"Students are not customers nor are they not customers." – Stephen Joel Trachtenberg, president emeritus, George Washington University.

“The best students don't view themselves as customers, and they shouldn't be treated as such." – Edward Snyder, Dean, Chicago Booth School of Business.

These quotes reflect the ambivalence that most business school professors and administrators feel about their relationships with students. Are business school students our customers? And should we treat them as such? Or is the relationship more nuanced with non-customer-like parameters?

I think this question is especially important in today’s economic environment, in which many students shell out six-figure amounts and take on enormous student loans to come to business school and earn an MBA. So it is natural they should come in with a “customer” mindset – a keen eye on getting what they are paying for so dearly.

Before I tackle this question, there is one caveat. In this post, I am only discussing graduate business school, or MBA students. The discussion would be quite different for undergraduates (even based on their major) or for other professional students like those in law or medical schools. Paraphrasing Ayn Rand, economics changes everything.

How Do Marketers Define a Customer?

A customer is someone who derives value from the products or services that are being offered, and is willing to pay the asking price for them. Because of this economic relationship, the customer’s wants are the company’s focus of attention. Every good marketer will try to fully understand what customers want and then design products and services to satisfy them. As management expert Peter Drucker famously said:

“There will always be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed is to make the product or service available.”

On the flip side, if customers remain unsatisfied, bad things happen. They stop buying. They complain. They tweet, Facebook, Youtube, and Instagram their dissatisfaction, which goes viral. Basically, they can create a lot of trouble for the company, and may even run it into the ground.

Because of this satisfaction-driven dynamic, if the customer wants more cheese, Pizza Hut finds ways to put more cheese in its pizzas. If JC Penney shoppers want more coupons and sales, the department store removes “fair and square pricing” and offers more coupons and sales. If online shoppers want more lenient return policies, that’s what sellers like Zappos and Amazon provide. Whatever the customer wants, the customer gets. The customer is always right!

Why Business School Students Are Customers (in Some Ways)

In some important ways, business school students are the business school’s customers and they must be treated as customers. They have very specific expectations about what they should get in exchange for the fees they have paid and the opportunity costs they have incurred. Here are three core expectations:

  • Outstanding core services. For students, the core benefits of an MBA degree are a firm grounding in business knowledge, learning a set of cutting-edge tools for analysis and communication, gaining experience with making big and small business decisions, and acquiring a strong professional network. High quality faculty mentoring and coursework that provide not only factual information and tool-kits, but also build skills such as critical thinking, acting decisively, communicating effectively, and collaborating with others are some examples of such core services. In this respect, students are entirely customers, and business schools must deliver the core services that are expected and what students have paid for with a high level of quality.
 JGSB, Rice University
Source: Rice MBA students, Source: JGSB, Rice University
  • A transformative experience. I have always believed that when a business school does its job properly, it does nothing less than transform a student. I can think of many of my ex-students where the individual on the first day of class and the individual who graduated two years later were entirely different people. And in a good way. The way they saw themselves, their confidence, their outlook, their optimism and what they wanted out of their life, and their social network, not to mention their skill set, had all changed dramatically. They were on one career and personal-life trajectory before, and on a different, superior one after completing the MBA. That’s what a business school is supposed to do. And again, this type of experience is consistent with customer-oriented marketing principles. A first trip to Disney World provides a similar, although less life-altering, experience to ch
  • Placement in the desired career after graduation. Just as the final desired outcome for a restaurant is a customer who leaves satiated with a belly full of delicious food, the final desired outcome for a business school is a student who graduates and goes to work at a job that is high-paying, challenging, and personally fulfilling. (The high-paying part is important because of the enormous student loans that many students have accrued and must pay back).

But Why Business School Students Are Not Really Customers

This is not the end of the story, however. In equally important ways, MBA students also diverge from the customer role completely. There are occasions when students are just plain wrong in the class-room, or in their interactions with classmates, faculty, or recruiters. Letting them think they are right would be treating them like customers, but would do them grave disservice. Here’s why.

A business school provides a formal education and awards credentials.

Business schools credential students in a special way by conferring the MBA degree on those who complete all its requirements. With the degree, the student is branded with the school’s reputation. Most importantly, these requirements are really challenging. They involve sustained work, some of which is rather difficult and oftentimes, unpleasant.

What is more, there is inherent competition with peers in the learning process. Grades are often awarded on a curve, and there are strict grade quotas of As, Bs, etc in many classes. Students are rated and ranked in their performance in everything from a business plan presentation to a final exam. There are winners and there are losers.

Frankly speaking, these processes rule out the “customer is always right” mindset. Quite often, students are wrong. And as a business school professor (or administrator), it is not only desirable but ethically mandated to point this out. In fact, I would argue that’s what makes the delivery of outstanding core services and a transformative experience possible.

There is a clear trade-off between learning experiences that are entertaining in the short-term and those that develop valuable skills with longer-term value.

Let’s take this point one step further. When I teach a marketing class, I could make the experience entirely fun with a focus on students’ entertainment. I could introduce some marketing jargon and buzz-words, and offer easy assignments that students can complete easily. We could do enjoyable exercises. And I could sprinkle A+ and A grades like confetti. Many students will mistakenly believe they have learnt marketing well and will evaluate my performance as a professor highly. Strictly seen as customers, they will go away thoroughly entertained, extremely satisfied, and recommend my class highly.

Or I could ramp up the degree of difficulty of the course (as I usually do), include challenging cases, projects, and tests, and really have students go through and understand the different pieces of marketing strategy and execution. This would certainly make the class experience a lot less entertaining (but more engrossing, hopefully, for most). And the real benefits of this hard work may not accrue to students until several years later when these students have been promoted a couple of times, or are running their own growing enterprise, and have to make difficult decisions that involve using the skills they learnt in business school. Such an approach may not lead to the greatest student satisfaction in the here-and-now. Clearly, this is where the “student-as-customer” framework falls apart.

Conclusion

As I see it, the bottom line is this. In business schools, there is a hierarchical student-teacher relationship that is dormant most of the time, but plays a key role at crucial junctures during the education process. While we certainly should act in customer-oriented ways and deliver superior customer value to our students, the very process of delivering such value requires that we not always treat them as customers.

Acknowledgment

Thanks to Rice MBA student David Doiron for asking the question.

About Me

I teach marketing and pricing to MBA students at Rice University. You can find more information about me on my website or follow me on LinkedIn, Facebook, or Twitter @ud.

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