The Closers: Business Schools That Get The Students They Want - Poets&Quants

A Harvard Business School classroom. Photo by Natalie Keyssar. Courtesy of HBS

It isn’t hard to draw attention to a brand. Just slash prices or offer a freebie. Of course, the bump in sales comes with a cost. Customers will expect the same treatment the next time they buy. Worse, prospects will associate that brand with being second-rate.

In sales, organizations focus on reducing churn and beating quota. In branding, the end involves harvesting a select group of customers – ones who are willing to make a long-term commitment…and even pay a premium. In the full-time MBA space, the market is comprised of high potentials. They possess the mettle to give up two years. And they understand choosing a business school is a marriage – a life-long partnership that reflects who they are as much as what they know.

YIELD REFLECTS A SCHOOL’S ABILITY TO SEAL THE DEAL

This market has options, not to mention money and courage. That makes them the perfect benchmark for the appeal of an MBA program’s brand. To many, business schools fully control who is associated with their brand. Among Poets&Quants’ Top 15 American MBA programs, just two accepted more than a quarter of applicants – with Cornell Johnson representing the high water mark at 29.9% each. Among the Top 40 programs, just 12 accepted more than a third of applicants.

Still, there is a place where applicants wield their power in the process: Yield. For schools, think of it as a closing ratio in sales. Yield is the percentage of students who ultimately enroll after receiving an acceptance letter. It is a measure of brand desirability, if not exclusivity. Basically, it reflects which programs make such a strong impression – through students, faculty, administration, and alumni – that they convince applicants to take a leap of faith. Whether it is quitting their job, moving across the country, or saddling themselves with six figure debt, these students are fully embracing their schools’ missions, communities, and possibilities. They are the schools who resonate most deeply with them…and they are the ones that they chose among the alternatives.

Harvard Business School. Photo by John A. Byrne

In short, yield measures salesmanship for schools and faith level in students.

HARVARD AND STANFORD – HIGHEST YIELDS FOR VERY DIFFERENT REASONS

Not surprisingly, Harvard Business School and the Stanford Graduate School of Business reported the highest yield rates for the Class of 2019. Some 90.9% of the applicants admitted by HBS actually enroll at the school. Stanford is just a shade lower at 89.1%. These are extraordinary yield rates. In comparison, Yale University’s yield for its undergraduate admits is currently 71.4%, while Harvard College is at 85%. Not surprisingly, Harvard Business School and Stanford GSB also generated the most applications. HBS drew 10.351 applications in the 2016-2017 cycle, up 663 applications over the past two years. The GSB also experienced increased interest over the same period, with an uptick of 274 applications. Behind this application surge lies a truth: Both programs are regarded as the best programs for a demanding curriculum, deep resources, diverse classmates, and distinctive career opportunities.

HBS, for one, is regaled for its case-driven structure that fosters a learning community that’s second-to-none. “At any moment, you can go from a classmate who founded a nonprofit to one who fought in Afghanistan to another who worked in the White House or did deals on Wall Street,” explains Jan Rivkin, HBS’ Senior Associate Dean for Research, in a 2018 interview with P&Q. “They might take the conversation in wholly unanticipated directions. That creates engagement. When students come to class, they don’t know what’s going to happen that day. That’s exciting. All they’re sure of is that they’re going to learn something important. That kind of lean forward versus lean back is really very different, along with the predictability versus the element of surprise.”

No less rigorous, Stanford GSB takes a more customized approach, one geared toward the experiential and transformation nature of learning – a great appeal to Millennials still grappling with issues of identity and authenticity. “GSB is the place where you can bring who you are to the experience,” says Yossi Feinberg, the school’s senior associate dean for academic affairs, adds in a 2018 P&Q interview. “It is also the place where you discover what you can be. When students are able to be authentic, bring their passion and be supported by their community – expressing that passion and achieving a goal based on their passion – that’s something that really cuts across classes and experiences.”

HOW PENN STATE AND WISCONSIN SCORE BETTER THAN THEIR PEERS

Harvard Business School and Stanford GSB aren’t the only programs deemed more destination than fallback. The third-highest yield – 77.8% – actually belongs to 34th-ranked Brigham Young University’s Marriott School of Business. While Marriott accepts nearly half of all applicants, it inevitably lands over three-quarters of them – a success rate that MBA Director Grant McQueen attributes to the program’s LDS values and the heavily involvement of current students in the recruiting. At the same time, Arizona State University’s W. P. Carey School of Business converted 71.7% of all accepted candidates in 2016-2017. However, this number is artificially boosted by the program providing free tuition to all candidates beginning in 2016.

Then, there is Penn State University’s Smeal College of Business. Smeal boasts a 62.8% yield – a percentage that’s 10 points or better than Northwestern Kellogg, Chicago Booth, Dartmouth Tuck, and Michigan Ross. Smeal’s secret? High standards and consistency. Although the program received 62 fewer applications during the 2016-2017 cycle, it managed to enroll two more students. Even more, it raised average GMAT by two points and lowered its acceptance rate by a point to 17.1% – two points better than Wharton, the pride-of-Pennsylvania. The Wisconsin School of Business performed a nearly identical feat. Despite collecting 174 few applications during the last cycle, it still manage to raise yield by 10 points to 61.6%. At the same time, it raised average GMAT by nine points, while maintaining a respectable 30.4% acceptance rate – just four points higher than the previous year.

