How do you define and measure success? Success means something different for each studio owner, but there is really only one way to measure it: metrics. Metrics are numbers that guide your success in good times and bad. So which specific metrics should you track?
Your Business’s Vital Signs: Key Performance Indicators
While all metrics are insightful, your key performance indicators (KPIs) are the specific metrics that help you track what you’ve determined to be the most important measurements of your success. KPIs are tied to targets/objectives. They measure your performance in a certain area of your business and help you see what’s working and what needs more attention.
By measuring the same KPI over time, you can watch your business improve month over month and year over year. While there are many different KPIs that you can choose to measure your success, the following are five of the most common metrics that successful studio owners monitor.
What it measures: The amount of money you make through various revenue streams: classes, products, etc.
What it tells you: How much money your studio is making — or possibly losing — and why.
How you can track it: Monitor your income versus your expenses in all aspects of your business.
What it measures: How your newest clients are finding out about you.
What it tells you: How to better refine your marketing efforts, as well as how many new clients your current clients are bringing to you.
How you can track it: Ask your newest clients how they heard about you; Reward current clients with a special perk for every referral.
- CLIENT GROWTH
What it measures: How successful you are at marketing and attracting new clientele.
What it tells you: The number of clients you have at a given point in time.
How you can track it: Compare your client base on a regular basis.
- ONLINE SALES
What it measures: The amount of sales that your business has outside of your brick-and-mortar location.
What it tells you: How important your online revenue stream is to your bottom line.
How you can track it: Software tool that tracks sales you’ve completed online, and shows you trends over time.
What it measures: The percentage of clients return over time, after a set period of time or introductory offer.
What it tells you: How successful you are at providing an exceptional client experience and exceeding client expectations.
How you can track it: Compare your committed client base over a set period of time against total visitors during the same period.
Take Your Business’s Temperature
Now that you know what to measure to determine exactly how your studio is doing at any moment, set up your own reporting system to track these KPIs over time and re-evaluate (at least annually) the metrics you should be using to monitor the health of your studio.
MINDBODY can help you track everything you need to know when it comes to your business goals. From sales numbers to client growth to marketing promotions, MINDBODY’s business management software helps you analyze the health of your studio so you can spot trends and forecast with confidence. Learn more at mindbodyonline.com.