Terms like "branding," "product management," "competitive advantages," and "Unique Selling Points (USPs)" are most often readily dismissed by the academic community. However, in today’s world, higher education can no longer afford to ignore market realities.
Between 2019 and 2023, total enrollment in higher education in the United States dropped by almost 7%, according to the National Student Clearinghouse Research Center. A year later, this unprecedented decline’s effects are still unsettling. Immense pressure has been placed on institutions to reassess their strategies and adapt to a rapidly changing environment that now factors in many negatives: a declining young population, rising costs of higher education, growing infrastructure expenses, and increasing scrutiny over the real value of a college degree. Similar patterns are observed in other developed countries, emphasizing that this is a global issue requiring immediate attention.
Over the last 20 years, the cost of tuition in the U.S. has skyrocketed by approximately 182%1. Higher education has become so expensive that some students and their families are questioning its value and return on investment (ROI)—a concept that higher education institutions have frequently ignored. In fact, college tuition in the U.S. is several times higher than in other developed countries like Japan and France2, and exponentially higher than in developing nations.
The "What Else?" Factor in Higher Education
To stand out in this challenging environment, schools need to ask, "What else can we offer?" In other words, what additional value are students getting for their hiked tuition, beyond access to quality content and faculty? Simply praising academic quality and good faculty isn’t enough anymore—every university claims that. No school advertises, "We do not have good quality," or "Our faculty is not impressive”.
Most traditional universities are no longer differentiating based on academics anymore—they’re trying to do it with a key focus around the on-campus experience. That’s where strategies like these come into play:
- Impressive Infrastructure: State-of-the-art campuses, luxurious dorms, and expansive stadiums.
- Competitive Sports Teams: Investing in athletics to build school spirit and recognition.
- Health and Wellness Facilities: Modern gyms, wellness programs, and recreational centers.
- Strong Community Connections: Engaging with local communities through events and partnerships.
- Industry Partnerships and Internships: Providing real-world experience and networking opportunities.
- Global Engagement: Study abroad programs and international collaborations.
- Sustainability Initiatives: Eco-friendly campuses and programs focusing on environmental responsibility.
Interestingly, most of these extras aren’t essential for delivering quality education. Yet, they significantly influence students’ school choice. For example, a university in Florida offers amenities like a lazy river and a wave pool. Are these necessary for delivering quality education? Absolutely not. (They do sound fun, though!)
Earlier this year, I met parents of several rising college freshmen who made their decisions based on dorms, how competitive the football team is, and the overall campus environment. These factors have little to do with the quality of education, but they are an increasing factor for many.
Parallels in Other Industries
This phenomenon isn't unique to education. In Miami, where I live, the real estate condo market has followed a similar path. In the 1970s, condos were mostly blocks of apartments with maybe a small pool. By the 1980s and 1990s, these pools got bigger. In the 2000s, gyms and spas were added. Now, there are movie theaters, state-of-the-art gyms, multiple pools, dog parks, business centers, sky decks, wine-tasting rooms, spinning classes, and some even have a suite of retail services on-site.
A second, similar example is the hospitality industry. In the 1970s, hotels were primarily places to sleep, offering basic rooms with a coffee maker, if you were lucky. By the 1980s and 1990s, hotels started adding features like cable TV, movies on demand, swimming pools and simple fitness centers. In the 2000s, competition intensified, and hotels began offering spas, gourmet restaurants, and lavish conference facilities. Now, they boast rooftop pools, luxury spas, personalized concierge services, themed experiences, retail shops, and even in-house entertainment. It's all about the extras that entice guests. Sometimes, travelers choose a hotel with a smaller room or less comfortable mattress in favor of exceptional amenities or unique experiences. The room itself is no longer the driving factor.
The Scalability Challenge
One of the significant challenges with how traditional universities differentiate themselves is their lack of scalability. Large investments in infrastructure serve only a fixed number of students. As campus and operational costs rise, they are often covered by tuition increases or taxpayer funding. As tuition rises, demand may decrease, forcing universities to invest more, leading to even higher tuition—a vicious cycle that can become unsustainable. Eventually, some universities may end up with state-of-the-art campuses that few can afford or want to attend.
Online Education: An Untapped Opportunity for Differentiation
Ironically, online education has seen minimal differentiation. Most schools offer similar programs with nearly identical value propositions, making it hard for prospective students to distinguish between them. This is why around 80% of online students say price is the deciding factor when choosing a school. When everything else feels the same, price becomes the tiebreaker.
