What Is a Good GMAT Score in a Test-Optional World?

David White

David White - Menlo Coaching

David White is a mba.com Featured Contributor.

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You’d be forgiven for thinking that a good GMAT score no longer matters for MBA admissions.

During the 2020-2021 MBA application cycle, top MBA programs including MIT Sloan, UVA Darden, Michigan Ross, and Cornell Johnson offered ways to apply without a GMAT score. In the 2021-2022 cycle, Ross and Darden have extended this policy, and other programs may follow suit.

Many applicants hoped this meant that GMAT scores no longer mattered!

After all, MBA applicants are busy people, and if they could achieve the same results without studying for the GMAT, they would be crazy not to take advantage of the test-optional policies.

But a new report released by Menlo Coaching’s research team proves that high GMAT scores still drive superior acceptance rates and scholarship offers at top MBA programs. You can download the report here.

Why do business schools care about your GMAT score?

Here are two key reasons why your GMAT score is an important part of your application:

GMAT success predicts business school success

The first reason that business schools care about your GMAT score is that it is a genuine predictor of success in an MBA program.

Tough GMAT problems are designed to assess the exact skills required in business school: critical thinking, flexibility in problem solving, and hypervigilance for any “tricks” in the question. This goes far beyond pure math or grammar exercises, and is the reason why the GMAT really measures skills relevant for business.

The GMAT is an MBA ranking factor

But the elephant in the room is that the GMAT score is a factor in the U.S. News MBA rankings. To be precise, test scores (including the average GMAT score) make up 16.25 percent of the U.S. News MBA ranking calculation.

As described here, the GMAT score includes sub-scores for

  • Quantitative Reasoning
  • Verbal Reasoning
  • Analytical Writing
  • Integrated Reasoning

The U.S. News calculation uses your total score on an 800-point scale, which is based on your performance in the Quantitative and Verbal sections. It does not include your scores on the analytical writing assessment or the integrated reasoning section.

Every MBA program wants to maintain or increase its ranking, because a higher ranking means more (and better) applications. Go on, admit it. You have looked at MBA rankings, too.

The mba.com User's Guide to MBA Rankings

What do MBA rankings really tell you? Our free guide gives you the details of all the major MBA ranking methodologies and other useful info, all in one place.

 

If you have a good GMAT score, admitting you will help the MBA program to improve its ranking. What counts as a good score depends on the MBA program’s overall average GMAT score, and whether you’re in a more or less competitive group of applicants.

So what is a good GMAT score for me?

To define a good GMAT score, start with your target MBA program’s average GMAT score, then add or subtract a few points based on your background.

For example, for an American man in finance applying to the Wharton MBA program, where the average is 730 in a typical year, a 750 GMAT score would be good, and 760+ would be excellent. (The large number of American men in finance applying to Wharton means that this applicant is in a competitive group and should target a GMAT score that’s slightly higher than the overall average in order to have a “good” GMAT score.)

Do GMAT percentiles matter?

For the purposes of the U.S. News MBA ranking, not really. Many GMAT test takers notice that their percentile on the quantitative section is low, and their percentile on the verbal section is high.

This happens because many test takers are engineers with strong quantitative backgrounds, but because many of those engineers have professional backgrounds that are not suitable for business school—for example, maybe they’ve worked in purely technical roles and rarely interact with colleagues and customers.

You don’t have to outscore these test takers on the quantitative section to win admission to an MBA program. Once you’ve reached an acceptable score on the quantitative section, one that proves you can handle finance and economics coursework, you can then focus on improving your total GMAT score.

So why did business schools introduce GMAT-optional policies?

First, they had genuine empathy for test takers who faced COVID-related test center closures and other practical obstacles.

But after that, a likely contributor to the decisions is (again) the U.S. News MBA ranking.

If an MBA program has a lower acceptance rate, this provides a small benefit in the U.S. News ranking, and generally makes the program look more selective. And as you might expect, offering a GMAT-optional policy drives a significant increase in MBA applications, which reduces the acceptance rate.

The desire to increase the number of applicants is a major factor in understanding why MBA programs offer test-optional policies despite the continuing importance they place on GMAT scores.

The data is in, and your GMAT score still matters

Menlo Coaching’s new GMAT data report, GMAT Score vs. Admissions Outcomes: Round 1 2020-2021, confirms that high GMAT scores drive superior acceptance rates and large scholarship offers.

Here are some of the report’s key findings:

Research finding #1: 730+ GMAT scores increase acceptance rates by as much as 197 percent

The report analyzed 247 applications from the 2020-2021 cycle, and care was taken to isolate the impact of just the GMAT score and correct for any confounding factors.

Because all of the applications were made by clients of Menlo Coaching, every application was prepared with the benefit of expert advice and the quality was uniformly high, meaning that any advantage or disadvantage between members of this group would be due to the GMAT score rather than the quality of the written applications.

(In a sample across a mixed population of applicants, it might have been true that the applicants who were more likely to invest the time to achieve a high GMAT score were also the applicants more likely to hire an MBA admissions consultant and work hard on the quality of their written materials, which could make it difficult to tell how much of the advantage was due to the GMAT and how much was due to the quality of the written applications.)

The data were then analyzed according to GMAT scores below 730 vs. GMAT scores above 730. Depending on the gender of the applicant and the particular MBA programs they targeted, the advantage for applicants with 730+ GMAT scores was as much as 197 percent.

Research finding #2: 730+ GMAT scores drive larger scholarships

Given the ranking-driven reasons why business schools want to increase their average GMAT scores, it is no surprise that MBA programs sometimes offer scholarships to strong applicants who also have high GMAT scores, since enrolling those students can help the MBA program to have a good showing in the U.S. News MBA ranking.

Depending on the applicant’s gender and their target MBA programs, the advantage of having a 730+ GMAT score in terms of scholarship awards was typically 30-40 percent.

What does this mean for your MBA applications?

Although some MBA programs are willing to accept applications without GMAT scores, this does not mean that it is optimal to apply without a GMAT score. As the data make clear, achieving a good GMAT score provides a significant advantage in the MBA application process.

This is not a surprise, given that the GMAT is designed to predict a student’s performance in business school, and the critical thinking skills tested by the GMAT are exactly the types of skills that are useful in a business career.

It is also true that the traits needed to achieve a high GMAT score, like willingness to work hard and create a structured plan to achieve a goal, are very desirable traits for MBA students.

In order to maximize your admissions and scholarship outcomes at top MBA programs, you should make every effort to achieve an excellent GMAT score. Read my related article if you want a full list of signals that you should (or shouldn’t) retake your GMAT.

David White

David White - Menlo Coaching

David White is a mba.com Featured Contributor.  

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