CMED 2013 Benchmarking

& Industry Trends Survey Martina Bison-Huckaby

Arne Johnson

Linda Halliburton

2013 Team

Martina Bison-Huckaby

Director, Center for Executive Education College of Business and Economics

Arne Johnson Marketing Manager, Continuing Professional Education College of Continuing Education

Linda Halliburton Asst. Dir. Of Custom Programs, Executive Education Carlson School of Management

2

3

Today’s Agenda

Wrap- Up

• Linda

Program / Instruction

• Linda

Revenue

• Martina

Marketing

• Arne

Financial

• Martina

Population

• Linda

Welcome & Survey History

• Linda

POPULATION

Linda

4

Canada: 21.1%

United States: 71.5%

Middle East/Africa: 1.4%

Asia/Oceania: 2.1%

Europe: 3.6%

Caribbean/Central/South/ Latin America: 0%

Who responded?

38%

6%

24%

9%

15%

6%

Who responded?

Who responded? Population of Metro Areas

Under 100,000 14%

100,000 - 500,000 42%

500,000 - 1M 12%

1M - 2.5M 14%

Over 2.5M 18%

Public 70%

Private Non-Profit 27%

Private For-

Profit 3%

Institution Type

7

Con Ed 41%

Exec Ed 46%

Other 13%

Unit within Institution

Job title or function of

respondents

8

11%

11%

35% 13%

8%

2%

20%

Assistant/Associate Director (ofthe entire department)

Dean (Associate, Assistant, Full)

Executive Director (of the entiredepartment)

Marketing Manager/Director;Business DevelopmentManager/DirectorMarketing/Program/OperationsCoordinator or Specialist

Operations Manager/Director

How Would You Describe

Your Department?

9

10%

43%

2%

49%

9%

0% 10% 20% 30% 40% 50% 60%

Start-Ups

Established

Declining

Growing

No change

How would you describe your

department? CE EE Other

Established 14% 13% 7%

Established and no change 2% 0% 0%

Established and growing 3% 1% 0%

Established and declining 1% 0% 0%

Declining 1% 0% 0%

Growing 11% 26% 4%

Startup 0% 4% 1%

Startup and no change 0% 1% 0%

Startup and growing 2% 1% 0%

No change 3% 1% 1%

10

FINANCIAL MODELS

Martina

11

Department’s Contribution to the

University

12

65%

19%

16%

0% 20% 40% 60% 80%

We must pay direct expenses, indirectdepartment expenses and contribute

or pay a tax to the university.

We must pay for all of our directexpenses, indirect department

expenses and that is all.

We must pay for all of our directexpenses.

How Has Contribution

Changed?

“Victims of our success!!!”

Contributions to college or university are expected to be higher and higher also due to the fact that state contributions (for public universities) have been cut

13

How is Contribution

Determined?

Executive Education

- Most share a percentage of their revenue with the business school

- Percentage varies, generally set annually based on performance

- Some share other costs (building and other OH)

Continuing Education and Other Centers Types

Most Continuing Education Centers have to pay a “university tax” or other type of contribution towards indirect administrative and operating cost.

14

Have Dedicated Staff to Perform

Sales Activities

15

Completely describes mydepartment

Somewhat describes mydepartment

Does not describe mydepartment

25%

42%

33%

Higher revenue (3MM+) tend to have more dedicated sales staff

Sales Staff Compensation

16

0% 20% 40% 60% 80%

Don't Know/not sure

Salary only

Salary plus bonus or commission

13%

71%

16%

12% paid commission or bonus in 2012 as compared to 16% in 2013

MARKETING

Arne

17

How are marketing responsibilities

handled for your programs?

18

0% 10% 20% 30% 40% 50%

Dedicated marketing person

Hire outside experts

Do some of it ourselves

Do it all ourselves

Support from school/university

2012 31% said they have dedicated marketing staff

42%

29%

36%

30%

43%

How is your marketing budget

determined?

19

Percentage of projected revenue 21.51%

Flat dollar amount 45.16%

Don't know 8.60%

What marketing budget? 18.28%

Other 6.45%

% Rev. 1-5% 6-10% 11-15% 16-25%

% of total 33% 45% 9% 13%

How has the Marketing Budget

Changed?

