Options to improve student retention and revenue

Case Study | Options to improve student retention and revenue

by Rob Keogh | 1 November 2019

It is obvious to state that providing a quality training product and environment, is the focus of all good training organisations. However, does quality training, on its own guarantee quality results?
To deliver a quality training product is a massive challenge. Course material must meet and deliver the requirements of the training package. Of course, you also need good trainers and ensure they have effective tools for assessment.

Poor student retention or completion rates might not indicate poor training quality, but rather a lack of alignment in the business structure. Put simply, who you talk to and how you talk to them can have a greater impact on the outcome, than what you talk to them about (training product).

The real challenge many RTO’s must consider, is whether their sales process is aligned with their recruitment policy. The issue is that you ultimately must train the students you enrol. So, what happens when your sales team enrol people who are unlikely to succeed or complete the course?

This is not so much about knocking back potential real sales, as it is about setting a tone and standard for the commitment required to gain valuable learning outcomes that have integrity. If you advise or manage expectations differently during enrolment, might those same people engage differently or take a different approach to the learning process? Sales versus recruitment.

Training organisations put a lot of energy into training and assessment compliance, but when ASQA assess the competence of an RTO, they focus on five phases of the student experience. Training and assessment is just one of the five phases. Marketing & Recruitment, Enrolment and Support & Progression are the first three. The primary theme for the Standards for Registered Training Organisations is for the RTO to support informed decisions, engagement and participation.

A case study to address poor student progression
The economic model for training is fundamentally based on supporting student engagement and participation. Depending on the funding structure, most revenue depends on retention and progression performance. After the initial commencement payment, around eighty percent of income is subject to student progression which is a factor of student participation.

When you measure RTO performance, KPI’s include student retention, student progression and revenue per student. Together, these are meant to reflect training quality, but they are all directly impacted by the level of student engagement.

Re-write the Training & Assessment Strategy Plan
When recently addressing this issue for an RTO, we saw quality as a student journey, or student experience proposition. The solution we applied was to create an end-to-end strategy to support student engagement and participation. We embedded this in the organisation by re-writing the TASPs following the headings of ASQA’s five phases of the student experience. Policies on marketing, recruitment and enrolment directly impact student expectations, the level of commitment and ultimately quality.

The cost of marginal students
Next, we made a business case that identified the cost of recruiting “marginal” students. Based on the particular funding model, the advertising, marketing, sales and administrative cost to gain a lead, then nurture, enrol and induct a student was not fully recovered until the student passed the 40% progression milestone. The longer they took, the more of the trainer’s time was wasted in just chasing learning activities. Detailing these costs, helped to counter the natural inclination for sales to simply pursue maximum numbers.

Streamlined Enrolment
There is more to enrolment than simply capturing data – though the amount of data can represent a major speed bump in the recruitment process. We found the best solution was to create a dialogue, providing information and managing expectations. Automation plays a key role in response efficiency and execution accuracy. Terminology is important. Creating a pre-enrolment “application” process enhanced the value perception. It also ensured the LMS was reserved for actual students which improved data integrity.

Weekly or monthly payment is now commonplace among RTO’s; however it was not in place in this organisation. Lack of a tight payment framework lowered the student quality and wasted a huge amount of resources, due to students being given access to training resources and commencing induction prior to having some skin in the game.

Automated payments are key to continuity and motivation. A good example is gym memberships. Any training requires discipline. Knowing a payment will come out automatically each month, provides motivation to get out of bed, or put in the effort in the evening after work. This applies whether you’re going to the gym or sitting down to study. Of course, automated payments also help reduce debtors and improve cashflow.

Recruitment policy matching the standards for Enrolment
Establishing pre-enrolment requirements as a function of the recruitment process serves to ensure a clear standard for sales communications. Having a process that provides proper consideration of the student candidates’ existing skills and competencies prior to acceptance, is a fundamental requirement for compliance.

In this case, we moved LLN assessment and employer verification into pre-enrolment. The actual pre-requisites and benchmarks for every course and RTO are very different. Having some process with clear measures to identify if a student is unlikely to succeed or will require special consideration or a different pathway, is an essential function of recruiting and pre-enrolment.

Student Support & Progression
In this example each student was typically handed over to a trainer upon enrolment. From that point, the trainer took on exclusive responsibility for student progression through training and assessment. The problem with this model was that nearly half a trainers’ time was being taken up in discussions with a significant number of students who were not completing their work. This was a poor application of a valuable resource.

The new strategy provided separation between delivering training and assessment and supporting engagement and participation. This considerably changed the dialogue between trainers and students. An online calendar was created that opened up the trainer’s schedule, providing times where students could book discussions on learning. This emphasised the value of both the trainers and the student’s time.

A new program was created that established a Student Services function to drive engagement. Student Services provide a first point of contact, as well as an advocate and support role. This provides a hub for communication that includes monthly newsletters together with student-specific messaging, triggered by data on progression performance or lack there-of.