Such consistency is also the hallmark of Columbia Business School, whose yield rate traditionally hovers above the 70% mark. With the Class of 2017, it slipped to 69.8%, still good for 5th best among Top 50 MBA programs. An Ivy League program based in New York City, Columbia Business isn’t exactly a hard sell for talented and ambitious MBAs. Chris Cashman, the school’s executive director of public relations, notes that the area offers “unlimited opportunities,” which include “internships, networking, or meeting CEO’s across any industry imaginable.” However, he adds, the program also benefits from a top-to-bottom consensus about who they are – and what the ‘right stuff’ is to be a Columbia MBA.

The 2017 graduation of Columbia Business School MBAs

COLUMBIA KNOWS WHO THEY WANT AND WHY

“We know exactly what we are looking for regarding who we want to join our community: Individuals will make a positive impact on our community and positive contributions to business and society once they leave our campus,” Cashman writes in a statement to P&Q. “We work very hard to help our applicants understand the value Columbia Business School offers and how their background will contribute to our wonderful mosaic.”

The full-time program also benefits from an early decision option available to fall candidates. In a nutshell, these prospects can certify in their applications that CBS is their first choice, agreeing to withdraw applications to other programs upon acceptance. In the process, such candidates enjoy priority review by admissions – often receiving decisions before other schools. While the timing may give CBS an advantage with yield, it also furnishes a more fundamental piece of the puzzle, adds Cashman.

“Regardless of when you apply, every student who joins our community shares certain defining traits, such as being driven by a strong work ethic, being ready to build and foster professional and personal relationships, and are determined to make a real impact on the world through their chosen field. To us, ED 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.”

CORNELL AND NOTRE DAME ON THE RISE

Overall, 21 of the Top 50 MBA programs maintained a yield rate over 50%, with the University of Pennsylvania’s Wharton School and MIT Sloan also keeping their numbers over 60%. They join programs like HBS, Stanford GSB, and Columbia Business School in that regard. Translation: these schools were often the winners in head-to-head competitions where applicants had to choose between two or more offers. In contrast, Rutgers University scored the lowest yield rate among P&Q Top 50 programs at 30.2%, followed by Washington University Olin (31.0%) and Rochester Simon (31.3%).

Alas, yield is one of those measures where it can be difficult to move the needle. The biggest one year improvement among Top 20 programs was posted by Cornell Johnson at 4.0% (followed by Stanford GSB and NYU Stern at 3.8%). In sum, Penn State Smeal achieved the biggest growth in yield at 11.4%. It was followed by SMU Cox (+10.4%) and Wisconsin (+9.9%), with Texas A&M Mays suffering the biggest dropoff at 19.4%.

Over time, yield can also tip potential MBAs off to emerging trends. Stanford GSB, for one, has seen an uptick in accepted students enrolling, with yield rising from 83.9% to 89.1% over two years. During that same period, yield rose by 6.3% and 5.9% at Cornell Johnson and Notre Dame Mendoza respectively. In contrast, Duke Fuqua has witnessed its rate fall by 10.8%, despite an “Early Action” option similar to Columbia. The stock at the University of Washington Foster is also down, as its yield rate has plunged 9.3% over the past two years (which coincides with a 30% decrease in class size).

HOW A STRONG APPLICATION CAN HURT YOU

That said, yield can be a flawed benchmark for measuring brand appeal. It certainly isn’t a popularity contest: That is reflected in the number of applications (and percentage of growth), It also isn’t a measure of global brand appeal. Look no further than the yield rates at programs like Northwestern Kellogg, Chicago Booth, Berkeley Haas, and Dartmouth Tuck, which are lower than programs like the Texas-Dallas Jindal, Georgia Terry, Ohio State Fisher, and Michigan State Broad. One reason: different programs target different populations with different rates of success. It also doesn’t reflect enticements like scholarships, which are more readily available at programs like HBS and Rice Jones. Even more, yield is a snapshot of perceived value at the admissions end, which naturally doesn’t factor in outcomes ranging from pay and placement to educational quality and overall satisfaction.

What’s more, yield is a measure that is carefully managed by admissions. Business schools don’t like to think of themselves as safety schools. As a result, students perceived to be “too good” for a program stand a greater chance of being rejected or waitlisted there. Think of these candidates as the proverbial best-looking man or woman in the bar, where potential suitors choose to sit it out figuring they’ll get shot down. The result, of course, is candidates who fall outside the profile must take extra pains to lay out why they’re applying at programs ‘below them’ to win over suspicious adcoms.

Bottom line: yield is a measure of brand alignment: which programs really get the people they want – the applicants whose values, aspirations, professional credentials, and academic prowess align with their own. Because of that, the number also mirrors cultural fit – and a class that is happy to be where they are on day one. Call that brand harmonization – and it  doesn’t always line up with a school’s ranking or academic inputs.

To see application and yield numbers for your favorite schools, go to the next two pages.

DON’T MISS: 2018-2019 MBA Deadlines

Where MBA Apps Are Way Up — And Down

EDITOR’S NOTE: Temple Fox’s data was removed due to it being unreliable. Iowa Tippie was also not included since it will be ending its full-time MBA program in 2019.

The Marriott School of Management

Penn State University’s Smeal College of Business

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