As you drive down the road, you keep an eye on your car’s dashboard. When you notice your gas is getting low, you think ahead to where you’ll be able to stop and fill up again. If your tire pressure starts to drop, you make a plan to get more air. And when your temperature gauge indicates your engine is overheating, you promptly troubleshoot the cause.
To run your business efficiently, you should keep the same watch on your metrics. Your metrics will tell you everything you need to know to run your business effectively and intelligently. From decisions on advertising and staffing, to buying more equipment or expanding, your metrics will help guide your decision-making process.
To help you verify you’re tracking the right things, or to get you started using your metrics, we created this list of the seven most important metrics to monitor for a healthy school.
1). Total Students
Total students is an easy metric to track, and keeping an eye on it lets you see the steady increase in the number of students at your school.
2). New Students
Your new student total gives you immediate feedback on your marketing and sales efforts and should be looked at for a fixed period (weekly, monthly or quarterly). Remember to take seasonality into account when tracking this metric.
3). Student Churn or Attrition
Student churn: # of students you lost in month / # of students in the same period
Knowing the rate at which you lose students is critical, and it’s best to look at this metric from a month-to-month standpoint. If your student attrition starts to increase, look for possible causes.
4). New Prospects, or Leads
If your marketing efforts are working, you will see a steady flow of new leads. If you’re not happy with the number of incoming leads, try some new tactics.
5). Lead Conversion Rate
Lead conversion rate: (# new students / # new leads) X 100
This is an important metric that will give you insight into your marketing and sales effectiveness. Monitor this metric for a set period, preferably by month. If you find your conversion rate isn’t where you’d like it to be, trouble shoot to find the cause.
6). Average Revenue Per Student
Revenue per student = total monthly revenue collected / recurring paying students over the same time period
This metric pinpoints how much revenue each student contributes toward your periodic (weekly, monthly or yearly) bottom line. It’s a good metric to use when estimating how many students you need to reach your revenue goals.
7). Average Lifetime Value Per Student
Much like average revenue per student, lifetime value tells you the financial value of a student. But this metric shows the value as a single sum that takes into consideration the average length of a student agreement, or their tenure with your school.
Average revenue per student is a good metric for making long-range business decisions, like whether or not to undertake an expansion. It can also be used to justify expenditures, such as a special marketing campaign or a new employee.
Metric Tracking and Reporting
Now that you have a list of the most important metrics for your school, you’ll want to put a plan into action for tracking and analyzing them. Student management software makes the metric management process accurate and easy. Good software provides a customizable dashboard so you can track your metrics, just as you do the gauges in your car. Software also allows you to customize reports so you can see exactly what you want, without manually tracking and crunching numbers.
If you’re interested in learning more about your metrics and how they tie into the financial management of your school, check out our guide, 6 Building Blocks to Financial Health for Your Martial Arts School.