If you want to succeed in 2023, you need to know what that success looks like. Success is individual, so to understand what success is for your gym business, you need to understand where you are now.
Know how you’re currently performing, and you’ll be able to effectively set goals for the next year.
Are you meeting your current goals? Are you on target for success? Or do you need to make some changes?
To get that essential insight into your gym business, you need to track your most important KPIs.
What are KPIs and why are they important?
Every gym business needs to know certain numbers to understand how they’re operating. The numbers that reflect your sales, your revenue, and your overall performance. It’s how you know if things are going well or not.
Key performance indicators (KPIs) are an effective way to track and monitor the most important metrics in your business.
Together, they highlight the numbers that you must focus on if you want to grow your gym business.
There are lots of different metrics to track, but the five most important ones for gym business are:
1. New member sign ups
New member sign ups show if your marketing is working. This KPI indicates whether you are reaching your target audience, how your message is resonating with prospects and if your offer is strong enough to attract interest.
It’s important because you won’t grow your business without new members. The more sign ups you can get each month, the faster your business grows.
Calculate by: Adding up the total number of new members who sign up in a set period (e.g. each month). Compare with previous periods to track improvements.
2. New member conversion rate
New sign-up metrics are great, but they don’t tell you the full picture. They only reveal the number convinced by what your gym has to offer. You also need to know who wasn’t convinced, who went elsewhere.
Your new member conversion rate tells you how effective your sales team is in converting enquiries into paid members. It shows you how well your sign up and onboarding process works and will help you see if you’re leaving money on the table.
Lots of enquiries but few conversions? You know where to focus your efforts.
Calculate by: Dividing the total number of new members by total number of enquiries, in a set period.
3. Cancellation rate
Tracking your cancellation, churn and/or retention rates (three ways of looking at the same core metric) will help you see how well your gym is performing with current members.
You need to understand why my members quit, identify any trends quickly, and make any appropriate changes to reduce cancellations to grow your business.
Calculate by: Dividing the total number of cancellations in a month, by the total number of members at the start of that month.
4. Frequency of visits
If you want to understand how much your gym is actually used by your members, you need to track frequency of visits. You should be recording how often they visit (in a set period) and how engaged they are.
This metric will help understand how many sleeping members you have, how many value your gym and how they interact with your facilities – all invaluable information to help you improve your business.
Calculate by: Dividing the total number of visits each month by the total number of active members.
5. Total revenue
Unsurprisingly, the final important metric your gym business should track is all about the money. Your total revenue.
It’s important because it’s the overall money you’re taking from all your revenue streams. After all your costs, you need to make sure you’re in profit.
Calculate by: Adding the amount of income from all your memberships and any other sources (for example your shop, your cafe and any pay-as-you-go classes).
What other KPIs could your fitness business track?
These five metrics are just the tip of your gym business. There are dozens more you could track, including:
- No. of reactivations
- No. of prospect tours
- Acquisition cost per new member
- No. of leads
- Member satisfaction rates
- Average member lifetime value
- Class availability
Find which numbers and metrics work best for your business.
You might want to pick one or two that are important right now (or those which most need improving) and target your efforts there.
Get on track for success in 2023
Tracking these essential KPIs – and any other metrics relevant to your fitness business – will help you stay on track for success in 2023.
The key is making sure you can quickly and easily access the numbers, and that you know the data you’re using is accurate, reliable and in real-time.
Software like Xplor Gym makes it quick and efficient to get the insight you need into your metrics, helping you monitor KPIs across multiple sites at the click of a button. And it can do much more than that to help you succeed in the next year.
Identifying your KPIs is just one step to success in 2023. Using them to set achievable goals is step two in our latest guide: 7 Steps to a Successful Gym Business in 2023. Download your free copy here.
Article by Xplor Gym
First published: 10 October 2022
Last updated: 02 November 2023