Finance

How You Know You're Making Progress

Spring Three marketing

Effective decision making is at the heart of any entrepreneur’s success.

When it comes to managing a boutique fitness studio it’s no different. You wear SO many hats. As a teacher, scheduler, admin, cleaner, marketing maven, HR pro and super sales person you make hundreds of decisions each day that impact the success of your business.

It’s easy to fall into the trap of working in your business ALL the time, and not spending much time working ON your business.

But, I can’t encourage you enough!

TAKE THE TIME TO LOOK AT YOUR BUSINESS AND HOW IT’S PERFORMING

Even though numbers may not be where you want to spend your time, keeping track of certain data will support you in reaching your goals. FACT.

Let’s say one of your goals for this year is to attract new clients to your business. Now would be a good time to use your booking system to see how many new clients came to your business and importantly whether they came back. Get a baseline number before you start any new marketing techniques. Then, when you offer a new promotion or pay for advertising, you’ll know whether or not it really worked.

Or, if you are already investing in marketing campaigns or a PR company then tracking how clients were referred to your business or where your ad was seen, will help to guide you in determining where you should be spending your hard earned dollars going forward. 

Tracking your progress is the first step toward success

(and numbers don’t lie).

Reviewing a certain set of KPI’s regularly can really help to guide you forward. How?

1. Your goal becomes part of your everyday life vs a long-shot dream

2. You can make adjustments early on so that you stay on track. You can see what works and what doesn’t and adapt accordingly.

3. You can celebrate achievements as you move towards your goals (this is SO important for you and your team!)

Open up an excel spreadsheet and make a note of the numbers that you most want to improve this year. What reports can you run or other data do you need that will help you make good choices and lead you toward your goal?

small changes lead to big results

Make tracking your numbers part of your system for a healthy business.

Good luck!

Numbers 101: Simple reports that show you everything

Numbers give you data. Data you need to learn, discover opportunities and understand your business better.

Spring Three - fitness business marketing and strategy



And, if you can consistently track your numbers you will get a strong sense for what is improving and what isn’t. Counting, measuring and tracking is yet another system that enables success in your studio business - and we love systems!



So what should you be looking at? Well, how about we take a step-by-step look at the reports that will tell you just what worked and what didn’t last year… ready?

Awesome.

Let’s start with sales.

Sales

This is your top line big number! But while total sales is great, we want to find out what service or product was your best seller or biggest revenue generator.

In MindBodyOnline, start by running your Sales By Category report for 2018 (also check ”compare to previous Year box” in section 1)

Hit Go and you’ll find your total revenue for both services and products.


You can sort the totals in descending order by clicking over the top line of the services section.


What do you find?

What were your top 3 revenue generators?

How about your bottom 3?

Any surprises?

Now let’s look at how that changed vs last year. 


The far right column show a percentage change - a positive % change means you have made more $$ this year than last year.


If you are not seeing a positive number - it’s time for more investigating. Did you have big changes this year to location, schedule, teacher changes etc? Was that on purpose… or not? If not, it could be time to review your retention strategies and sales procedures.


Ok, now that we’ve seen the big picture it’s time to dive in deeper.


There are so many different area’s of your business to explore but let’s look at your biggest seller in terms of pricing option… i.e. what were your clients buying to access your services?


Revenue by pricing option

Go to your Sales by Service report, set the dates to last year and click go. (Again you can sort the columns in descending order to make it easier)

This report shows how much of each package you sold last year - both in the dollar amount and in the quantity.


Obviously your larger packages will show a large dollar amount so the quantity of each package sold is also important to look at here. 


It’s always interesting to see what was the most popular pricing option… and then ask some questions:

Is that pricing option best for your business?

Or, would you rather your clients purchased something different?

Do you need to make changes to how you sell your services?

If you ran any price promotions through the year you will see that here too - did you run more or less promotions than you expected. Were they successful for your business as well as your clients?


Ok - great stuff. Let’s keep going.


Next, let’s look at your retention numbers. We know that a loyal client base means more stable and sustainable revenue numbers. But let’s see what the data tells us about how good your studio is at keeping clients from one year to the next… 


You can track your long term retention by seeing how many people visited your studio in 2017 and then again in 2018.