20

2013

2012

2011

Spend more or the same

70%

83%

80%

48% more 22% the same

32% more 51% the same

47% more 33% the same

How has the Marketing Budget

Changed?

21

0% 5% 10% 15% 20% 25% 30%

2013

2012

2011

Spend less

14% a little less

6% a lot less

30%

17%

20%

What are your most effective

marketing vehicles and offers?

Top marketing vehicles

1. E-mail marketing

2. Online advertising / Pay per click

3. Website

Top offers

1. Information sessions

2. Discounts (early bird, certificate reg discount)

22

Rank of marketing spend

23

Top 5

1. Website

2. E-mail

3. Print advertising

4. Pay per click

5. Direct mail

Bottom 5

6. Social media

7. On-line display ads

8. Event based marketing

9. Info sessions

10. Referral programs

64% of marketing spend is on digital*

*Website, e-mail, pay per click, social media, on-line ads

Regularly Analyze Effectiveness of

our Marketing Efforts

24

Completely describes myorganization

Somewhat describes myorganization

Does not describe myorganization

25%

55%

20%

-12% +4%

+8%

Role of Social Media

25

Small but growing

Just starting

Established

34%

29%

37%

Without specifics on why/how it is so successful with Some, it’s difficult to draw any conclusions about this.

Have CRM System

26

Completely describes mydepartment

Somewhat describes mydepartment

Does not describe mydepartment

44%

21%

35%

REVENUE

Martina

27

Business Performance in

Most Recent FY

28

30%

39%

17%

13%

1%

0% 10% 20% 30% 40% 50%

Grew significantly

Grew somewhat

Flat

Declined somewhat

Declined significantly

Business Performance in

Most Recent FY (CE vs EE)

29

38%

25%

21%

13%

4%

35%

55%

10%

0%

0%

0% 10% 20% 30% 40% 50% 60%

Grew significantly

Grew somewhat

Flat

Declined somewhat

Declined significantly

CE

EE

Contributing Factors to

Business Performance

Growing (69%)

Economy improving

Increase demand for online programs

Better marketing expertise

Stronger brand recognition

More and larger custom contracts

Cutting edge technology

New partnerships intra-university

New course offerings

Declining (14%)

Sequestration

Staff changes

Focus on OE rather than custom

Increase in competition

Economy slow recovery

Lack in sales expertise

End of large contracts

30

Total Gross Revenue in Most

Recent FY

31

0%

5%

10%

15%

20%

25%

30%

35%

40%

11%

30% 28%

16%

2%

14% 13%

17%

38%

14%

1%

17%

2012

2013

Total Gross Revenue in Most

Recent FY Continuing Education Executive Education

32

0%

5%

10%

15%

20%

25%

30%

35%

40%

6%

16%

38%

13%

3%

25%

0%

5%

10%

15%

20%

25%

30%

35%

14%

19%

33%

19%

0%

14%

Total Gross Revenue

in Most Recent FY

33

0%

10%

20%

30%

40%

50%

60%

6%

16%

38%

13%

3%

25%

14%

19%

33%

19%

0%

14%

30%

10%

60%

0% 0% 0%

CE

EE

Other

Gross Revenue per FTEs 2013

34

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

$143,220

$158,136 $151,470 $154,803 $164,703

$187,203

1 to 4

2 to 6

4 to 11

10 to 25

25

20 to 65

Average $ 4,457,557

Mode $ 2,000,000

Minimum $ 35,000

Maximum $ 60,000,000

Std. Dev $ 9,440,589

Gross Revenue per FTEs 2012

Average $ 248,127

Mode $ 350,000

Minimum $ 50,000

Maximum $ 875,000

Std Dev $ 156,200

$-

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$123,133

$215,047

$290,987

$357,633

$206,673

1 to 5

2 to 8

3 to 14

4 to 100

40 to 150

35

Number of Full Time Equivalents (FTEs)

36

2 1 1.5 3 3 3 2 2 1 4 3 6 3 3 2 4 2 3 2 5 4 5 3 4.5 3.5 9 4 5 3 6 3 2.5 5 6 5 7 7 4

