with the workforce needs in the community and then evaluate how they're being met, if they're being met, and understand then what it takes for us to be able to step into that market from an operational standpoint and deliver for them what they need. That's the number one driving force. Once that's in place, I think we know our business well enough to know, hey, this is how we can talk with these customers or these businesses. But generally, that's the forefront of what we're looking at in driving tuning. Even in our current markets, when we change programs or you look at what you want to add or subtract, it's really driven. Now, I talked about how we have 14 different campuses. I think it's important that some of these smaller areas that we've talked about over the years, we've met their needs. And so we're in the process of closing three campuses down from an operational decision process, not from any other of the outcomes. It's just the workforce needs have changed and we're not able to meet that at a level that's needed to stay in business. And so we're, I guess in our industry, teaching these students how we just stopped enrolling and are fulfilling our obligation to the students throughout that process. But that's just part of that. We knew that would probably come in that transition. And so with that, we're closing three down and opening two here in the next, well, we've already opened one in Salt Lake City. So that's just part of, I think that's being able to be adjustable. I think some of the reasons, maybe in my opinion in education, we get so stuck on the old chalkboard and chalk that we can't stop to think, hey, we need to be able to meet the customer. And that customer can both be the student and the community at large. But when you get so in your focus that this is how it's going to be or else, I think that may be some reason why some are in the predicament they are, whether they can't restructure their overhead or the delivery model or the programs and we've got to be able to adjust and so.

Douglas Carlson: Well and I really hope that some underserved towns and areas are listening to this because they should be reaching out to you because frankly they're not being served by the educational market today and your model is perfectly set up to serve exactly what communities need so you know we'll give Josh's credentials so you can reach out after this.

Joe Sallustio: Call between the hours of 12 and 6...

Josh Swayne: I think the interesting thing too is this may be surprising but most of our - we call them E-pods, smaller areas - you're not looking at more than anywhere from 3,500 square feet to 5,000 square feet.

Joe Sallustio: Wow.

Josh Swayne: Yeah I mean these are just these are just a small little footprint, but we've got that model down that you have there mostly classrooms. Which isn't that the purpose of what you're doing? I mean, I don't need huge elaborate, you know, hangout spots because these are working adults that want to come in, get their education, go to work. I mean, that's the objective of what they're attempting to do is they want a better life through better employment and they need an element of training or licensure that gets them there. And the main thing is our classrooms, our labs, and that's what we've delivered to them.

Douglas Carlson: Yeah. That's incredible. Because so often I think we get hung up on infrastructure and that's sort of like the legacy education is how tall is your building? How beautiful is your ivy, et cetera? And no, you're right. There is a place for that. But what I'm seeing, and this is more anecdotal than anything else, is I think students of all ages, whether they're 18 or whether they're 40 coming back for a second career, they're looking for objectives and they're looking for outcomes. And if the building's nice, that's nice. And obviously you need the facilities to execute against what you want, but facilities are no longer the thing of selling. You don't need a pool.

Joe Sallustio: Good statement by Douglas. Well said, sir. I would add one interesting point about what you talked about in the industry has been swaying. You know this too, Gary. You saw big schools like University of Phoenix, they had 170 campuses and they got rid of all those campuses and said nobody comes to a physical location anymore. And then it kind of swings back a little bit. And then you have the adult student that wants to go somewhere. So we went from everything's got to be online to now more hybrid. It's got to be a little bit of both. You're going to have students that don't want online at all, and you're going to have some that don't want on ground at all, and you're going to have a bunch that want a little bit of both. Or the ability to choose how much of each they want. Can you talk about that just a little bit and how you're thinking about today's modern learner and how to service them?

Josh Swayne: Yeah, that's a great question. And I think as an institution, one thing that we've attempted to do is try to be good at one or two things. I think there's a time that you from maybe an altruistic good point, you want to be all things to everyone. And from an educational standpoint, we've really taken more of a focus structure and just said, hey, these are the types of programs that we're gonna offer. We understand that that won't attract everyone, but as long as we can deliver, because we're an outcome-based industry. So we do have our technical based programs are skill oriented. There is that lab component. They're on the campus. They get the hands on training. But then from a hybrid online component, there's that availability. And then in the least the way we're structured, most of our associate's degrees or bachelor's degree programs are all done and delivered online. It's not what you know, it's what you can prove.

Joe Sallustio: And Gary, you've got to keep proving your results with these guys over and over again, don't you? You've got to fill those classrooms. You've got to, you know, post lead to moving to enrollment and staying. There's a lot of media surrounding people right now. How do you get at them? What's the best way? What's resonating most with students right now?

Gary Thorup: Gosh, I mean, it's so hard because you're competing against every other content generator out there, like breaking through. There are all kinds of considerations. What are you going to say? What's the creative going to be? How are you going to deliver it? What time are you going to deliver it? So there's all these considerations. We found something that's been working for us and it's been video. Video that goes out that's personalized to the individual who's receiving it. It's based on data that they have provided to their institution. And then when they hit certain milestones in their enrollment process, we follow up with them to give them gentle reminders and updates about where they stand and what actions need to be taken from there. And that has worked really well. We have some early results that look great. But you're right, everything comes down to results and we monitor closely. And I think that that's something what's so great about our partnership, because we're very transparent about the data and they're very willing to take a shot at trying something new and testing and everything like that and kind of hear their approach, not just on the nurturing side, but just how they run their business in general. If you don't have that you're not gonna prove so I think that's a foundation of our relationship but that's our approach actually. It's really hard to engage somebody today because there's so many ways that they can be and so much noise there. That's it, that's the word - there's so much noise. You're competing against Netflix, you're competing against TikTok. I mean, how do you break through when somebody is on TikTok? You know, I think it's really hard to do. You just do the best you can, you know, but videos work really well for us.

Joe Sallustio: Speaking of noise, Douglas will not calm down. He's reminding me that the reception has begun and they have begun serving at the bar. Ladies and gentlemen, my guest co-host today, he's Douglas Carlson. He needs to get out of here right now, which means we have to end. No, it's not true. I would like to go to the bar, but I enjoy talking to you guys very much, learning about Charter College and the work that you're doing. Do you want to just give us a quick one minute? Where are you headed for the future, Josh? What's the future look like at Charter College?

Josh Swayne: I think our vision is to stay within the healthcare industry and continue to expand that kind of smaller market. We've explored a few online options and some components to co-op with different healthcare industries to continue to reduce the fixed costs that we have but still deliver the high level of education that we're looking to.

Joe Sallustio: Well, thank you for joining us, you guys. Gary Thorup, he's at MDT Marketing. That's right. We have somebody here with us that can't hear the songs and we're all laughing and we're going to have to tell her later. And of course, on the way out, he's Josh Swayne. He's CEO of Charter College. Wait for it, Josh. You just got to get it. Josh is standing up dancing right now for anybody that can't view this. Thank you guys for joining. Ladies and gentlemen, you've just ed-uped.