Why KPIs Metrics are a Must For Modern Day Business
| June 8, 2022
The fitness industry has changed forever following the COVID-19 pandemic. The challenges of lockdown meant that businesses had to adapt and think of new ways to keep their business alive. One way that was quickly called upon was the digitization of the studios on online platforms such as zoom, where they were able to offer online classes to the client base. This online platform and offering has stayed following our return to the new normal. And combining this with the return of full indoor classes and gym’s has meant that studios are busier than ever while trying to juggle the demands of online and in-person.
What has this got to do with KPI’s ? With the demand placed on the studios these days, KPI’S are no longer a word left for those in the financial sector to worry about. It is now a vital tool for all businesses to adopt their own KPIs that will help point them in the right direction.
So what exactly is a KPI?
KPI stands for Key Performance Indicator and is used to measure the performance over time of a specific objection that had been set by the manager. KPI’s allow businesses to set goals and targets that will motivate staff to try to achieve these targets. An example could be setting a target of hitting 50 new members in the space of a month. This constant remainder will ensure everyone is driven to achieve their goal.
It will also help managers identify potential weaknesses in the process of how they go about recruiting new members and will lead to a better strategy being established.
With that quick overview of KPIs done, what exactly should a fitness studio owner be looking to track?
Here are a few suggestions:
Human Resource Metrics
Performance Metrics are perhaps the most crucial as they bring attention to how your business is performing and will help see what areas of performance need to be strengthened. Some of the key performance metrics to use are conversion rate, the average class attendance, website performance, Customer lifespan within the studio.
Each of these metrics focus at different aspects of the business, but nonetheless will play a vital role in ensuring your business remains operating at peak performance.
Conversion rate looks at your sales strategy and shows the number of potential members that could be converted.
Average class attendance allows you to calculate the lost revenue from missing spaces in the class. Also looks at the productivity of the classes and allows to adjust class size to ensure maximum revenue and cost saving.
Website Performance is geared towards keeping track over the number of users viewing the company website. A good website will increase the potential client base and boost revenue.
Customer Lifespan within the studio helps to calculate the amount of cash flow coming from a customer through their time as a member. It is a good way to judge customer satisfaction and to highlight any improvements needed.
Human Resource Metrics
Human resource plays an important role in the area of Client retention as it allows to track and measure employee satisfaction as well as topics such as turnover rate, training costs and retention of talent.
Turnover rate is something that a lot of studios are now beginning to focus on following the pandemic. In this, when we talk of turnover rate we are focusing on the percentage of employees that have left over a period of time. If the turnover rate is high, you might want to look at features like work environment, studio culture or compensation.
Training costs show your business just how much is being spent on training and the effectiveness of the training. Thus, allowing you to pick the right training and price for new employees.
Retention of talent ties in with the turnover rate. However, this time we focus on the number of employees that stayed. Understanding the loss vs stayed rate allows the studio to see what is working and what is not. It will make it easier when putting together recruitment, workforce planning and business strategies.
Also, having a good retention rate will also link with client retention. As the employee’s loyalty and satisfaction will show to the clients and they will be more likely to return.
Return on investment can be tricky to calculate as it is hard to pinpoint if it was the marketing that got the new clients through the studio door. Perhaps the best way to calculate the ROI is to subtract marketing expenses from sales growth and then divide that by marketing costs to get a return on investment.
Social media tracking will allow you to paint a picture of the productivity of your social media campaign. You can track engagement features like likes, comments, messages, tags, or mentions. Following the engagement will help shape the next marketing campaign for your studio.
Business Metrics speak for themselves, they allow you to track and measure the overall performance of your business. Answering the key questions of revenue, client growth, customer retention and online sales.
Revenue is the first thing every business will track. As the saying goes, cash flow is king! And by tracking this, it really will give a picture of how the business is performing. Monitoring your income vs your expenses is the most effective way to track.
Client growth is a crucial part of increasing your revenue. Tracking this will see how the business’ marketing and sales campaigns are performing. Asking new members how they find you will help gather more information on the effectiveness of your sales strategy. Regularly compare your client numbers for best results.
Online sales have become much bigger since the pandemic and there are many benefits to be had from tracking it. Calculating the amount of sales from outside your business’ physical location allows you to see the efficiency of your online platform and highlight how important your online revenues income really is.
Tracking all of the above KPIs metrics will ensure that the business is performing at the highest level and will allow you to see how your business is performing at any given time. Now that you know want you need to measure, let's get tracking!