Q: I attended Greg Marsello’s workshop in Chicago entitled Selecting Repeat Courses. Is it possible to get more information than what was provided in the handouts? I’m trying to set up a system that will help me to determine, and defend, decisions. Look forward to hearing from you.
A: 5-Step Repeat Program Decision Making Process 20-30% of the programs you offer each year should be new. That means that 70-80% of the programs are repeats. Your overall program Cancellation Rate should be 15%. A 30-50% Cancellation Rate for your new programs is normal, while your repeat programs’ Cancellation Rate should range from 0-12%. Much has been written about techniques for selecting new programs. The proper selection of new programs is important, but even more critical is the selection of repeat programs. When looking at your programs for the year (or for a quarter or session), 50% of what you offer should be “signature,” programs that consistently succeed. 20-30% of what you offer should be new, and thus 20-30% of your programs fall into the “up and coming” category. “Up and coming” programs are programs that are seasonal (occur only during the summer), cannot be offered in each brochure (outside speakers and/or programs that do not have a large enough niche to be offered multiple times), or new programs that have succeeded and now are being offered again. The following is a 5-Step process for deciding which repeat programs should be offered. Use the four-quadrant chart (see Figure 1) for plotting each of the 5 steps. Any repeat programs where all the 5 steps are plotted on the Star/Cash Cow side, should be run. Any repeat programs where all the 5 steps are plotted on the Problem Children/Dog side, should not be run or need to be totally redesigned and thus become new programs. Any repeat programs where the 5 steps are scattered on both sides, need to be corrected (fix the Problem Child/Dog problems) before they are offered. Step 1. Operating Margin When budgeting for the year, you should have decided what you want the Operating Margin (Income – Direct Costs) for your programs to be. Most lifelong learning programs strive for an Operating Margin of not less than 40%. Using 40%, a program with an Operating Margin over 40% would be a Star. A program with an Operating Margin of 35-40% would be a Cash Cow. A program with an Operating Margin of 30-35% would be a Problem Child. And a program with an Operating Margin of less than 30% would be a Dog. Step 2. Registrations Knowing your Average Participants per Program (Participants/Active Programs) is critical. For this example, we will use 15 as the average. A program with over 15 participants would be a Star. A program with 11-15 participants would be a Cash Cow. A program with 8-10 participants would be a Problem Child. And a program with less than 8 participants would be a Dog. Step 3. Income You want to know the Average Income per Program (Income/Active Programs). For this example, we will use $500 as the average. A program with over $500 in income would be a Star. A program with $400-$500 in income would be a Cash Cow. A program with $300-$399 in income would be a Problem Child. And a program with less than $300 in income would be a Dog. Step 4. Quality When participants evaluate your programs, the first question asked should be “How would you rate the overall quality of this program?” Participants should be given a Likert Scale of options: 5 would be excellent; 4 would be good; 3 would be average; 2 would be below average; and 1 would be poor. A program with an average of higher than 4 would be a Star. A program with an average of 3.5-4 would be a Cash Cow. A program with an average of 3-3.49 would be a Problem Child. And a program with an average of less than 3 would be a Dog. Step 5. Energy Many times programs that might seem successful take an incredible amount of staff time and energy to manage. Take the hours required in staff time managing (logistics, instructor communication and support, materials) the running of the program (this is different than looking at the cost to develop the program which is a completely different issue) and multiply the hours by the average staff hourly rate. If it takes 5 hours and the hourly rate is $20, then the cost is $100. Then look at the cost as a percentage of the Operating Margin. If the Operating Margin was $500, then the $100 is 20% of the Operating Margin. A program that costs less than 5% of the Operating Margin to manage is a Star. A program that costs 5-10% of the Operating Margin to manage is a Cash Cow. A program that costs 11-15% of the Operating Margin to manage is a Problem Child. And a program that costs over 15% of the Operating Margin to manage is a Dog. When doing the above analysis, it is always best to compare “apples to apples.” That is why you probably want to do your analysis by division. It would be counterproductive to compare a computer course to a children’s program. Repeat programs, like repeat customers, are the foundation of your lifelong learning program. Spend time being selective and correcting Problem Children and Dog challenges.