Marketing
Cost to Acquire a Client
The cost of your marketing investment divided by how many new clients you acquired this month. Ex: If you spent $500 in marketing expenses, and you gained 5 new clients this month, then your cost per new client was $100.
This number is useful to track your performance over time. You want to make sure that your marketing investments are producing results, and looking at this number over various months can give you a good idea of how your efforts are fairing, particularly if you make changes to the marketing budget.
Next Steps
Ideas to generate more traffic
Retention
Expected Client Lifetime Value
This is the total amount of money that a client will spend at your studio over the duration of the relationship. In other words, how much money your typical client will spend at your facility until they are no longer a client.
This value depends on your retention, because the longer you keep a client the longer they’ll spend money at your facility. It also depends on your revenue per client, because the more money you make per client every month, the more it will add up over the years.
If you can raise your retention and your revenue per client even by a small amount, it can add up to your income significantly. Take this example:
A 75% yearly retention rate roughly means that you lose 25% of your client base every year, or that for every 4 clients you’ll retain 3 by the end of the year and lose 1. In this simple example, the following year you’ll lose one more client and so on, until only 1 of the original 4 is left. So for our calculations we say that, at 75% yearly retention, this client will stay with your facility for about 4 years.
If you charge a monthly membership of $100, then this client pays $1,200 per year. Since the client will remain with you for 4 years, then this client will end up paying $4,800 during the lifetime of the relationship with your facility.
Now take a look at a more optimized scenario. Say you can get your retention rate up by 3 points, to 78%. And you are doing so well keeping clients happy that you can raise your monthly membership rate by $10, to $110/m. In this new scenario your client will stay with you for 4.54 years (so about 6 months longer than before), so they’ll end up paying your facility a total of $6,000 over the lifetime of the relationship.
As you see here, a modest optimization of just 3% yearly retention and an additional $10 per month can add up to an extra $1,200 income for your facility.
Next Steps
Ideas to boost your retention rates
Revenue
Revenue per Client
We calculate this as annual revenue divided by total clients. It is a simple number that provides an overview of your facility and can be used to perform other calculations.
Revenue per Session
This is an overview of your facility’s productivity when compared against your revenue. We are simply dividing your revenue by the amount of sessions this month.
You can use this number to keep track of the productivity of your sessions when compared to your monthly revenue. You can use these global numbers to identify symptoms of problems, and you should still use your reporting software to keep a closer track on the actual revenue and costs of sessions and programs at your facility.
Revenue per Square Feet
A measure of revenue productivity calculated by dividing the total revenue by the total square feet. The goal of this calculation is to keep an overview of how you are utilizing the space at your facility.
Next Steps
Ideas to maximize your revenue
Utilization
Average Square Feet per Client
A measure of studio capacity reflecting the space allocated for clients. It was calculated by dividing the total square footage by the number of clients/members.
This number is useful to keep track of your space utilization, and to determine if your facility can handle more clients.
Estimated Client Capacity
We arrive at this number by comparing your facility’s size to the client capacity of other facilities in the industry. You can use this number as a suggestion of how many clients other studios of a similar size are able to fit at their facilities.
Next Steps