Management Basics: Do you know your numbers?
You have probably heard the saying in business, “You need to know your numbers.” No matter how much you say it, a lot of business owners struggle with keeping KPIs for their business.
KPIs, or key performance indicators, differ from business to business. KPIs are important numbers you need to know to ensure your business is healthy and growing. In the membership fitness business model this is key, because if you don’t have these numbers tracked and easily available to you, you can’t foresee any dips or shortcomings in the future.
There are many ways to track KPIs. You can use a pen and paper, or your membership software should have a reporting section you can use to track some of these numbers.
I find that tracking the KPIs is not a problem for most business owners — they just don’t know what to track. We find it important in a membership model to track these five numbers/activities to get a daily, weekly and monthly pulse on your business. The five categories are sets, shows, conversions, cancelations and reactivations. These need to be tracked, and operations and training need to support and drive these numbers daily.
Let me explain what each of the categories are and how they will move the bottom line for your fitness business.
Sets: This number is used to see how many appointments or free classes are set for the day. You can program this to fit your front-end offer. A front-end offer is what you are using to get someone to show up at your studio. This will need to be tracked weekly.
Shows: This will tell you how many prospects showed up for the day and you can see over time the show percentage. With the show percentage you are able to gauge the effectiveness of your efforts and see it climb with future activities. You can start to systematize ways to get a better show percentage and train your staff members.
Conversions: This is how many prospects showed and signed up for a membership. This is going to show your close rate. If this number is dropping, you know you can set up some sales training for the team or for the sales associate that is below the acceptable percentage.
Cancelations: This will show you the number of cancelations for the day, week and month. You can calculate your churn from this number. In addition, you will now know if you are going to be plus or minus for the month and can ramp up activities to offset the loss.
Reactivations: Most gym owners don’t know this number — but it is good to set up a system to try to reverse or overturn cancellations. You also can set up systems to reach out to past clients and set up a reactivation campaign or script to up these efforts.
With these five numbers you should be able to keep a pulse on your business and move the bottom line in the right direction. Don’t worry if you are not tracking these currently, just start today. Get a binder and print out some paper and start to systematize this. It will help you ensure your staff concentrate on activities that move the bottom line and get your gym or studio packed.
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