How a Canary can save your School…

Apr 22, 2010 | Uncategorized

At the advent of the Industrial Revolution, there was a sudden accelerated demand for coal. It was seen as the crucial fuel needed to operate various aspects of factories and later steam plants.

Coal miners located primarily in Western England and Wales were suddenly required to access coal reserves from underground via tunnels, because open pit coal reserves were quickly mined out. This was very dangerous work with miners taking their lives in their hands every single day. You would think the main way in which these poor fellows would expire would be through the collapse of these poorly designed dingy tunnels. While tunnel collapses did occur, the greatest risk for coal miners in the early days of the Industrial Revolution was death by methane gas, a natural but lethal bi-product of coal. Miners would inadvertently release a methane pocket through their digging efforts and this silent killer would poison the miners underground rapidly.

A Life Saving Innovation
The coal miners and coal barons went scrambling for an innovation that would solve the issue or at least create an early warning system that would allow the miners the chance to scramble to safety, to live another day.

The innovation came in the form of a benign little bird, the Canary. Through testing they realized this little creature had an extremely sensitive respiratory system. The little bird would expire when exposed to traces or dilutions of methane gas that would not kill a human.

Miners would take canaries in little cages into the coal mines, watching constantly for signs the little birds would suddenly keel over. Canaries in coal mines saved tens of thousands of lives and allowed for the mass production of coal, thus accelerating the industrial revolution through a crucial stage of development. If your heritage is from Newcastle or Wales, the odds are reasonable you can thank a 200 year old Canary (not that he’s still around) for your very existence.

Coal, Canaries and Enrollment Management???
Accountants have in place early signals that warn an enterprise of financial risk. For example; ratios such as Average Days Outstanding can quickly identify the relative health of ones receivables.

While prevalent in finance, few schools have early warning systems to save a school in the marketing, admissions and retention areas. I shake my head because one can argue that without an active market and happy and loyal customers, faculty, administrators, etc would be looking for work, selling pencils on the stream, or worse, scouring dumpsters for food. Stated in a less dramatic way, an M.Ed. is worth nothing without students to teach. If there’s more school capacity than students, or students can’t find financing, then there’s a problem. You’ll need some Marketing Canaries ASAP…

Early Warning Indicators (EWI’s) Are Crucial
You do not want to slide into the marketing version of a settling pond complete with constricted revenues and bloated coasts. Failure to heed EWI’s can put your programs at risk. Here are some examples:

  • Cost per lead (semi-important, beat to death)
  • Cost per sale (more important)
  • Cost per sale with sales labor servicing costs factored in (most important).
  • Percentage of leads derived from student/alumni referral. (important)
  • Percentage of leads derived from referral points such as HR Directors and Vocational Counselors. (more important)
  • Appointments per day per rep. (very important)
  • Overall sales appointments per day (most important)
  • Percentage of Revenue derived from Re-marketing
  • Perceived ranking of program by employers
  • Percentage of students who finish school/retention (most important)

Retention Early warning Indicators
Schools tend to react to their retention stats scrambling to repatriate ‘drops’ and organize pro-rata refunds for those not returning. The retention stat is popular in terms of managing a school, but reactive in nature. How do we move out of reactive mode and into proactive mode? By turning the retention stat into an Early Warning Indicator to save your school, that’s how. Let’s compare:

Retention Stat

  • Arrange pro-rata refunds
  • Try and resell the Drop, trying to bring her back into the fold
  • Rework cash flow
  • Fret about accreditation ratios.

Retention Early Warning Indicator

  • The above four items
  • Are our admissions people over selling the school, just to nail admissions numbers?
  • Did we help organize for the new student a Student Services plan, including plan Bs’ in place for transportation, housing, dollars and if need be daycare and a self esteem plan
  • Are our marketing people over-promising regarding the program.
  • Am I not re-marketing properly to my student body?
  • Do we have toxic faculty, crummy text books, physical plant and teaching aids?
  • Is the program in question losing relevance or becoming redundant due to external job market changes.

So, as you can see, a basic retention stat can be re-framed as an Early Warning Indicator and offer the school a proverbial Canary in a Coal Mine. A clue to quickly explore other areas, in turn leading to more strategic issues to be addressed. A Retention Early Warning Indicator can save a school program from ruin.

Ask yourself how you can take basic stats you run for your business and re-frame them for Early Warning Indicators. Your students and staff will thank you for many years to come.

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