The Leaky Bucket: Student Retention

This blog was inspired by an article George Kirby wrote entitled 'Student Retention' which is posted on his website (http://www.budoshin.com/). Kirby is a well known American jujutsu master and author of a number of books on the subject. He has kindly been encouraging me in my own work with some sound advice. Kirby's article reminded me of the work I did in arresting the downward spiral of the Jan de Jong Self Defence School (JDJSDS) in the mid-90s.

I was employed by the JDJSDS full-time while I was enrolled full-time in the Master of Business Administration degree (MBA). While there, the principals of the business (Mr and Mrs De Jong) informed me of the dire financial circumstances of the school and that they intended to shut up shop after they returned from teaching in Europe that year. They had been putting in money to the business to keep it afloat for a number of years. The first step in rescuing the school was to gather as much data on the key performance indicators (KPI) that I could lay my hands on.

The KPI's were consistent in that each one of them showed an unwavering downward trend since the early 80s. In the late 70s, early 80s, the membership of the school swelled to over 1,000 members. This population growth was due to the popularity of the television Kung-fu series. Even though the JDJSDS did not teach kung-fu, people were lined up to join the school in queses that extended down the street and around the corner. The business had been living of this 'fat' ever since with each year the membership declining, until in the mid-90s where it was not sustainable.

From my MBA studies, I had been introduced to the concept of 'relationship marketing.' Relationship marketing is based on the premise that it is less expensive to keep the customers you already have than to acquire new ones. The focus of relationship marketing is customer retention and developing long-term relationships. An analogy of a leaky bucket is often used to explain relationship marketing. The bucket is the business and the water are the customers. If water is lost through holes in the bucket, more water continually needs to be poured into the bucket. It's better to attempt to plug the leaks so the water is retained otherwise you have to continually work to pour more water into the leaking bucket.

I equated relationship marketing in the martial art school context with developing a strong culture. And culture is about sitting around camp fires telling stories. Jan de Jong had been travelling annually to Europe since the early 1980s to teach seminars. He loved these tours as did we all when we accompanied him. De Jong would spend three or four months planning the tours, three months touring, and three months telling everyone about it upon his return. I determined the school's culture suffered from De Jong's reduced involvement in, and focus on, the school.

The JDJSDS was made up of the hombu (head school) in the CBD of Perth, Western Australia, and a large number of branches in the suburbs. De Jong never visited the branches. In fact, I found there were students at the branches who did not know Jan de Jong in Jan de Jong Self Defence School was the name of a person. They did not know who De Jong was! Consequently, I encouraged De Jong to visit the branches. These visits were not only directed at the students, but more importantly at the instructors. De Jong took an interest in what they were doing. It showed support. It also gave the instructors an opportunity to introduce De Jong to the students, and to tell stories.

I encouraged De Jong to engage with his instructors more in order to develop two way communication between himself and his instructors. I encouraged him to bring up things which came to mind after his visit to the branches in the weekly Friday night instructors class. The focus on De Jong and his instructors is an example of internal marketing. Internal marketing is about a business marketing to their employees in order to improve their marketing effectiveness. Motivated and engaged instructors then motivate and engage students.

Next, I obtained as much memorabilia as I could lay my hands on from De Jong and hung them on the wall of the members lounge at the hombu. This memorabilia are visual stories of De Jong, the school, and the tradition. Photos of De Jong executing techniques, his instructors, certificates from Minoru Mochizuki, etc. I arranged for an annual get-together at Christmas of all the branches where the instructors put on demonstrations. The students never really got to see the instructors 'do their stuff' and here was a chance for them to see just that and be motivated. It was also an opportunity for all the school to see they belonged to something a lot bigger than the branch or class they attend. This was the only time everyone got to see how large the school actually was. It was also a time where students and instructors could interact on an informal basis, telling stories.

I wrote a book entitled Jan de Jong: the man, his school and his ju jitsu system. It is a coffee-table style book with information on De Jong, his school, the international reputation of the school, tributes to De Jong, the grading system, etc. It gave an overview of the 'tradition' and showed that the student was part of something a lot bigger than, for instance, participating in a sports class at the local community hall.

The De Jong's had the first place in the Yellow Pages for years/decades. It was a large advertisement costing at that time A$10,000+ per annum. I conducted a survey and found only one person said they joined the school based on the advertisement. ONE student! I suggested that if they wanted to spend ten grand on marketing they should do so and market internally not externally. Spend it on strengthening relationships with existing students. Unfortunately, this proposal was too big a leap of faith for the De Jongs.

The idea with relationship marketing is to let the students become the business' sales force. Not in a way which one kung-fu school did which I attended for a very short time. A requirement of membership to that school was to take posters home when you joined and post them around the area the student lived, in shopping centres, laundromats, etc. Another requirement was to wear their distinctive uniform going to and from training so it could be seen on the streets and public transport. They also played some Chinese music in the background when training which I finally understood that the music was background to the continuous repetition of the name of the school.

The KPI I focused on was average length of stay of a student. If I could increase the average length of stay of the students, the relationship marketing would be working and the profits would increase, or in this case the losses reduce.

In the first year I had (often surreptitiously) implemented this marketing approach, the downward trend continued. I decided to stay on after my MBA was completed in order to continue trying to save the school. The second year, for the first time in nearly two decades, the trend plateaued. The third year, for the first time in nearly two decades, the trend started to move upward. Building a strong culture worked. Making the students and instructors feel a part of something worked. Relationship marketing and internal marketing worked. The school continues to operate today.

A postscript to this story is the approach Jamie Francis has adopted with his school in the southwest of Western Australia. When De Jong passed away a number of senior instructors opened their own school. Francis has four branches and he teaches at each one. At the end of each term, he puts on a training session in one location which is free to all members of all his branches. Bringing all the branches together each term. He then puts on a barbecue after the training session where people intermingle and have the opportunity of telling stories. I've had the honour and pleasure of being invited to teach at these end-0f-term training sessions and it's heart warming to see the tradition of building a strong culture continues.

A further postscript is a consistent trend in enrolments which I observed. Consistently for the two decades of data I obtained, enrolments peaked in January/February each year than dropped off until another peak in July/August before dropping off for the rest of the year. I can understand the January/February peak, new year resolutions and all that, but I am still mystified as to the mid-year peak. My business mind looks at the end of the financial year, however I seriously doubt the average person at the end of the financial year thinks now is a good time to learn martial arts.