Retention (Year Over Year)

In Mindbody - go to your sales by service report and set the dates to 2018 - click on tag new. make a note of the number (A)


Then change your dates to 2017. Check tagged clients only. Click on Tag new. Make a note of the number (B)

Divide B by A and multiply by 100 to see what your year over year retention number is.

You are aiming for 50% YoY retention for a class based business or 80% for session based businesses. Typically the number is actually much lower - if you have a lot of out of town visitors or you run a lot of workshops you will need to take into account these one-time visits.


Now for my favorite report of all - Attendance Analysis! I love this report because it tells you more about your client behavior and gives so much more insight into what is and isn’t being purchased, how often they attend and which classes they come to. But let’s just look at how often your clients are visiting your studio business.


Attendance Analysis

In Attendance Analysis, take a look at your total visits in the past year by setting the dates to 2018 and then under section 3 run the analysis by client in Detail. Hit go… Scroll down and give yourself a high five! This is the total number of paid visits.

Then scroll back up… as you go… see how many 1’s there are in the far right column?.. this is all the people who only came into your studio one time. We’ll come back to that in a bit.


Hit Tag New - this is how many clients visited your studio in 2018 - nice work! (make a little note of this number)


Let’s see how many people came in more than 10 times… since they are the people who are (or became) your more loyal clients.


Scroll to the top and in Section , add 10 into the box “Show clients with [] or more visits.” Hit Tag New.


What’s the difference?

This is a super simple way to see how much opportunity there is to retain visitors to your studio.

Are you letting your clients know how often they should be coming?

Does your sales process seamlessly guide your clients from one step to the next from intro offer into a long term package or membership?



These numbers give you insight and show you where there is opportunity to improve for 2019… there is much more digging that can be done but this will give you a great head start in figuring out where to focus and set some goals for the year ahead.


Most of all though, looking at these reports on a regular basis will show you where your hard work is paying off and give you reason to celebrate your amazing business accomplishments!


Well done!






Let's Talk Numbers

Knowing your accounting numbers like revenue, profit and expense numbers are important… and I’m guessing that you look at those pretty often.

Or, maybe you use your bank balance as a guide - and that's a good number to know also.

But, there is another set of numbers that give A TON more insight into how your everyday activities are impacting your bottom line. 

When I start to work with a new studio owner, one of the first questions I ask them is whether they track their key numbers (otherwise known as KPI’s).

Because when you use real data to determine the health of your business, you stop relying on a “feeling” and you can become more confident that you are making the right decisions in your business.

These metrics also enable you to evaluate changes you’ve made, or determine whether your new promotion is a success.

If you want to know how your business is REALLY doing – there are numbers that will help you understand whats going on under the hood

Your key performance indicators or business metrics are a set of reports or numbers that you track to measure and analyze the health and performance of your business.

Usually, these are outside of traditional accounting numbers. This set of numbers help to give a more accurate picture of how your business is doing – what is working and what isn’t.

As a business owner - if you are not tracking these numbers then there could be a BIG opportunity to close the gap between where you are now and where you want to be

Here are a few key numbers you could use to help determine the health of your business:

  • Attendance - total paid visits, total unique clients, average visits per week

  • Sales by service

  • New client visits

  • Retention

  • Marketing metrics - referrals

These numbers gives you the data you need to learn, discover and understand. And really make sure you are focusing on what makes a difference.

Tracking what is important in YOUR business and what you are focused on achieving is key. So if you are a new business, then getting new clients is your top priority, and that is exactly what you should be tracking.

As a mature business, you may want to focus more on attendance or improving retention.

With consistent tracking of key metrics you get insight for what is getting better and what is not.

WHAT YOU MEASURE YOU WILL IMPROVE

Interestingly it’s not necessarily JUST about the numbers that your reports show you! It's also about awareness.

The act of bringing your goals into your current consciousness alone, will help you become make progress.

Counting, measuring and tracking is the system that enables success. It creates a commitment to show up and become aware of your goals each week or month.

Seeing the trends is super interesting too. It gives you the ability to manage seasonality and plan for busy (and not so busy) times.

