Making the most of your business means understanding the numbers and how to maximize them.
Making sense of market research reports and studying industry key performance indicators (KPIs) sounds intimidating, but it doesn’t have to be. We sat down with Josh Leve, Founder and CEO of Association of Fitness Studios to learn more.
Merrithew: How can studio owners and others in the fitness industry interpret market research reports and make the information work for them?
J. Leve: Interpreting market research data can sometimes be overwhelming. With so much quantitative data, the typical fitness business owner can easily get lost in the sea of numbers, percentages, and statistics. The most important thing is to seek out the data points or metrics that will have the biggest impact on your business. For example, if you want to increase customer retention, seek out benchmarks to compare your business to others. From there, your job would be to seek out the business resources necessary to improve the metric you’ve focused on.
Merrithew: How can you determine which metrics are necessary for your business?
J. Leve: The best way of finding the numbers that make sense for your business is to look at the data from many different angles. Market research is meant to provide an overview of the market and provide the framework necessary for businesses to proactively identify current and future trends in the marketplace. Possibly the most important numbers to take note of are those that clearly show a trend. For example, if you notice text messaging (or SMS) use by fitness studios is increasing year-over-year, that would be a trend worth looking into further, dedicating resources to research and potentially implementing into your business. Market research provides a big-picture view that affords business owners the ability to see changes and react to those changes quickly to improve business.
Merrithew: How about key performance indicators? Which are useful for small businesses?
J. Leve: According to Association of Fitness Studios’ annual research, it’s clear that there are a specific number of KPIs that studios and gyms are monitoring and measuring. In AFS’ most recent major industry research study, the following KPI's are being measured most by studio owners: revenue per client/member; profit margin; member/client retention; average daily attendance; average class attendance levels. These KPIs show studio/gym operators have placed a significant amount of focus on measuring the effectiveness of training and client retention efforts.
Josh Leve is the Founder & CEO of the Association of Fitness Studios. AFS provides studio and gym owners running facilities of up to 10,000 sq. feet and entrepreneurial fitness professionals with the platform to effectively start, manage and grow their businesses. For more information, see afsfitness.com.