Online education, once hailed as a game-changer for accessibility and flexibility, has been particularly slow to create unique offerings. If we did the famous "Pepsi Challenge" from the ’90s with a dozen MBA programs from well-known non-Ivy League schools, it would be tough—if not impossible—to tell which program came from which school. This lack of differentiation means institutions are missing opportunities to highlight their unique strengths and build meaningful connections with prospective students.
Scalability Advantages in Online Education
The irony is that online education has an advantage when scaling, compared to traditional education providers. Online education allows for extraordinary services to be offered to students with minimal or no tuition increases because the model is highly scalable, if managed properly.
For example, at American Public University System (APUS), we started offering 24/7 mental health support in 25 languages to all our students for no cost last year. We do this by partnering with a leading mental health tech company based in London. Our almost 90,000 students have access to the app if they wish. Imagine how many people we would need to offer 24/7 mental health support in 25 languages to almost 90,000 students in a traditional campus format! It would require hundreds of staff members. This is a prime example of how we can offer extraordinary additional services to students at scale.
APUS's Commitment to Differentiation and Affordability
At APUS, we're committed to creating a truly differentiated experience for the communities we serve—both nationally and globally. With students across all 50 states and in over 80 countries, we're highly confident in the quality of our programs and faculty, and we continually make academic improvements. But we also focus on the "what else?" – that's what will provide better experiences for our students.
We understand that cost is critical in the decision-making process, which is why we work diligently to keep tuition in check. Over the last 20 years, while college tuition in the U.S. overall has increased by almost 200%, we have only increased tuition approximately 15% (while expanding our student body nine-fold during the same period).
Differentiation Strategies at APUS
In addition to 24/7 mental health support, we are actively working on several initiatives to strengthen our differentiation strategy while continuing to expand access to affordable, high-quality education. Some key initiatives include:
- AI and Personalization: Integrating artificial intelligence to create tailored educational experiences that meet the unique needs of each student. We are working to incorporate AI-driven learning platforms that can adapt coursework based on a student's performance, providing additional resources where needed.
- Professional Certified Coaches: Providing integrated coaching and mentoring services that are certified by the International Coaching Federation (ICF).
- Lifetime Career Services: Offering lifelong access to an extensive network of job and internship opportunities worldwide. As of Sept. 23, 2024, APUS’s job board, an expansive career and community connection platform supported by PeopleGrove, has about 700,000 job openings and 7,800 internships listed.
- Extensive Student and Alumni Networks: Facilitating numerous groups and organizations for students and alumni to build valuable connections.
- Highly Responsive Enrollment Services: Providing a high-touch enrollment experience for every student that desires it, along with self-service options that allow them to experience enrollment the way that they want it. Our admissions coaches and academic advisors are ready to guide students through every step, from application to course selection.
- Global Reach: Expanding access to high-quality North American education to students around the world.
- Business-to-Business Partnerships: Collaborating with over 100 corporations to provide educational benefits at preferred tuition rates. These partnerships not only make education more affordable but also align academic programs with industry needs.
- Carbon Neutrality Commitment: Reducing vehicle commuting by 260 million miles annually through the continued expansion of online learning and remote work, contributing to sustainability efforts.
- Increased Academic Research: Partnering with organizations like NASA to advance knowledge and innovation. Our students have the opportunity to participate in groundbreaking research projects.
- Preferred Tuition for Military, Veterans, and Their Families: Offering lower tuition rates to military personnel, veterans, and their extended families.
We are committed to continually expanding our value proposition so our students can have meaningful educational experiences. As advancements in technology and globalization take shape, we believe that our focus on incorporating AI, personalized learning, and global accessibility positions us to meet future educational demands.
Embracing Change for the Benefit of Students
At APUS, we embrace terms like "branding," "product management," "competitive advantages," and "Unique Selling Points (USPs)". We are doing this in the best interest of our students. By acknowledging and adapting to market realities, we can provide a superior educational experience that not only imparts knowledge but also prepares students for success in an ever-changing world.
The higher education landscape is undergoing significant changes, and institutions must adapt. Differentiation—offering additional value beyond traditional academics—is no longer optional; it's essential. By focusing on innovative services, technological advancements, and personalized experiences at scale, universities can meet the evolving needs of students while maintaining affordability.
1 Education Data Initiative – Average Cost of College By Year: https://educationdata.org/average-cost-of-college-by-year
2 Education Data Initiative – Average Cost of College By Country: https://educationdata.org/average-cost-of-college-by-country