 

Here are my Top Tips:

- Choose 3-5 metrics that you feel comfortable with and can easily measure monthly/weekly

- Review the data you have collected periodically (e.g. quarterly) and analyze what is working and what isn’t

- It can be really helpful to put the data into a visual format (vs looking at a page of numbers). Use bar charts and pie charts to do this.

- Change or adapt your promotions, marketing, schedules etc according to what you discover... then track that too!

- Look for the patterns and be aware of seasonality, local or national trends and most importantly how your numbers are associated with what you are doing within your business

Good Luck!

p.s. If you need some help looking at your numbers and understanding what they are telling you, why not book a session to go through them together. I LOVE numbers and helping you to figure out what you can do to grow them :)

 

Grow Your Profit Now! Here's How.

Profit grows in one of two ways. Either, you sell more of what you offer, or, you charge more for what you offer.

Realistically, raising your pricing more frequently than once per year will likely result in some grumpy clients.

So, to grow your bottom line, the focus should be on selling more of what you offer

This can be done by:

  • Attracting new clients to your business (and keeping them)

or

  • Selling more to your existing clients

Attracting new customers involves getting your branding and marketing mix right, having an attractive introductory offer and client intake process and above all, be consistently delivering an exceptional service.

 

Selling more to your existing clients can look like this:

- Adding in some extra sessions/classes each month for a select number of clients, perhaps suggesting they add an extra session every two weeks, or that they participate in a class as well as their weekly private. To make it more fun, you can create a community challenge -the group motivation will help to encourage participation.

- Offering a special event to your clients; such as a workshop, trunk show or retreat. The event could be held onsite or elsewhere and could be as involved or as simple as you like. You could charge for attendance or sell something during the event. Use this an opportunity for you to get creative!

- Sell accessories and merchandise that you know your clients will love. Do your research here, if you plan on adding another revenue stream to your business model, it must be well thought out and well supported. Stale stock doesn’t sell. But, fresh, current and relevant products will fly off the shelves!

 

The success of these types of initiatives relies primarily on the experience your clients have, and the way that you position the experience in your marketing.

 

If you have some ideas for growth that you are having a hard time implementing - get in touch and schedule a Power Session. You'll get practical advice on turning your idea into reality!

 

A Note About Pricing... Again

This is a follow-on to a previous article on pricing and discounts. (You can find that article here). In that article, I talked about how offering your core services for free potentially devalues them - which I still strongly believe. But, there are some exceptions to this rule, and I wanted to share these with you today so you can make use of them in your business!

Giving something away is ok when you have a valid business reason for doing so 

If you are a new studio, offering free or significantly discounted classes for a very limited time, e.g. the first few days or the first week, makes sense. It’s a great way to get people through the door and experiencing your product. It also makes sense as part of an upsell strategy, where you offer a free class if a new client purchases a package of classes or sessions on their first visit. The goal here is to get people talking about your studio, to get people in your studio and get people to return again!

If you are a growing studio and offering a new type of class or package, incentivizing your existing clients to try the class will help to expand their participation in the various services you offer. Similarly, at this point in the life-cycle of your business, offering a free class as a reward to clients who refer friends (that also become clients) can work nicely. Your goal here is to continue to grow your client base and ensure retention of existing clientele. 

As a mature business, giving things away makes the most sense when you’re not giving away your core service! That said, do give away supporting products that enable your clients to participate in your services more easily. Think socks, props for at-home workouts, mats or water bottles. At this point in your business life-cycle, you want to maintain the value of what you offer, and you have to be careful about how you manage your brand. You want to engage and retain your current clients while you look to the future growth of your business possibly beyond your existing space or services.

How you position freebies is key

Giving anything away should be positioned as a prize, a treat or a one-time special. If you choose to try any of the examples above, I suggest offering only for a fixed time and using this opportunity to create some (or ALOT of) buzz in your marketing campaign.

Free isn’t always bad. But, it works best if there is a clear intention driving the offer. 

My pet-hate? First class free. 

You set the tone of the relationship you have with your clients from the very first interaction they have with you! 

I believe that new clients need multiple visits to feel comfortable and understand the nuances of a new workout or studio. Workout studios can be intimidating places! Instead, offer a package that enables the relationship with your new client to develop over a few visits. My favorite for private sessions is a 3 or 5 class package as an intro offer.
Good luck!