Customer retention : a case study of stakeholder analysis in higher education

Universities are hybrid institutions, part government, part private sector, and partly supported by voluntary donations. Education produces both public and private benefits – educating a person produces benefits to both the individual and to society as a whole. It serves multiple customers in a single transaction. Once students are enrolled, universities typically need to retain them for at least three years to build a product – a degree. Student attrition can cause a significant loss of students, sometimes as high as 50%. Despite significant efforts, attrition rates have, in general, proven hard to change. This intractability suggests that there may be benefits or advantages to attrition that aren’t fully recognised or acknowledged. This paper applies a qualitative, phenomenographic method. Stakeholder Analysis supported by qualitative and quantitative information in the literature and statistics is used to critically tease out different perspectives and develop common themes. The analysis is situated in Australian undergraduate coursework degrees. While the attrition of students prior to completion is clearly deleterious to institutional income, its other effects on the institution and key stakeholders are more ambiguous. Both students and staff are stakeholder groups who have a significant influence on the decision to exit. For both, some decisions to exit may represent the optimum outcome. This may mean that there is an optimum level of attrition – neither too high nor too low. Furthermore there may be value in viewing student attrition as a by-product rather than waste, and improving value for those who chose to depart early.