Ask an owner what a new student is worth and you usually get the monthly fee. A hundred and fifty dollars, say. Then someone quotes a price for getting students through the door, the owner holds it up against that hundred and fifty, and the whole thing looks unaffordable inside two seconds.
It's the wrong comparison. Not because the fee is wrong, but because a student isn't a month. They're however many months they stay, plus everything else they buy while they're there, plus whoever they bring with them.
You can't fix that with a rule of thumb. You have to go and get four numbers out of your own records.
The four numbers
1. What you actually collect per month, per student.
Not the price on the wall. What lands in the account, averaged across everybody: family discounts, the two students on a hardship rate, the ones who prepaid a year at a reduced rate. Take last month's tuition income, divide by the number of active students. That's the real figure and it's usually lower than the one owners quote.
2. Everything that isn't tuition.
Gradings and belt fees. Uniforms and sparring gear. Seminars, camps, competition entries, the branded hoodie. Birthday parties, if you run them. Same method: take a full year of that income, divide by the average number of active students that year, divide by twelve. Now you have a per-student, per-month figure to add to number one.
3. How many months a student stays.
This is the number almost nobody has, and it's the one that decides the answer.
Here's how to get it without buying software. Pick a month roughly three years back. Pull the list of everyone who enrolled in that month. For each of them, count how many months they were billed before they stopped. The ones still with you today, count the months to now. Add it up, divide by the number of students.
That's your average length of stay. Nothing about it is a projection. It's a count of what already happened in your school. Do it again for a month a year later and see whether the number moved. If you changed something in your beginner programme, that's where it shows up.
4. Referrals.
Not a guess. When somebody enrols, ask how they heard about you and write the answer down. After a year you can say what proportion of enrolments came from an existing student or their family, and that fraction belongs in the value of the student who sent them.
If you've never recorded it, leave this one out entirely rather than inventing it. A value calculated on three real numbers is worth more than one propped up on a fourth you made up.
Doing the arithmetic
Say your figures come out like this. These are placeholders — the entire point is to substitute your own:
- Collected tuition: $150 a month
- Everything else: $22 a month
- Average stay: 14 months
That's $172 a month for 14 months. $2,408. One student, one time.
Now go back to the price that looked unaffordable against $150 and hold it up against $2,408 instead. Different conversation. It might still be a no. But it's a no you arrived at with arithmetic rather than a flinch.
Two warnings about that number.
It is an average, so it contains the student who quit after six weeks and the one who's been with you nine years and is now teaching your Tuesday class. Don't spend against it as though every new starter is a nine-year student.
And it is revenue, not profit. Your mat has a capacity, your instructors get paid, and if the twelfth student in a class means hiring an assistant, the twelfth student is worth less to you than the eleventh. That's a real cost and it belongs in your thinking.
The other thing that number is for
Length of stay isn't only a marketing input. Of the four numbers, it's the one you can move yourself, from inside the school, without spending anything.
Move the average from 14 months to 17 and every student you already have becomes worth about a fifth more, retroactively, without a single extra ad. There's no acquisition cost on a retained student. That's why the beginner programme, the first ninety days and the phone call when someone misses two weeks are worth more attention than a new campaign. It's also why the honest answer to "should I spend more on marketing" is sometimes no. Fix the leak first.
The gap between an enrolment and the money
Here's where a lifetime value calculation stops being reassuring.
The value arrives over 14 months. The advertising cost arrives this week.
One Madscope client put it plainly, a few weeks into running trials, while the bookings were coming in faster than he'd planned for:
"I appreciate the credit as seeing all the bookings plus the Meta ad spend adding up every day was getting a bit stressful, especially not having gotten any of the students actually paying anything in yet."
"None of this is a negative about your company, pricing, or service - the opposite in fact! From my past experiences with other marketing companies, I was hoping for at best a few new students a month, not a few new students a day!"
A school owner, in a message to Madscope. Source:
t07.png
Both halves of that matter. He was pleased with the volume and he was watching daily spend accumulate against students who hadn't paid yet. Those two things sit together comfortably and any agency that tells you otherwise is selling.
So do the second calculation as well as the first. Not just "what is a student worth" but "how many weeks am I out of pocket before the enrolments cover the spend, and can the account take it". If the answer is tight, the fix is a slower start or a shorter payment gap on enrolment, not abandoning the maths.
Cost per booking is not cost per student
One more place the arithmetic gets misused. If you're paying per booking, or per lead, that price is not the cost of a student. Two things happen in between: some bookings don't show, and some of the people who show don't enrol.
Another owner, writing to a school owner who'd asked him whether Madscope was worth it, described his own experience of that:
"Please keep in mind that not every booked appointment will show. They dont with any of our other marketing as well so that is normal. However, of the appointments that show we enroll several every month. Also keep in mind that everyone who shows may not enroll in your school for one reason or another (cant afford it, or the schedule may not work, etc). I think our best month with Madscope was 8 enrollments and on average I would say 4-5 monthly."
A school owner, in an email to another owner. Source:
t42.png
Note that he hedges it himself, "I would say", and note the two reasons he gives for people not enrolling: money, and the timetable. Those are his numbers, for his school, over his period. Not a benchmark. Yours will differ.
The method is what transfers. Divide what you spent in a month by the number of students who actually enrolled from it. That's your cost per student. Compare that to your lifetime number, not to your monthly fee, and you finally know whether the spending works.
What to do this week
- Take last month's tuition income, divide by active students. Write it down.
- Take a year of non-tuition income, divide by average active students, divide by 12. Add it to the first figure.
- Pull one enrolment month from three years ago and count the months each of those students was billed. Average it.
- Multiply. That's your student value. Put it somewhere you'll see it next time you're quoted a price.
- Start writing down how every new enrolment heard about you, so that in a year you can do this properly.
That's an hour with your billing records, once. It changes every marketing decision you make afterwards.
Where we sit in this
Straight about the incentive: Madscope is paid when a student physically walks into your school, not when a lead form gets filled in and not when a booking lands on your calendar. So the number this article is about is the number we're arguing against too, and we'd rather you had it in front of you before we ever speak.
The step before this one, getting the booked trial to actually turn up, is the other half of the same sum. We wrote that up separately: why booked trial students don't show up.
When you've got your figure, book a 15-minute call and we'll tell you roughly how many students that's likely to mean in your market. And there's more of what other owners have said about how it's gone for them.
Client quotes on this page are reproduced as written, from messages sent to Madscope by the owners concerned. Source images: t07.png and t42.png in our client message archive. Nothing has been rounded, tidied, or projected forward, and no owner's own caveat has been removed. The dollar figures in the worked example are placeholders, not industry averages. We have not measured an industry average and will not publish one we haven't measured.