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Bringing Your Fitness Club to Its Best Performance: Which KPIs to Use?

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Fitness club

Due to the increasing rates of obesity in many countries the recent years, initiatives such as health awareness campaigns, food labelling and physical activities improvement have been promoted worldwide.

According to the Obesity Update 2017 report, by the Organization for Economic Co-operation and Development (OECD), 19.5% of adult population across OECD countries was obese in 2015.

In accordance with rising obesity levels, statistics show the rising number of fitness center memberships throughout the years as well, at least in the United States where obesity has become a major problem in the country.

As one of the most crucial industries to help reduce % Obesity rate, it is important for fitness club owners to understand how to manage the business of fitness club properly.

First of all, every business owner, including fitness studio owners, should have key performance indicators established to measure its performance. Otherwise, how can you make sure that you are on the right track to achieve the goals of your business?

Measuring Performance of Your Fitness Club

While financial reports strongly indicate the current state of a fitness club business, those financial indicators are not the only measure that matters. The processes, skills and competencies of your employees and how often your members would likely come back to your studio are also critical areas to measure.

According to the Fitness Studio Benchmarking Study conducted by The Association of Fitness Studios, in 2015, the top three KPIs used to monitor the performance of majority of fitness clubs are: $ Revenue per client, % Average class attendance and % Client retention rate.

To better understand these KPIs, let’s break them down into specific definitions:

  • $ Revenue per client: Measures the value of total revenue generated per client. This indicator can further be broken down into the type of package or subscriptions offered.
  • % Average class attendance: Measures the percentage of gym goers on average who attend the fitness class on a daily basis. This class can be aerobic, yoga, Pilates and other typical fitness classes.
  • % Client retention rate: Measures the percentage of total members retained at the end of the reporting period, from the total number of members registered at the starting period.

The rapid growth of the fitness industry determines every fitness or health club owner continually seek better ways to retain members. There are still many aspects to measure and selecting the right KPIs can be confusing.

So, which set of KPIs is the best to measure the performance of your fitness club? Below you can find several KPIs that can help you monitor the performance of your fitness club.

Fitness club

Other KPIs to Measure the Success of the Fitness Industry

  • % Lead conversion rate: Measures the percentage of leads that are converted into actual sales, from the overall number of strong or healthy leads. This KPI is useful to identify whether the marketing or sales process of the fitness club is effective.
  • $ Revenue per square foot: Measures the average revenue per square foot available used in the fitness club. It is necessary to find out whether the space of your fitness club is maximized to its full potential.
  • % Customer satisfaction: Measures the percentage of customers or members who expressed satisfaction with the services you offer, out of the total number of customers. This KPI is essential for every business, as it measures whether their customers are happy with the services or products the company provides.
  • % Churn rate: Measures the percentage of members who discontinue or stop the subscription. Churn is obviously inevitable, but high churn rates indicate unhealthy performance within the business.
  • # Average length of membership: Measures the average amount of time a fitness club retains its members. This KPI indicates the level of customer satisfaction, per membership. The higher the average length of membership, the happier the members are with the services provided by the fitness club.
  • % Gross profit margin: Measures the percentage of sales the business owner makes, after paying the costs to run the fitness club. Measuring this KPI is important because it simply indicates whether the fitness club’s management is making profit out of the business.

There are still many KPIs to explore in regards to measuring the performance of your fitness club. Managing your fitness club to its best performance begins with selecting the right KPIs, meaning that these KPIs should be aligned with the organization’s strategy. Therefore, all initiatives taken should also be directly linked to the organizational vision.

If you are interested in finding more KPIs that can be aligned with your fitness club strategy, visit our KPI Database.

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