Do higher paying students always default?

[Eric_H]

Hello,

I have noticed a trend and was wondering if other school owners have seen the same.

Typically there are students who will come in, get excited about training and sign up for every program the school offers - only to be gone in 3 months. One of my training brothers thinks that it might be because the student is paying extra for every program, and that a $200/month hobby is easier to drop than a $80/month one. I have taken the alternative approach in that those people will likely be gone in 3 months regardless of what you charge them, so if they want to pay extra for more or different training you should let them. Rather than trying to control or limit people, just accept that the shelf life of an average student is pretty low.

What's your opinion?

 

[LuckyKBoxer]

Hello,

I have noticed a trend and was wondering if other school owners have seen the same.

Typically there are students who will come in, get excited about training and sign up for every program the school offers - only to be gone in 3 months. One of my training brothers thinks that it might be because the student is paying extra for every program, and that a $200/month hobby is easier to drop than a $80/month one. I have taken the alternative approach in that those people will likely be gone in 3 months regardless of what you charge them, so if they want to pay extra for more or different training you should let them. Rather than trying to control or limit people, just accept that the shelf life of an average student is pretty low.

What's your opinion?

I have found the opposite to be true. The key is if they find value in what they are paying for or not.
I would suggest if they are signing up for the full boat program, and then leaving soon after that you have two things going on.
1. an overzealous salesman who is signing them up for everything regardless of what they really want... you should work with whoever is selling the memberships to fine tune the process and fit people better
or
2. you have people that are not instilling confidence in the students running one or all of the programs, either they are unqualified to teach them, dont want to teach them, or teach them poorly.
or
3. you have an overpriced program for your area, and they are finding a better option for cheaper.
I could go on and on with possibilities.
but what does your exit questionaire show? or do you do one? You should be asking every single person who leaves why they leave, and what could be done to keep them.
Its fairly hard to come up with a plan of attack for retention if you dont know why students are leaving.

 

[Eric_H]

I have found the opposite to be true. The key is if they find value in what they are paying for or not.
I would suggest if they are signing up for the full boat program, and then leaving soon after that you have two things going on.
1. an overzealous salesman who is signing them up for everything regardless of what they really want... you should work with whoever is selling the memberships to fine tune the process and fit people better
or
2. you have people that are not instilling confidence in the students running one or all of the programs, either they are unqualified to teach them, dont want to teach them, or teach them poorly.
or
3. you have an overpriced program for your area, and they are finding a better option for cheaper.
I could go on and on with possibilities.
but what does your exit questionaire show? or do you do one? You should be asking every single person who leaves why they leave, and what could be done to keep them.
Its fairly hard to come up with a plan of attack for retention if you dont know why students are leaving.

Hey LuckyKBoxer,

You raise some good points, to address them as best i can.

1) Generally that is not the case, our school doesn't really do "sales" in any sense (which is a choice by the owner). Usually it's the student asking to join additional programs.
2) I hope that's not what's going on, but it deserves looking in to.
3) We price check regularly, so I know that's not an issue.

We do an informal exit interview, the largest detriment so far has been change in job status (employment here is a total bear right now), then bankruptcy/divorce, and that is followed by they just don't like it as much as they did when they started.

Out of those 3, I can only really attempt to attack the 3rd one. Everyone has given a different reason as for what they liked/didn't, so I was wondering if it was more of the "shiny-ness" of a new hobby wore off and they just jumped to the next thing. What have you seen in your school?

 

[MA-Caver]

OR it could be rich kid syndrome.
I've a friend who's parents income is somewhere around a cool million annually... net. He got into caving in a big way... buying up every piece of equiptment that I recommended and then some... even getting me a few new pieces and went at it hard-core for about six or eight months... then came over to my house one sunny afternoon with all his gear and simply gave it all to me... asked him if he was out of his mind and he just shrugged and said he's had enough wanted to check out sky-diving, and went into that with the same gusto.
His parents paid for it all without complaint when he gave it all up and moved on to something else. Last time I saw him (about 10 years ago) he had plans to join the navy and get into the SEAL program. Dunno if he did or not. Doesn't matter... he'd probably find a way to get out of it and move on to something else.

You're going to find folks who are all out wanting to learn and get all into it and not miss a single lesson and then one day you'll find yourself asking... "do you remember that guy/gal?" Some folks still just don't get it when you explain to get a BB will take many months or even several years. Some will stay that long get their desired BB and then poof they're gone, but hey... they're bad *** because they got a black belt in whatever!

To be fair they may have something come up in their life that will inhibit their training schedule no matter how flexible you or the other instructors may be. So hey it was fun it was real and thanks a bunch for everything you taught me.

