Coursera // Stanford Pre-Business Association

Consulting Team Final Presentation

May 12, 2016

Grace Geng, Economics Class of 2017Graeme Hewett, Economics Class of 2018Andrew Jabara, Economics Class of 2018Sidd Gupta, Economics Class of 2018Sarah Min, Economics Class of 2019

Roadmap

Overview

Customer Profiling

Case Studies

Recommendations

Customer Responses

Summary

Coursera presents unique strategies in the online education space

Coursera EdX Udacity Udemy CodeAcademy

Comprehensivecourses ✔ ✔ ✔

Professionallearning ✔ ✔ ✔ ✔ ✔

Casual learning ✔ ✔

Partner with colleges ✔ ✔

Partner with employers ✔

Subscription ✔ ✔

Free courses ✔ ✔ ✔

Coursera has limited competition within the market segment• Coursera provides a

variety of courses from top universities

• EdX is the main competitor, which offers more free courses and some university credit

• Many other competitors focus on computer science online courses specifically

Coursera uniquely positions in the comprehensive online education segment with significant partnership with educational institutions.

Roadmap

Overview

Customer Profiling

Case Studies

Recommendations

Customer Responses

Summary

Customer brand awareness is strong

120mm new tablet users in 3 years.

89% of Stanford students have heard about Coursera

23% of non-Stanford participants have heard about Coursera

-- Out of the 109 Stanford students surveyed

-- Out of the 81 participants surveyed

32% of total participants have taken at least one course with Coursera

-- Out of the 190 participants surveyed

Most popular type of courses and incentives are professional

The most popular types of courses are Engineering and Business. Main incentives are Professional Certificates.

Young users are growing and willing to pay

Coursera is the one of the most popular online education websites. Most young users are willing to pay. People start to take Coursera courses at an early age.

Comment Highlight - What do you like about Coursera

Affiliations with top colleges and access to professors from those colleges; Huge

volume of participation from colleges and universities from around the world.

“ ”There are lots of different subjects, and you

have flexibility in terms of scheduling or learn during your fragmented time.

“”

Comment Highlight - Potential Improvements for Coursera

Some more interactivity would be nice - there's not much interaction with other people“ ”

Organization of course info, maybe a "quiz" on first steps? -- leading you to what your interests

are and what a good first class would be?“ ”

Course completion has been the major problem and I think having sets of transferable "skill"

badges e.g. debugging, HTML, Writing Proofs etc. would be helpful.

“ ”

End of course qualification that is recognized outside of Coursera“ ”

Roadmap

Overview

Customer Profiling

Case Studies

Recommendations

Customer Responses

Summary

Udacity –

•• Encourages users to take more courses

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•• Allows users to experience all of the content without letting them graduate or get credential

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Recommendations

Roadmap

Overview

Customer Profiling

Case Studies

Customer Responses

Summary

Referral Model

Sampling Model

Award Top Customers

Referral Program

Alumni can share their Coursera experience to get coupons for both themselves and their friends.

Competitors use alumni’s success as their major selling point• Udacity lists its top alumni and their current job titles on their front page• EdX and Linux both have extensive sections how on they have changed their users’ careers

Alumni can share their Coursera experience to get coupons• Upon finish a course, users can choose to submit

their current job or new job progress in exchange for coupon for themselves and their friends

• Past users can send their friends invites through a quick link and receive coupons by number of invitations sent

• Alumni can share their Coursera’s experience through their social media and receive free courses based on the number of likes received

• Alumni database can be used to build online community or serve as content for social media marketing

TBM

• Build a Coursera alumni database, which helps to create a Coursera community and gain recruiters’ attention

• Address the customers’ need for an online learning community

Online Community

An alumni referral program can associate Coursera courses with professional success, create a strong online community, and encourage user retention

Alumni Referral - Build online community and alumni retention

• 126/190 participants in the first survey listed “Professional Certificate” as a reason for purchasing online courses

• Demonstrate what the Coursera certificate can do

Professional Incentives

• Encourage to finish courses

• Invite past users to take more courses

• 5% of customer retention rate typically increases 25 – 75% of customer value, due to their referral behaviors

Alumni Retention

Alumni Referral - Share your experience in exchange for coupons

Alumni can share their Coursera experience to get coupons for both themselves and their friends.

