If you want long-term success in your business, you need to have a deep understanding of how things are going at all times. Where do you get those insights? Metrics!

Metrics and key performance indicators (KPIs) can tell you so much about your business. They can show you whether your marketing is working and define your studio’s profitability. 

Unfortunately, they can also seem confusing and overwhelming. Which metrics are best to track? How do your numbers compare to other fitness businesses? What should you do if you don’t see the KPIs you wanted?

Let’s look at five of the most important boutique fitness studio metrics and learn how to calculate and use them in your business.

KPI #1: New customers

If you want to know whether your studio is doing well, you need to know whether it’s attracting new customers consistently. So, track the number of new customers you get each month!

But before you can calculate the percentage of your clients who are new, you need to define what a “new” client is. There are several different approaches, so you can pick the one that makes the most sense for your studio.

I like to define new clients as “never-evers” — people who haven’t done anything in my studio before. But you might define a new customer as someone who is trying a different service in your business or someone who comes back after a certain amount of time away.

Once you decide what a “new customer” is for your studio, you can calculate your new customer acquisition rate. Take the number of new customers you have at the end of the month and divide it by the number of total customers you had at the beginning of the month. Then, multiply the result by 100 to get a percentage.

For example, if you add 4 new clients in a month and you had 200 customers at the beginning of that month, your new customer acquisition percentage is: (4/200)*100 = 2%.

The fitness industry standard for new customers acquisition is between 0.5% and 2%. So if you are seeing numbers in that range most months, it’s a good sign that your marketing is working well to attract new clients to your studio.

KPI #2: New client conversion rate

Getting a steady stream of new customer is important. But how many of those people who try out your Pilates or yoga classes stick around?

To answer that, you need to calculate and track your new client conversion rate. And before you can run the numbers, you need to decide that “conversion” means to you. 

In my studio, we define a conversion as someone who pays for an ongoing service, like a membership or a package of classes. But that’s not the only way to do it! You might say a conversion happens anytime someone pays for something, like coming to a regular class after attending a free event.

Once you have a clear definition of client conversion, you can calculate your conversion rate. Just compare the number of people who meet that threshold with the number of new customers in a month. 

For the fitness industry, a 50% conversion rate is fairly standard. If yours is consistently lower than that, you might want to take a closer look at your marketing. It could be a sign that you aren’t attracting the ideal clients and need to change something about your messaging.

KPI #3: Retention rates

How many of your paying clients stay with your studio for the long haul? That’s what you can find out when you calculate your retention rate. To do so, take the number of returning clients and divide it by the total number of customers in a month. Multiple that result by 100 to get a percentage. 

For example, if you have 150 returning customers in a month and a total of 200 clients that month, your retention rate is: (150/200)*100 = 75%.

Most experts will say that a 70% retention rate is standard for fitness studios. In my business, we aim for an 85% retention rate because that shows that we’re serving the vast majority of our clients well. 

And remember, retention is important for your bottom line, too. It’s far more expensive to acquire a new client than to retain an existing one. The most loyal clients you have, the better!

KPI #4: Utilization rate

The utilization rate offers another way to analyze how your studio is performing. If you have invested a lot of money in equipment that doesn’t often get used or are paying instructors to teach classes with only a few people in them, you’re losing money to high overhead costs.

On the other hand, if you studio is consistently at or near capacity, that could indicate it’s the right time to invest more resources to expand your services. Maybe you buy more reformers or hire an instructor to teach evening classes. Maybe you even open a new location!

How do you analyze utilization rate? It’s about analyzing how much of your resources go to revenue-producing activities. For example, most of your classes are full, most of your equipment is used during a class (or open gym hours), most of your instructors book out their sessions, etc. 

For this KPI, it’s usually better to look at a longer time frame than a month. I calculate utilization rates for the entire year, which allows me to see how the busy months balance out the slower summer season.

KPI #5: Average revenue per customer

Finally, look at how much revenue your average customer brings in. For Pilates studios, the industry standard is $50 per customer per month. 

Tracking revenue numbers for your customers gives you valuable insight into trends. You can see which clients consistently spring for higher-cost services. You can identify classes or services that could bring in more revenue. 

And you can also use this number to set your marketing budget — especially if you look at the average lifetime revenue a customer generates. For example, if your average client generates $50/month and stays for five years, that’s a total of $3,000 in revenue. Knowing that, you can decide how much you’re willing to invest in marketing to bring in a new customer.

Metrics help you run a better business

It might sound boring to spend time calculating metrics, but those KPIs give you essential insight into your business. When you know how many new customers you’re getting, how many of them stay, and how much revenue they bring in over the years, you can make data-driven decisions about marketing and expanding your business.

Not sure where to start? Try my Lead Tracker tool. It’s a done-for-you spreadsheet that makes it easy to keep track of new customers and their journey from lead to loyal client. You’ll be able to see how long conversion takes and gain insights to help you optimize your marketing efforts. Pick up your template and start tracking your leads efficiently!