A sale starts with a connection. Two people bond over shared interests and values. They introduce each other to their teams and show off their best sides. After bids and presentations, they negotiate terms and hammer out a contract. At the end, the solution is delivered and the bill is paid.
That’s how sales works … in theory at least.
Of course, purchasers rarely target one provider. They play the field, looking for the best fit and deal … just like MBA applicants. In many cases, they field multiple offers. Many times, their selection reflects the appeal of business school brands.
YIELD: A MEASURE OF WHO LANDS THE STUDENTS THEY WANT
This wins-and-losses measure is called Yield. Think of it as a sales closing ratio or a baseball batting average. You divide the number of commitments by the number of offers. In other words, how often did an MBA applicant choose a business school after receiving an acceptance letter from it? In baseball, a .350 average makes you an All-Star. Among business schools, that average represents a safety school, a backup option applicants choose when Plan A falls through.
Bottom line: Yield reflects the desirability of an educational brand and everything it entails: messaging, support, curriculum, outputs, and community.
Why does Yield matter in the MBA marketplace? Think people. No doubt, brand name comes at a premium. That means the top business programs can be more selective in which candidates receive offers. Demand exceeds supply, after all. Below the surface, the consumer – the applicant – wields the real power. A business school isn’t just a two-year commitment where students quit their jobs and pony up six figures. For many, it is a lifetime commitment, one that often shapes their outlooks, networks, opportunities, and long-term pay.
HARVARD AND STANFORD ARE NEAR EQUALS…EXCEPT IN SCALE
Business schools may be gatekeepers, but they’re not exactly fending off the barbarian hordes. Their applicants are high potentials in sensitive roles with Dean’s List pedigrees and CVs lined with achievements. They are the ones who were trusted to launch and lead, the proverbial tip of the spear who beat the odds and expanded the possibilities. Call MBA applicants the ones to watch, the committed creators and culture-setters whose mission matches their ambition. They seek to be around doers and innovators like themselves. Their opinion matters. And that opinion – whether or not accepted candidates ultimately end up on campus – lies at the heart of yield.
In fact, Yield acts like a stock market ticker, showing which programs are up-or-down. Those shifts hardly matter to the top MBA programs: Harvard Business School and the Stanford Graduate School of Business. These schools land the students they target, almost without fail. HBS’ yield was 90.2% during the 2018-2019 cycle, meaning it enrolls nine-of-every-ten students who receive an acceptance letter. Technically, this percentage represents a down year for HBS, whose yield reached 92% with the Class of 2019. Where did that 2% drop go? Chances are, Stanford GSB picked off a few. In the past two cycles, Stanford’s yield has climbed from 85.3% to 88.5%.
Could Stanford GSB eventually dethrone the champs? That really depends. Both experienced a drop in applications for the Class of 2020. Harvard collected 465 fewer applications, with the number being 376 less at Stanford. However, these numbers should be evaluated in context. Last year, HBS made 930 seats available, compared to 419 at Stanford GSB. In other words, Stanford GSB is 45% of the size of HBS. At double the class size, Harvard Business School’s yield is, in some ways, a more impressive feat thanks to scale.
GO TO THE HEAD OF THE LINE…IF YOU’RE A TRUE BELIEVER
With MBA yield, there is Harvard and Stanford…and then you’ll find the rest. Among top-ranked schools, Columbia Business School brings a 73.9% yield to the table. That said, the high percentage comes with a bit of a caveat: Early Decision. Seemingly modeled after a Disney Parks FastPass, applicants can cut the line and receive a decision from admissions ahead of their peers. That’s provided, of course, that they sign a ‘statement of commitment’ to the school and spurn any offers from other schools upon admission (along with paying a nonrefundable $6,000 deposit within two weeks of acceptance).
For applicants, the benefits are obvious. They stake claims as true Columbia MBAs instead of shoppers who are pitting schools against each other for the best deal. They create a transparency that makes their candidacy stand out. Even more, it provides CBS with a head start on shaping the kind of class that reflects it values, notes Chris Cashman, the school’s executive director of public relations, in a 2018 interview with Poets&Quants.
“To us, [Early Decision] provides us advanced insight into the diversity of candidates – backgrounds; geographies; career history and future goals – that we believe we will ultimately enroll in our upcoming class. ED also allows candidates to really express their clear desire to make Columbia Business School their school of choice and allows us to better understand their reasons for choosing Columbia Business School.”