Competitors use alumni’s success as their major selling point• Udacity lists its top alumni and their current job titles on their front page• EdX and Linux both have extensive sections how on they have changed their users’ careers

Alumni can share their Coursera experience to get coupons• Upon finish a course, users can choose to submit

their current job or new job progress in exchange for coupon for themselves and their friends

• Past users can send their friends invites through a quick link and receive coupons by number of invitations sent

• Alumni can share their Coursera’s experience through their social media and receive free courses based on the number of likes received

• Alumni database can be used to build online community or serve as content for social media marketing

Multi-level Referral - Exponential growth and community engagement

Multi-level referral programs can create a network exponentially through users’ personal relationships.

Achieve high growth• Incentivize users to develop their personal network

in Coursera• Transform users into sales force• Increase mentorship among referrals

Increase community engagement• Create a community of users• New users are introduced to Coursera through

multiple angles• The referral program becomes recurring for users

Introduce personal relationships• Users bring in their personal relationship to

Coursera• Increase social media posting content

Multi-level Referral - Get coupons when your friends refer friends

Users can refer their friends to get coupons for themselves, their friends, and middle connections.

Multi-level referral has been the strongest growth point for some companies• NU Skin, a cosmetic company grew its China presence by 320% in the past 2 years through a multi-level referral

program• Other companies such as Amway and Avon all experience significant revenue growth through the programs

Users get coupons when their friends bring in new users• Users have their friends enter a unique code when

creating account • When the new user makes a purchase, all users

signed up in the chain receive a coupon• A chain can go up to 6 levels

Potential risks• Coupon must incentivize users to buy courses

without giving away too much• Dilute the brand

Recommendations

Roadmap

Overview

Customer Profiling

Case Studies

Customer Responses

Summary

Referral Model

Sampling Model

Award Top Customers

• More users means more data to analyze. This gives Coursera the necessary information to help bring new courses and material.

• See what people like and don’t like. Need more computer science, you can do that.

Course Analytics

A ‘freemium’ model can allow Coursera to increase its user base, develop courses based on what people learn, and brings stability to the business.

Sampling summarize

• Encourages new users to learn new material and expand their knowledge base

• Smaller barrier of entry for people. Allows them to dive into the service without having to sacrifice anything

Larger User Base

• Certain number of paid and non-paid users

• This helps better predict what revenues will be in the future, based on number of paid users

• Stability is important.

Stable Cash FlowsTBM

• More users means more data to analyze. This gives Coursera the necessary information to help bring new courses and material.

• See what people like and don’t like. Need more computer science, you can do that.

Course Analytics

A ‘freemium’ model can allow Coursera to increase its user base, develop courses based on what people learn, and brings stability to the business.

Freemium - Encourages users to explore and try new courses

• Encourages new users to learn new material and expand their knowledge base

• Smaller barrier of entry for people. Allows them to dive into the service without having to sacrifice anything

Larger User Base

• Certain number of paid and non-paid users

• This helps better predict what revenues will be in the future, based on number of paid users

• Stability is important.

Stable Cash Flows

Freemium - A system that is known to work

Alumni can share their Coursera experience to get coupons for both themselves and their friends.

