Monday, January 30, 2012

Customer Service and Students' Returns on Investments

What are the four basic indicators of a successful school in its operations and well-being?
Indicator 1 Population.
Indicator 2 Population. 
Indicator 3, No surprise here--Population.
Indicator 4, Customer service levels.

If a school is able to maintain and grow its population, then all is in order. Note I said population. Not admissions. Hitting admission numbers does not indicate the health of the institution, particularly if a school is losing 30 percent or more of its students. Simply put, if a sales team sells 100 pet rocks on Monday, but by next week 30 are returned, then how many were really sold? The sales team may be celebrating hitting its goal but the CFO is dying because the lost revenue and costs associated with selling and processing returns have basically wiped out any profit. All the company has learned is that the pet rock can be sold but has very little customer retention power and may just have been sold in a way that can lead to bigger issues down the line. The direct correlation of revenue to tuition and fees in a college or university is undeniable. Tuition is provided only by students who attend and then stay in the college. If they leave they stop paying tuition and fees. Therefore, retention is key to providing an institution the revenue it needs to run its operations. 
There is another correlation of academic customer service to retention. Academic, not retail customer service accounts for up to 84% of all reasons why students leave a college as research conducted by AcademicMAPS over the past seven years points out. AcademicMAPS surveyed and interviewed 640 students a year after they had dropped out of a school to find out what they left.  The passage of a year as well as its non-affiliation with any particular college or university provided the students the distance and anonymity for more open discussion on actual attrition causes.  The students were randomly selected.  They were often at their new college, one that we had been hired to audit or present training or a presentation. The chart below is a compilation of that research on why students really leave a school.

