W. Edwards Deming said, “You can’t manage what you can’t measure.”
Small businesses need to be laser-focused on metrics because often there are small differences between being a self-sustaining entity and running into problems. For example, if you take your eye off of new member campaigns and promotions and then a portion of your membership base suddenly goes elsewhere, you could be in a world of trouble.
There are a number of metrics you should be tracking monthly or even weekly in some cases.
1). Retention: How many of those who joined your gym or school are still members?
Hopefully you’ve done your homework and you know that it costs five times as much to get a new member than to keep your existing one. That can add up to thousands of dollars if you have members leaving at high rates. The extra challenge that fitness businesses have is that many members may join as part of a New Year’s resolution or to get in shape for a specific event such as an upcoming wedding and then leave once the “event” or their resolve has ended. This means it is even more important to keep those folks who are committed to fitness for the long-term and keep them working out at your facility.
Another reason it is imperative to keep your existing members or students happy is that these folks are also a potential additional source of revenue. Existing customers (or members) are 60% more likely to buy adjacent services such as personal training or retail products as compared to brand-new members.
If you’re still not convinced that ensuring each and every member sticks around, think of the “voice” an unhappy member now has with the growth of social media. If I left a gym ten years ago, I’d maybe tell a few friends why I left and the reasons for my unhappiness. Now, I can tell hundreds or even thousands of people via Facebook, Yelp or Twitter.
Bottom line: Retention matters a lot and keeping an eye on retention trends is critical to your business.
2). New prospects: The number of people who have called, emailed or filled out a website form to get more information about your gym or school
Since most gyms or martial arts school do have some attrition, you also need to constantly bring in new prospects. We’ve written a number of blogs, e-books and guides on ways that you can do this but they key point to remember is that you constantly need to find ways to bring in new students and members. Obviously not everyone who puts up their hand for information about your fitness business will end up joining, but having a healthy prospect pipeline is important. Those who indicate an interest today may end up becoming members or students in a month or even a year.
3) New prospect conversion: The number of people who indicate an interest in your gym or school who actually become members or students
If you know how many prospects you’re bringing in, you have at least an initial indication of how well your marketing dollars are working. However, if you bring in 100 prospects and none of them become gym members, can you really call any particular program a success? That’s why it so important to measure and pay attention to your prospect conversion rate. Watching trends here let you see if something like an introductory session or sign-up process needs to be tweaked.
4). Prospect status: What is happening with those folks who indicated an interest in your facility
Along with understanding how many new prospects you are bringing in, it is also a good idea to measure the activities related to each prospect. How many prospects have been called? Emailed? How many prospects scheduled an introductory visit? Paying attention to prospect status ensures that you or your staff is doing all the right things to get that person in the door.
Your software should be able to provide easy-to-access reports so that you can manage and act on any troubling trends. If you’re still using excel to pull this information, I’d invite you to check out a Zen Planner demo. One of our software specialists can walk you through the types of reports I mentioned and other ways you can grow your fitness business.