Rue Changes Strategy

Rue Changes Strategy

COMPANIES by Dave Szymanski | Tampa Bay Editor

The online training company is working primarily through institutions to reach more health care professionals.

One of the first things CEO Michael Dykstra did after he joined Clearwater's Rue Education Sept. 1 was talk to health care workers, especially nurses, the company's core customers.

Dykstra had five nurses in his family, so he understood their training and education needs. He studied the competition in health care education and trends in health care.

Then Dykstra worked with employees at the two-acre corporate campus to develop a three-year plan to double revenues and profits at the company, which offers education to health care professionals online and through books and study guides.

In that plan was a significant change for the 18-year-old, privately held company: It would shift its focus and deal primarily with institutions, such as universities and technical schools, to deliver the company's health care training. Previously, it dealt primarily with students.

"The economies of scale are so huge," says Dykstra, 52, a Wisconsin native. "It's just a much more effective way to expand."

However, the new strategy will require building closer relationships with colleges and universities all around the country. It is also working more closely with hospitals and nursing homes to find students and has an affiliation with the National Education Alliance to provide education through universities.

"When you look at a state like Oregon, the name Rue does not have a lot of name recognition," Dykstra says. "But if we have relationships with Lower Columbia and the University of Texas at El Paso, we start to get some brand association, some appeal to students."

Having local relationships with schools will potentially help Rue reach more students. It will also boost its national reach.

A lack of university instructors gives Rue an opportunity to help nurses and other health care workers earn their degrees. It serves customers in all 50 states, but it sees room for penetrating deeper into each state.

Its revenues and profits grew for its first 15 years but have flattened in recent years as competition grew. Some of the competition, like the University of Phoenix, Strayer University, Corinthian Colleges and Kaplan, are larger, better-known brands with a bricks-and-mortar presence. Still more companies are moving into online education.

However, unlike its competitors, which offer a diversity of classes, Roe is focused solely on health care training and education, and even more specifically on nurses going from LPNs to RNs.

Within that niche, it has also reached out to offer other services, such as online tutoring.

"All of these things benefit the adult learner and improve our success rates," Dykstra says. My mission is to grow the company, take it to the next level and to the next size in market share and profitability."

Job statistics support Rue's growth plans. Health care represents 11 million jobs in the United States. About 14% of all new jobs in 2007 were in health care. Fifty percent of all health care jobs require at least a two-year degree. Twelve of every 30 jobs in the United States are in some kind of health care service. Health care is the No. 1 U.S. industry. The second is education.

In addition, as the U.S. population lives longer and ages, many health care workers will soon be retiring, fueling a need for more nurses, respiratory therapists, x-ray technicians, physical therapists, paramedics, home health aids, medical records technicians, emergency medical technicians and other health care workers.

"A lot of these trends are working in our favor," Dykstra says.

Rue's materials are researched and written by professional educators with at least a master's degree (most of Rue's authors have a Ph.D.) in the field for which they write. Rue's authors also make themselves available to clients to answer technical questions. It is estimated that Rue clients have earned more than 600,000 college credits.

The company also tries to emphasize the importance of positive student experiences.

"We drive it through the culture," he says. "When you're dealing with students, for them to obtain certification is a life-changing event."

That outcome will help Rue accomplish its mission: To become the No. 1 education service provider in health care. More than 20% of its business comes from referrals from happy students.

"All else will follow if we put students first," Dykstra says.

Dykstra is not a doctor, nor an educator. Before Rue, Dykstra led direct marketing and learning management companies including Gyrus Systems, Experient Technology, RelationServe and Hyphos360. His accomplishments earlier in his career include international business initiatives for CSX Technology and consulting with Price Waterhouse.

What else would Dykstra tell other CEOs trying to improve their companies?

"You have to understand who you are serving," he says. "Make it real in your company so the voice of the customer is heard, understood and internalized. Have an incentive system aligned with the voice of the customer to produce positive customer outcome."

AT A GLANCE

Rue Education

Ownership: Privately held

Business: Online education to health care workers, primarily nurses.

Year founded: 1989

Headquarters: Clearwater

Employees: 65

Revenues: $20 million projected in 2007

Web site: www.rueed.com

REVIEW SUMMARY

Company: Rue Education

Industry: Clearwater-based online education firm for health care workers

Key: Team with universities to build the brand.