Know Your Numbers - Gym Owner Monthly Article Nov 2020

An old saying goes “If you want to improve something, you have to measure it”. Yet very few fitness businesses really know their numbers. This is an industry-wide issue, not just related to independent gym owners. Systems and dashboards help some clubs, but you need to define your key performance indicators (KPIs) and use them to know your business better and drive it forwards. 

There is a wealth of data available to businesses today, which is why the ‘key’ in KPIs is important. These are 5-10 key metrics that allow you to understand the state of your business. Some will be a combination of other figures, and you may need to drill-down into the detail, but these key metrics give you a performance headline. 

These numbers are absolutely critical to running your club, showing what is working, and what, where, or who you need to pay more attention to. Without accurate numbers, you’re driving blind, basing decisions on guesswork and intuition.

Let us look at three linked areas you should consider, and then how KPIs can help you to get more insight and take action to grow your business. 

Members

Headline member numbers are a must. If you do not have an accurate handle of total live members at your club today, at least know the live member count at the start of the month. 

In addition to total members, new members and leavers allow you to calculate net growth and attrition each month. If you also measure conversions from leads to prospects and to new members, you can refine your sales process. Average length of membership, and 12-month retention are important measures, but won’t change significantly every month. 

Breakdown of membership types, or payment methods are a good example of a drill-down, which will also tie into financials, but it’s less likely to be a headline KPI.

Visits

One of the positives of the pandemic is that clubs now have much better visit data. Knowing your total monthly visits is a great KPI. In addition, the number of unique visitors each month or week allows you to calculate your active member percentage. 

It is not all about club visits going forwards though. Think about how you measure your members activity or engagement. If they are exercising outside the club, and logging it on your app, count them above those who are totally in-active. 

Financials

Total income is the headline here. It could be split into membership income versus other income, which you could expand to PT, secondary spend, rental, food and beverage, etc. 

Linking back to members will bring a focus onto bounced DDs, members on freeze, as well as average member yield and who has a higher secondary spend.

Scorecard

There are plenty more numbers to consider, such as outgoing financials, average length of membership, or net promoter score. The ‘key’ is to decide on the handful you will use to make your scorecard which will help get a handle on your business and define your actions and activity.

Using Numbers to Improve

Once you have your KPIs, you can either compare your business with others, or measure trends over time. 

Benchmarking is useful to compare your club with other similar businesses. If you also have the opportunity to learn what others are doing differently, you can get better results for yourself. Very few initiatives are new, but many clubs are willing to share insights and help each other, particularly given the current economic and social climate.

Trend analysis shows how your KPIs change over time, and how your actions help you to grow. For example, if your active member percentage is low, focus more on engaging absentees, or take a look at improving your new member journey interactions. If attrition is up, concentrate on leaver surveys to try to discover the reasons members are leaving. If PT sales are in decline, consider new remote PT offerings, or run a competition to win PT sessions, with runner’s up prizes for all entrants.

Don’t Drive Blind

You would not get far driving a car without a dashboard. It might be fun for a short while, but you would soon run out of fuel, get stopped for speeding, or ruin the engine due to overheating or lack of oil.

Know Your Business Better

Knowing your numbers cuts through any doubt about the state of your business. Key Performance Indicators create accountability for you and your team, and will also create some clarity, commitment, and competition amongst team members. 

Like your members, if you measure your numbers, you will get more results, and likely get them faster.

This article was originally published in Gym Owner Monthly Magazine November 2020. Read the full issue here.

This