Key Performance Indicators (KPIs) are metrics used to gauge progress toward a desired goal or target, and they provide focus for strategic and operational improvement by establishing an analytic baseline by which to measure success. By tracking and analyzing these important values, you’ll be able to visually assess how effectively you’re meeting your fitness center’s goals and objectives.
But with so much data out there, how do fitness business owners decide which metrics matter, and which ones to track? Read on to learn five of the most popular KPIs used for operations financial benchmarking, increasing conversion rates, improving client retention rates, and managing facility center growth.
1. Revenue per Client/Member
The #1 most tracked KPI for gym and fitness studio owners is Revenue per Client (RPC), a simple calculation determined by dividing annual revenue by number of clients. RPC is a quick way for business owners to determine how many members they will need to be profitable, which then allows them to design marketing strategies with quantifiable goals.
2. Average Class Attendance
Average Class Attendance (ACA) measures the percentage of gym goers who attend fitness classes (spin, yoga, Pilates, etc.) on a daily basis. This KPI is extremely important because group class offerings are one of the largest draws and biggest selling points for many gyms and health club owners. Understanding your facility’s ACA is also critical because it will determine the breakeven point and profitability of each class, allowing you to adjust your class offerings and frequency accordingly.
3. Client Retention Rate
Client Retention Rate measures the percentage of total members retained at the end of each reporting period. Your client retention rate is a critical KPI because it’s directly linked to overall profitability and long-term success. For example, if you notice your client retention rate is low, you’ll want to identify the cause as quickly as possible to remedy it and reduce the likelihood of future loss.
4. Profit Margin
Profit Margin (PM), which is calculated as a percentage of sales, tells you how much money you have left after paying the costs to run your fitness center. Reviewing the PM for all elements of your business allows you to see which areas are profitable, and which may be lacking. Identifying the areas that need improvement give you the opportunity to consider what changes can be implemented, or what additional programs or elements can be added, to turn those numbers around.
5. Average Daily Attendance
Average Daily Attendance, cited as a top KPI by nearly a quarter of fitness studio owners, tells you how many people come to your health club or fitness center, on average, per day. While this is a popular metric to track, it lacks the same level of insight as other KPIs because it doesn’t tell you why they came in, or when they came.
Conclusion
While the five Key Performance Indicators we addressed in this blog are specific to the fitness industry, KPIs are relevant and applicable to all businesses to ensure long-term viability and profitability. EZFacility’s extensive reporting suite can help you get an in-depth look under the hood of your business–including financial, point-of-sale, marketing, payroll, membership and training reports. Schedule a free online demonstration and personalized product tour to learn more