What was discovered is not what ex-students might tell a school official since they will generally "play to the interviewer" during their meetings with your exit counselor. (If the school has one.)  Students will most often intone "personal reasons" as their reason/excuse for leaving the school. They assume the interviewer will either not dig into their personal lives or will buy the vague soap opera they spin because they know we are basically voyeurs rather than intervention people. We do love a good story, even if it may not be true or the real reason the student is leaving. But then again, if it is "personal reasons" most officials are happy to accept that for two main reasons.  First, most colleges accept that “personal reasons” is a valid basis to leave school.  Second, if students leave for personal reason, neither the college nor the individual are not really accountable for some failure in the department, school or our so-called systems. Can't be held responsible for their personal problems, can we?
            But when AcademicMAPS personnel dug a bit, it was discovered that the personal problems fall into a few major categories which indicate that leaving students do have a sort of personal issue - a customer service issue - with the school. Most often, they said didn't like the way they were treated and that they took personally. They tell us that they felt the school was indifferent toward them as a person, as a learner, or as anything but tuition revenue. A very common statement was “all they seemed to care about was me paying on time.” This feeling of apathy from the school is the major reason 30% of the students said they were motivated to leave. This feeling violates our Good Academic Customer Service Principle 1 "Everyone wants to attend Cheers University where everyone knows your name and they're awfully glad you came." Once they feel you do not care, they are on the way out the door over to Gary’s Old Towne Tavern.
The second major reason students quit a school is dissatisfaction with how the staff treats them. Staff here means anyone who works at the college from maintenance people on down.  Administrators are staff. Faculty are staff. Everyone is in a staff relationship to the clients, the students. Everyone is there, or should be there, to serve and meet the needs of the students, the school’s primary customer.
Generally students will point out some clerical, management or administrative staff as the primary poor customer service villain.  This is because students are more lenient with faculty in general until one of them blows it big time. Sort of like the belief voters have that their local representative is honest and sincere until caught in an airport men’s room. Then all hell breaks loose. The college’s landing strip becomes filled with helicopter parents and it’s “threaten to call the lawyer’s time.” Students want to believe their teachers care about them even if they don't seem to really show it much. They will remember the slights from the clerical staff and try to overlook indifferent even cruel Paper Chase Charles W. Kingsfield type faculty member until they realize that those faculty are hurtful and not just demanding. But that can and will change if the professor shows his or her cruelty in the grade a student gets after putting in what he or she felt was hard work and effort. Grades have become the coin of the realm for students and they believe they are paying for them in one or another way – study and tuition. How many times have you heard students refer to how much they are paying and how much they deserve since they pay so much to go there? Moreover since a major motivator for staying in a school is getting a job, lower than expected grades are a disincentive dis-incentive to many students. Students who do not receive what they believe was their effort in their grades they often feel they have been or are being maltreated and they will not stay and pay for that. So they leave.
The belief that customer service is equated to giving easy grades is not true. Customer service is not in the grade itself but in a combination of the effort for the grade and the assistance provided to be able to achieve a higher grade. The situation is anometic .Students who do not put in the effort or seek help accept what grades they get.  Students who make a sincere effort expect that the college will provide the services to help them succeed with an acceptable grade.  The services such as tutoring by qualified tutors who can actually help students learn the material, review assistance, additional study material and supplementary opportunities to understand the information or achieve the skill needed to obtain an acceptable grade are customer service.
             When students leave a college for what he or she categorizes as personal or financial reasons does not mean they don't go to another school although they may tell you they problem that calls for taking time off. They don't want to insult the interviewer with negative reports about his or her colleagues or the school.  The students avoid this not because they are afraid of hurting someone’s feelings but because they don’t want to hear a defense or excuses. They want to get in and out of what they feel to be an unsettling experience as quickly and painlessly as is possible. They also will claim “personal reasons” since they do not wish to explain their real reasons for leaving if they can avoid it. Confrontation is not a sought after event.
The 2010 NSSE study indicated that over 60% of students attend more than one college prior to graduation. No indication of how many try more than one school and quit higher education completely. That should not comfort people if their school is one that loses more than receives students. Misery likes company but there are no revenue dollars in the misery of losing a large portion of enrollment, especially to those who get laid off to meet budget as a result of too many drops.
The third major reason students attrit is they are just plain unhappy with the school. The institution has spent so much time and money to get them to come that the school forgets it is much easier and much less costly to keep a student than to recruit and enroll them to begin with. Before classes, there are numerous communications, well planned activities at orientations, events, even celebrations to make sure the students will show up. Once classes start, most schools seem to forget to keep up the effort that says we are glad you came.
Even if a school tries to maintain a focus on making students feel welcome during freshman year, it almost always ends at most every school as soon as sophomore year rolls around.  Now, it is assumed, the students are mature, focused and will remain satisfied with the college. That false assumption leads to more dropouts. Just look at the chart and it will be seen that the third primary reason for dropping out is the students were just plain unhappy. Taking away the focus after freshman year is a sure way to add to potential dissatisfaction. Once any institution provides good customer service, it cannot, it should not be taken away. And it is so simple to maintain actually. In fact, all the reasons for leaving a school can be alleviated rather easily.
Customer service and a student's belief that, "My investment in this school will be met if not exceeded" in three types of ROI are the key to population. If students, and staff, do not believe their F-ROI (financial return on investment); E-ROI (emotional return on investment); and A-ROI (associative return on investment) are being positively impacted by the customer service level they receive, population is in trouble. And the school's well-being, finances, and morale are also in trouble.
Population stability and growth are primary indicators. Hitting retention says the students are pleased with the school, their education, and experience. Faculty members are happier because students are more receptive to instruction, do their work on time, and are more compliant with faculty directions. Students are even pleased to go to class. Faculty morale also increases since it is much easier to teach happy and committed students. The business officer is pleased because the college will maintain solid positive revenue, on-time collections and thus operating margin/EBITDA (earnings before interest, taxes, depreciation, and amortization). And believe it or not, our research indicates that if students are pleased with the customer service they receive, a school can even raise tuition and not suffer adverse effects in student acceptance.
How to do all this? Focus on customer service.
As long as students, faculty and administration are all pleased with the school, admission targets might be missed, and that is not unusual in the tight competitive market all schools are trying to draw students from, yet revenues, margins, and financial goals can be met with population maintenance/retention through increased customer service. Furthermore, if everyone is happy and population retention leads the way, admissions may have a more achievable goal. That can lead to reduced stress and will lead to fewer angry admissions people. Angry admissions staffers can hurt admissions, retention, and the whole school as the public questions the school.

