There are a number of ways to measure student value. Regardless of the method, your goal is to have a student value of $1,000 per student.

Student Value Calculation One

Take into account average drop out rate, lessons, testing fees, seminars and equipment purchases. Below is an example of a one year period. The numbers are on the lower end just to keep this simple to follow.

Your Enrollment up fee is . .......$75.00 Lessons ($65/month x 12).........$780.00
 Special Events (avg 1/yr.)..........$35.00
 Testing fees (3/yr. $25 ea.).........$75.00
 Equipment purchase.................$190.00
 Total for one year.....................$1155.00

This is the worth of each new student if he stays for one year. If you estimate that you will enroll 250 new students each year and determine that only 40% of those students will last the year (this results in a 60% attrition rate), your figures will look like this:

Worth of each student (1 yr.)..............$1155.00 Times 250 new students/year............$288,750.00 Less 60% attrition rate......................$173,250.00 Total net worth for year.....................$115,500.00
 Divide by 250 total enrollments..........$115,500/250


Adjusted worth of each new student....$ 462.00

The total adjusted worth of each new student after factoring in the drop out rate is $462.00, not the original figure of $1155.00. (This value could be further refined but should give you an idea on how to proceed.) You now have a figure from which you can determine the net gain if you boosted enrollment figures, how much you will spend to acquire new students, project sales, project what percentage of your income will come from new student enrollment, determine the value of an ad campaign, etc. Note that you can also see how much more could be had if you could lower your attrition rate.

Student Value Calculation Two

This is an easier formula and is one that the Jhoon Rhee system has used for decades.

Total gross multiplied by the number of first intro lessons.

If you are doing 10 intros per month that’s 120 per year. Your gross should be no less than $120,000 which is a student value of $1000 per student.

How to Use Student Value Information

Let’s say your goal in the next 12-months is to gross $100,000 and you are currently grossing $50,000. You currently have a student value of $500.

Since you want to increase gross by $50,000 you will have to enroll and keep 100 new students to produce that additional $50,000.

If your student value was $750, you need just 66 new students. If your student value was $1,000 you would need only 50 new students to reach that goal.

Student value provides a unique way of planning for the future and if you think about it, this too can give you a way to monitor yourself to see if you’re actually reaching your goal.

Related Resource

Client Value Calculator