Competitors use their ability to offer free courses as a major selling point• Udacity shows its free courses on the very front of its website• EdX touts its free courses in the variety of industries

People want education to be free• Education, especially online education is expected

to be free or low cost• The freemium model allows this to happen while

giving people the option to purchase more/different subjects and methods or learning

• Gives the ultimate price discrimination model for customers

• Coursera gains the ability to gauge how many people use the service and the potential market of the company

• Nearly every non-paying customer can be converted into a paying customer

Direct Increase in Revenue• According to our survey, a large number of people

wanted Coursera to offer more free courses that led into a gateway for paying for services

• Students and adults have no problem with paying for education

• Test Prep is a multi-billion dollar industry1• The barrier to entry is too great currently for the

average customer

1. http://clients1.ibisworld.com/reports/us/industry/Default.aspx?entid=1544

Specific recommendation:• Give a 14 day free trial• 14 days are better than 7 because many courses take

months • Make offers through voucher codes on social media, but

only allowing one code per user

Advantages:• Gives users exposure to all products but only for a limited

amount of time• Low marginal cost of free trials makes it an optimal

strategy

Risks:• People manipulating the system by creating multiple

accounts to get multiple free trials• The first 2 weeks must be impactful so we can hook the

users

Free 14 Day Trial – Increase exposure with low marginal cost

A free weekly trial would be an effective method of attracting paying customers because it gives them the paid model experience without as much of a loss as expanding the freemium model.

Recommendations

Roadmap

Overview

Customer Profiling

Case Studies

Customer Responses

Summary

Referral Model

Sampling Model

Award Top Customers

• 54% of customers would consider increasing the amount of business they do with a company for loyalty rewards1

• Acquiring a new customer can cost five times more than satisfying and retaining current customers2

1. http://web.clickfox.com/rs/clickfox/images/cf-survey-results-brand-loyalty.pdf2. http://www.destinationcrm.com/Articles/Web-Exclusives/Viewpoints/Listen-to-the-Voice-of-the-Customer-53239.aspx

When students are rewarded for passing within a certain time limit, they have incentive to study harder, causing them to:Pay more attention to the presentation of course materialUtilize more of the provided Coursera resourcesHave a positive view of the experience following completion of the courses

A Rewards Program can allow Coursera to increase customer satisfaction, build customer loyalty, and retain current customers.

For customers who complete and pass a certain number of courses:

• Provide coupons for use on future courses following certification

Benefits:• Gives customers motivation to use the site more frequently• Encourage paid users to finish the courses• Increases loyalty of the customer base • Gives customers incentive to continue taking more courses on the site

Risks:• Those who don’t receive the reward may feel

discouraged• Customers who receive rewards may not necessarily

be loyal customers

Users can receive coupons for future use when they pass a certain number of courses.

Roadmap

Overview

Customer Profiling

Case Studies

Recommendations

Customer Responses

Summary

Second Coursera survey for 25+ users

● Respondents: 133 Stanford Alumni● 130 over the age of 25● 63.2% heard of Coursera beforehand

Promotional strategies preferred by people who know Coursera

For people who have heard of Coursera, a free introductory course is the most popular incentive, followed by a free trial week and asked by a friend/family member.

Certificates given

Asked by a friend to take together

Asked by a family member to take together

Taken the free introductory course

Experienced a free one-week trial to explore courses

Promotional strategies preferred by people who have not heard of Coursera

For people who haven’t heard of Coursera, a free one-week trial is the most preferred, followed by free introductory course and asked by a family member/friend.

Certificates given

Asked by a friend to take together

Asked by a family member to take together

Taken the free introductory course

Experienced a free one-week trial to explore courses

• The majority of people want to obtain recognition in exchange for taking a Coursera course to completion

• People also highly value the recommendation of friends, more so than family

Summary of people’s incentives for completing courses

Comment Highlights: What would convince you to take a paid Coursera course?

[A 1-week free trial], nothing else would convince me, except a friend who has taken a

course and had a valuable experience.“ ”Friend referral is only one I would even consider.“ ”

I would take a paid Coursera course if I needed it for work, or if I thought it would be a lot of fun.“ ”

Roadmap

Overview

Customer Profiling

Case Studies

Recommendations

Customer Responses

Summary

Final Rankings

Top Choices: Free Introductory Course or Free One Week TrialSecondary Choices: Friend Referral or Official Recognition/Certificate