50

11 5 1 9 8 9

20

11 6 4.3 4 11 4.5 5

20 22

9.5 13

24

7.5

35

18 10

18 18 25

13

30 38

63 55

104

60

30

50

60

12 20 20

0

20

40

60

80

100

120

$- $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000

2

1 1.5

3 3 3

2 2

1

4

3

6

3 3

2

4

2

3

2

5

4

5

3

0

1

2

3

4

5

6

7

$- $200,000 $400,000 $600,000 $800,000 $1,000,000

Under 1 Million Dollars

4.5 3.5

9

4 5 3 6 3 2.5

5 6 5 7 7

4

50

11

5 1

9 8 9

20

11

6 4.3 4

11

4.5 5 0

10

20

30

40

50

60

$1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000

1 to 3 Million Dollars

Gross Revenue per Size of

Metropolitan Area

37

$6,937,313

$3,949,402

$3,838,499

$2,744,286

$8,804,355

$- $4,000,000 $8,000,000

Under 100,000 people

Between 100,000 and 500,000people

Between 500,000 and one millionpeople

Between 1 to 2.5 million people

Over 2.5 million people

Net Profit Margin 2013 (reflecting revenue - direct and indirect costs)

38

0% 5% 10% 15% 20% 25% 30% 35%

Loss

No Profit

Less than 9%

10 - 19%

20 - 29%

30 - 39%

40 - 49%

50 % or more

6%

2%

17%

30%

19%

11%

11%

4%

Net Profit Margin 2012 (reflecting revenue, direct and indirect costs)

39

0% 5% 10% 15% 20% 25%

No profit

Less than 5%

6%-10%

11%-15%

16%-19%

20%-29%

30%-39%

40%-49%

50% or more

Don't know

6%

17%

19%

20%

15%

6%

7%

0%

2%

9%

Revenue – Open Enrollment

40

45%

58%

50%

39%

41%

33%

33%

44%

14%

9%

17%

17%

Average enrollment in public courses orprograms

Number of public courses or programsoffered

Public program revenue

Profitability of public programs

Revenue – Custom

41

29%

57%

56%

38%

48%

30%

30%

48%

23%

13%

14%

14%

Length of decision cycle or lead timeof client

Number of Custom ProgramEngagements

Custom Program Revenue

Profitability of Custom Engagements

Who is our competition?

42

30%

41%

45%

56%

58%

52%

14%

2%

3%

Competitors within our institution

Other higher education institutions ascompetitors

Competition from other professionaldevelopment providers

Percentage of Gross Revenue

by Program Type

43

5%

5%

9%

18%

39%

41%

Conferences/events

Other sources

Online/blended custom programs

Online/blended open enrollmentprograms

Face-to-face custom programs

Face-to-face open enrollmentprograms.

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Percentage of Gross Revenue by Program Type

44

Executive Education Continuing Education

7%

11%

11%

22%

29%

42%

Conferences/events

Online/bl. Custom

Other sources

Face-to-face Custom

Online/blended OE

Face-to-face OE

0% 10% 20% 30% 40% 50%

2%

2%

3%

9%

40%

55%

Conferences/events

Other sources

Online/blended OE

Online/bl. Custom

Face-to-face OE

Face-to-face Custom

0% 10% 20% 30% 40% 50% 60%

Percentage of Gross Revenue from Credit or Non Credit-Bearing Programs

45

CREDIT-BEARING PROGRAMS

NON CREDIT-BEARING PROGRAMS

33%

74%

In 2012 it was a 20/80 split

Percentage of Gross Revenue from Credit or Non Credit-Bearing Programs

46

33%

74%

16%

89%

Executive Education Continuing Education

CREDIT-BEARING PROGRAMS

NON CREDIT-BEARING PROGRAMS

Percentage of Gross Revenue from New and Existing Customers

47

43%

58%

NEW CUSTOMERS

EXISTING CUSTOMERS In 2012 it was a 42/56 split

Percentage of Gross Revenue By Participants’ Nationality

48

10%

23%

70%

INTERNATIONAL AUDIENCES

NATIONAL AUDIENCES

LOCAL/REGIONAL AUDIENCES

Changes in Program Reach?

