How to Calculate and Improve Retention for Your Martial Arts School

Tracking the number of active students is probably the easiest thanks to, martial arts software, and most universally recorded metric for school owners. That being said, it is likely the most underutilized.  To most, the active student count portrays a certain level of business success. While it is extremely important to track, the belief that a larger student count automatically means success could not be further from the truth. When it comes to tracking your active students, the real value comes when you consistently track these numbers and apply basic calculations to gain insight into the rest of the business.

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To get the most meaningful student metrics, there are four basic numbers to be tracked. Every month, track the beginning number of active students, new student signups, students churned (dropped/cancelled) and the ending number of students. The ending number of active students in the current month will be the beginning number of students the following month.

Since it is common for students to purchase more than one membership package, the same key numbers should be tracked for each active package as well. Multiplying the number of active student membership packages with their price gives a reasonable estimate of the revenue to expect that month from those active memberships.

When used in combination with the total monthly revenue, these four basic numbers will be used to calculate the following, more insightful metrics for the business:

• Average Revenue Per Student = Total Revenue / Active Students
  • The average amount of revenue brought in by a single student each month.
• Churn Rate = Students Churned / {(Beginning Students + Ending Students)/2}
  • The rate at which you drop students in a given time frame (includes students that cancel or do not renew their membership). This is the opposite of your retention rate.
• Average Student Lifetime = 1 / Churn Rate
  • The average length of time (in months) that an individual student stays with the school from the day that they sign up.
• Average Student Lifetime Value = Average Student Lifetime x Average Revenue per Student
  • The average amount of revenue that a single student will bring into the business throughout the duration of their membership.

Looking at the numbers for your school as a whole will give great insight into the health of the business as a whole. To find and address areas that need improvement, the same KPI’s can be looked at for different segments of students.