The Three ROI's
Return on Investment is normatively a financial formula. (ROI = Return/Investment yielding a hoped-for positive percentage.) The basic ROI formula works with colleges and customer service not as a financial plus or minus percentage basis, but on more personal and psychological formulations composed of feelings and perceptions that the investment is worthwhile. If it is, the student is comfortable, even happy, and stays. If the student does not feel there is at least a financial, emotional, and associative equity between what he or she invests and what the school returns to him or her, there will be a negative sense of ROI and the student will likely leave or trudge through unhappily, bad-mouthing the school whenever the chance arises.
F-ROI (financial return on investment) works on two levels for students. The first F-ROI is the perception of whether or not, "I am getting my money's worth. Do I feel that the money I am paying to the school is being well spent on me?" The second F-ROI is whether or not the student believes that staying at the school will finally lead to the job and career that he or she came to the school to acquire.
There then are two separate but related equations at work. For F-ROI the evaluation is a judgment of the value of a wide grouping of what might at first seem to be disparate issues that range from the obvious (such as perceived value of classroom instruction, whether or not faculty seem to care if students understand and are learning, to how staff treat students and even important physical issues such as facilities, parking, lighting, and so on). One college I studied had a low collective student sense of the F-ROI (41 percent positive) with the two major concerns indicated: "weak instructors" and "dirty bathrooms." The F-ROI was raised a quick sixteen points by cleaning and then painting the bathrooms. And retention also went up by 4.3 percent that semester.
The F-ROI that goes to future career returns on the investment is not simply of financial investment through tuition, fees, books, etc., but the feeling that "this school will help me obtain the job I am going here to get." Students must believe that the college will not only assist them in their job search but the school's position and reputation will facilitate obtaining that first job. If the school helps the students prepare for applying for jobs or, even better, if the school has an active outreach to students on careers and assistance in locating possible jobs, the F-ROI will stay in the positives.
The E-ROI refers to the emotional investment that a student and that student's family make in the school. When a student decides to attend a college, that person is making a commitment based on an expected return on investment such as the financial ones spoken of above. But, he or she is also making an emotional decision as well that is somewhat akin to an engagement. Trust, attachment, and an allegiance between the student and the school is developed in the student's mind and feelings. The student is making a pledge to the school that he or she expects will be returned. That pledge is, "I will trust you to do right by me. I will put my education and thus my future in your hands. I will trust you to treat me fairly and provide me an honest opportunity to learn and get that job I want to love." Very few, if any, students will simply make a cold business-like decision to apply, taking a chance of rejection and then finally accept the offer of engagement from a college without emotion involved. Social psychology experiments have indicated that even if applicants were not sure about the school at some time, upon acceptance, they will begin to look more favorably on the school and decide that it was a better school and choice after all.
Though students are transferring from colleges at a record rate and attending more than one institution to graduate, according to studies such as the 2006 National Survey of Student Engagement, students enter a school with a belief that they will complete a degree at that school. Students who attend to a two-year school, for instance, enter with the intention of transferring to another school after graduation, yet many do not stay to graduation. They leave.
Why? Because they fall out of love with the college. They do not perceive that their emotional investment is being returned by the school. The students I have interviewed have indicated two major perceptions of why they fall out of love with a school. First, they say, "The school only cares about me for the money they get." They see the school as putting either money ahead of the students (too many adjunct faculty, not enough sections of courses, poor scheduling, canceling classes at the last minute, not enough staff, aggressive bursar and collections letters). Second, the school does not reach out to them and show it cares about the student as a person with integrity and needs (can't find faculty during office hours, can't get extra help when needed, faculty do not seem to realize students have lives too, administrators don't care or solve problems, staff are cold or rude, no one smiles, students get the run-around also known as the shuffle, issues go unresolved or with just a decision that is unexplained, etc.).
The last is A-ROI (associative return on investment). The associative is the sense that by going to this school, “I am saying something about me and my values and character. By attending I am increasing my social standing. I am investing my standing and self-value in the school.” This can be seen in the clothes that students wear, especially collegiate or sports-related hats, tees, and sweatshirts. When a student wears a T-shirt, for example, with the name of a college adorning the front, it is done to make a statement to the world about the wearer. If a student is wearing the name of a college such as Harvard , University of Michigan, or the University of Miami, or one of the other name-brand colleges, he or she is trying to tell the viewer to associate him or her with the school--even if they do not go there. It is a statement that the student wants to be associated with the strength and value of the school's name.
The student is saying, “I am part of this school and it makes me feel good.” It improves value and recognition. That is why when I was associate provost at the University of Cincinnati (Ohio) and the Bearcats men's basketball team made it into the NCAA Final Four, applications shot up. People wanted to be associated with a successful basketball team/school. One way a school can judge if its associative value is up or down is by counting the amount of logo- or name-laden clothing that is sold in the bookstore. If students want others to know they go to the school, they will wear the association.
The ROI on association can be a strong one if the student feels that the school is well known and respected in the community. If it is not, the school can create strong associative value by providing excellent service to the student, who will then takes pride in in the institution, even if others do not know it is so good. A school can overcome lack of current recognition if the services are strong enough. "It is an excellent school and I know it, so I feel great being associated with it even if you haven't heard of it.” This is then a more personal ROI but still a very important one. Lose the student's belief in the school and the A-ROI drops. When that happens, the student does not want to be associated with the school and is a certain candidate to transfer.
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fred said...

Incredible article. I have been looking at retention from an administrative perspective, particularly bridge programs, and the literature as a whole supports your message here. It appears that the bridge programs that perform strongest, are not the acadmically rich, but the programs with a mix that makes students FEEL the most valued!

fred said...

This is a great article and for doubters - I am finding survey of the literature regarding minority bridge programs for freshmen, supports the themes here. While it might also seem to be "common sense", my studies seem to indicate that the most successful bridge programs in terms of persistence, are those that promote self confidence and sense of appreciation in the students, as opposed to those promoting academic or study methods. This article should be required reading by all levels of administration.