49

40%

39%

42%

48%

18%

13%

Taking programs to other parts of thecountry or world

Attendance by people from other parts of thecountry or world

PROGRAM/INSTRUCTION

Linda

50

Successful new initiatives

•Expansion of programs beyond traditional metropolitan area via partnerships.*

•Unbundling management seminars and allowing participants to have the choice of selecting the seminars they want to earn certificate. Larger and more diverse "audience", growth of program, projection of increased revenue.

•Expanded the number of online programs.*

•Niche products with brand recognition.

Collaboration & Partnership 10.87%

Delivery Format 19.57%

Marketing 19.57%

Programming 41.3%

51

New initiatives (cont.)

•No notebooks for a custom (four week long) program - use only tablets/IPad.

•Alumni events to get a guest lecture from a premier faculty. Yes it was successful. We had over 250 alumni show up and it lead to many sales leads.*

•New website with enhanced RFIs married to landers and implementation of CRM and Marketing Automation tools.*

•New higher level business education format for experienced managers. Result is a contract to conduct program every six months through 2014. It succeeds because it has been a collaborative effort between our faculty and the employee development personnel at the client.

52

Who teaches?

CE EE Other

Tenured 21% 44% 27%

Non-tenured 24% 19% 22%

Practitioner 55% 36% 51%

53

Average Pay per Classroom

Hour

54

<$100 $100-149 $150-199 $200-299 $300-399 $400+

Most institutions pay between $200-$299.

How do you compare?

Average Pay per Classroom Hour

by Instructor Type

55

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

400+

300 - $399

$200 - $299

$150 - $199

100 - $149

Less than $100

Tenured faculty are the highest paid type.

Does size matter?

56

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

400+

300 - $399

$200 - $299

$150 - $199

100 - $149

Less than $100

Average Pay per Classroom Hour

by Market Size Fewer than 500k

Tenured

Non-tenured

Consultant

Less than $100

3% 10% 11%

$100 - $149 19% 26% 9%

$150 - $199 16% 19% 20%

$200 - $299 22% 16% 31%

$300 - $399 19% 16% 14%

$400+ 25% 13% 14%

More than 500K

Tenured

Non-tenured

Consultant

Less than $100

8% 13% 16%

$100 - $149 13% 13% 16%

$150 - $199 21% 26% 16%

$200 - $299 17% 13% 28%

$300 - $399 17% 13% 12%

$400+ 25% 22% 12%

57

Regardless of market size, tenured faculty are higher paid. Smaller markets tend to pay all

instructor types more than do larger markets.

But Exec Ed pays more than

Con Ed, right?

ConEd

ExecEd

58

Right!

Intellectual Property

Ownership

Faculty 40%

University 41%

Shared 9%

Other 7%

Client 3%

59

Who owns the intellectual property used in a course?

Do we pay for course development?

Pre-packaged Course-

ware 3%

Separate Fee

51%

Included with Fee

28%

Don't Pay 13%

Other 5%

60

When do we pay for course

development?

61

2

1

3

28

40

24

23

20

8

11

4

8

3

6

0

0 5 10 15 20 25 30 35 40 45

Open

Custom

Online

Other Don't Pay Development

Included with Instructional Fee Separate Development Fee

Pre-packaged Courseware

Who owns it if we pay for it?

Faculty 41%

University 38%

Shared 15%

Client 6%

Other 0%

Classroom

62

Faculty 40%

University 41%

Shared 9%

Other 7%

Client 3%

Online

When development is paid for, 41% of faculty retain ownership of intellectual property

Program Interests Changes?

63

44%

16%

33%

52%

48%

55%

47%

56%

45%

32%

43%

37%

10%

28%

22%

16%

10%

8%

Interest in multiple courses orcertificates

Interest in resume-buildingcourses

Interest in credit-bearing courses

Interest in totally online courses

Interest in blended or hybridcourses

Need for instructors with onlineteaching experience

Changes in types of courses

or content

64

0%

10%

20%

30%

40%

65

Questions? Comments?

We are happy to help you!