Posted in Data
Digging for KPIs at the coalface.
I’ve been measuring KPIs recently as we move forward with my wife’s boutique fitness studio business. As well as being a damn fine corporate data analyst, I wear quite a few hats for this business and one of them right now is measuring exactly where we stand.
We moved into new premises recently and have ramped up the number of classes and services we offer. What we measured at the start of the year when Elizabeth started running fitness classes is not what we need to be measuring now we have staff, rent, rates, music licensing fees and a multitude of other outgoings.
What is the rest of the industry measuring?
I researched what other studios measure, why they do so and which metrics I’d put down in my big wish-list might actually be vanity metrics for this industry. Being able to get some peer feedback from other fitness studio owners has been vital. While the only metric that really matters is whether there is enough cashflow to meet the outgoings, there are very real business problems that I can represent by a simple “Big 5” KPI dashboard.
In this case, I’ve concentrated on:
- Member retention.
- Revenue per square foot in our studio.
- Average class size.
- Average cancellations.
- Revenue per member.
I’ll revise these after a few more months-worth of data comes through but they already give me a finger on the pulse of what’s happening with the business and where we need to shake things up.
What did we find when we started measuring these KPIs?
When we started to track these KPIs we were able to spot some trends that were starting to grow within the business. One worrying one was a steady increase in the number of class booking cancellations.
We had allowed members to book into classes up to 14 days in advance to allow them to plan out their schedules better in advance. This meant many were booking their next fortnight of classes but were forgetting which they had booked by the time the second week came around.
We decided to bring this back in to 7 days which was more restrictive on our members. At the same time, I implemented an email reminder notice that goes out the day before a class and also beefed up the information on the Manage Your Bookings section of our booking system.
How did it work out (pun intended)?
Despite having their time to book classes reduced by 50% we’ve received many positive responses from members about how the reminders and improved UX on the booking system had really made it more user-friendly and helpful for them. Cancellations dropped and continue to drop, average class size has increased and customer satisfaction is (anecdotally) up.
None of that would have been possible if we hadn’t made measuring cancellations one of our big 5 KPIs.
It will be a matter of trial and error in any size of business to find which KPI measures you should focus on. The low hanging fruit such as number of customers over the door might be #1 in the early days but less important 12 months down the line.
Measuring what turns out to be the wrong thing (or the less good thing) is a learning in itself. Analytics is all about the iteration and (not so surprisingly) so is business.