MANAGEMENT

MASTER PLAN

**Your Student Value**

Because so many of our students are kids, when we identify our ideal student, we need to include the family in the equation.

1. What is your ideal family for a child student? Get very specific.

a. What is their income level?

b. Is having a stay-at-home mom better for you enrolling and keeping students versus working moms?

c. What are the common benefits they are looking for?

d. What is the most important decision criteria for them?

e. Home proximity to the school?

f. How many referrals does the family send you?

g. How many special events does the student attend?

h. How much equipment over the requirements do they purchase? i. How long do they stay with the school?

j. Do they cash out, take payments, pay in advance?

2. What is your ideal adult student?

a. Male or female?

b. Single or married?

c. Income level?

d. Education level?

e. Home proximity to the school?

g. With kids or without?

h. How many referrals does the student send you?

i. How many special events does the student attend?

j. How much equipment over the requirements do they purchase? k. What is the most important decision criteria for them?

l. How long do they stay with the school?

m. Do they cash out, take payments, pay in advance?

2. Keep a journal next week of how much time you spent with the ideal students/families and how much you spend with the “less than ideal” students.

3. Create a strategy that allows you to spend more time with the ideal students for retention.

4. Create a marketing strategy that will target that ideal student and/or family to bring more of them into the school.

Valuing The Student / Family

Knowing your student value is valuable to you for many reasons.

1. You can project future earnings

2. You can know with certainty how much to spend on marketing

3. You can plan more effectively with real numbers and expectations

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.

Your Enrollment fee is……………………………$75.00 Lessons ($65/month x 12)……………………….$780.00 Seminars (avg 1/yr.)………………………………$35.00 Testing fees (3/yr. $25 ea.)……………………….$75.00 Equipment purchase……………………………….$190.00 Total for one year…………………………………..$1,155.00

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.)………………….$1,155.00 Times 250 new students/year…………………$288,750

Less 60% attrition rate………………………….$173,250 Total net worth for year…………………………$115,500 Divide by 250 total sign ups……………………$115,500/250 Adjusted worth of each new student………….$462

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 gained if you could lower your attrition rate.

Student Value Calculation Two

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

Total gross divided 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.