If they approach you and say... well, I've lost interest or whatever reason they come up with just nod, shake their hand and wish them well. They helped your school's income for a little bit so be grateful for that.

Attend to the ones struggling to make payments but are earnest students and are showing that they're around for the long haul.
One thing that kinda frustrates me is... if you get a "burn-out" who has paid for X number of months in advance and has only attended X number of months and has then disappeared... that the monies they spent (if not refunded) isn't shifted to another student who may be struggling financially. Like hey Tom paid for 12 months and only used 4 1/2 months worth and has left the school... what about those remaining 7 1/2 months left? How about moving it over to Harry's account who sometimes comes up short at the end of the month and even has to skip because he can't afford it (for legitimate reasons) but is showing real promise in class for the past 13 months since he arrived?

Some would say that's not good busine$$ sense and well... maybe it's not but it's helpful in these tough times no?

 

[Balrog]

In our school, everyone pays a flat rate. I tried the so-called "value added" pricing approach and it didn't work out.

 

[LuckyKBoxer]

Hey LuckyKBoxer,

You raise some good points, to address them as best i can.

1) Generally that is not the case, our school doesn't really do "sales" in any sense (which is a choice by the owner). Usually it's the student asking to join additional programs.
2) I hope that's not what's going on, but it deserves looking in to.
3) We price check regularly, so I know that's not an issue.

We do an informal exit interview, the largest detriment so far has been change in job status (employment here is a total bear right now), then bankruptcy/divorce, and that is followed by they just don't like it as much as they did when they started.

Out of those 3, I can only really attempt to attack the 3rd one. Everyone has given a different reason as for what they liked/didn't, so I was wondering if it was more of the "shiny-ness" of a new hobby wore off and they just jumped to the next thing. What have you seen in your school?

well you kind of answered your own question here.
based on your two posts anyways.
If people are losing their jobs and pulling back from all non essentials then it probably doesnt matter if you charge 500 dollars or 50 dollars a month, it sounds like they are leaving. A bankruptcy/divorce does not necesarily mean they have to leave, it may be an excuse to leave, or they may be really busy handling a nasty divorce/bankruptcy, or they might truely be broke. Regardless those two are generally something you can not control.
The third is the key. If you are not addressing it then you are doing yourself a disservice. That is completely in your control, and the next step to fixing it is to find out if everyone is leaving at about the same point in your system, meaning there is a problem at that point, or just before that point that needs addressing, or if it is spread out all along the system, which means you have some serious flaws either in the instructors, the curriculum, the facility, or all areas combined.
my personal experience is you have to provide a full experience for students, meaning you have to address their whole person... Mind, Body, Heart, and Spirit. If you do this, then you instill lifestyle changes in a person and that type of a person stays with you.
Addressing the Mind means that they are hitting on their need to learn, understand, create, or build. Addressing the Body is the physical and health aspects, the need to live, eat, survive, be fit and energetic. Addressing the Heart hits on the emotional side, the need to love, develop relationships, bond with others, care and be cared for. Addressing the Spirit covers the needs to contribute, feel a sense of worth and leaving a legacy.

The martial arts schools that tend to be the most successful find a way to address all four of these areas, regardless of the system, or style. If you are not addressing all of these then you are leaving holes for different people to feel they are lacking in different things and eventually go search it out elsewhere.

 

[LuckyKBoxer]

In our school, everyone pays a flat rate. I tried the so-called "value added" pricing approach and it didn't work out.

I think that it has its place as long as it is not overused, and abused.
for example when we offer value added programs.. they are exactly that.. extra programs that are in addition to what they are doing anyways...
instead of just the Karate classes they can pay an extra fee and participate in the boxing, kickboxing, jiu jitsu, and MMA classes. There is a clear value in each individual program so the investment associated with it makes sense, they are not needed to participate and progress in the Karate system, but will absolutely help a student in his pursuits.

where I see problems is when a school offers multiple add ons for their primary service, and create a tiered system where some students will feel inferior if they do not do the full program. So you have a karate program, a black belt add on, a leadership add on, a instructor add on, a competition add on, and so on and so forth.. the lines are fuzzy and the students start to wonder where the difference is in the regular program and these multiple add ons. It gets discouraging, and frustrating, and demeaning at times and they go away.

 

[Bruno@MT]

The only option we have is 1 or 2 times per week training.
Any serious student trains 2 times but we have one or two who train only once per week. Hence they pay less.

I burned out on training once, when I was in college finishing my degree.
The mistake I made was to train more and more, simply because I had the opportunity. So now I pace myself and stick with 2 times per week, and I intentionally do not participate in international seminars. I know myself well enough that if I allow myself to train more and more, I will burn out again. The only extra training I do is on my own at home if the weather is nice outside.