Fitness was a $26 billion per year industry at the end of 2015 and it’s all too easy to think that taking part is the same as having success in it. That is not the case; the difference is between churning through revenue, where you spend it as rapidly as you earn it (or worse), and making a solid profit on your labors. To achieve that it will require your leadership, a comprehensive map of where you are going, and the right analytics and dashboard solutions to accurately measure the process of getting there.
Getting To Grips With Key Performance Indicators
Measurement is a good thing because, in a business where you could be turning over a million dollars a year and still just scraping by, those small percentages matter a lot! All the details of selling and closing are things for another day.
In the digital age in which we are now fully involved, everything is measurable to some degree, and the important things are mostly measurable comprehensively and in real-time. The question is that of selecting the most important things to measure, your key performance indicators (KPIs), which simplify your growing, breathing business to numbers and graphs on a screen.
The Description of Ideal Key Performance Indicators
The point here is seeing the executive perspective, seeing the action with clarity and using it to make smart decisions. Your team needs you to have the big picture and give them the guidance and training to keep the business moving forward. You need to find the least number of necessary and sufficient key performance indicators that capture the financial and operational essence of your business.
Your KPIs are:
- Necessary because they contain the information that you need
- Sufficient to avoid any hidden surprises
- Minimized so the signal is not overwhelmed by noise and any redundancy is eliminated
Putting Your Performance Analytics Into Practice
Managing gym business performance comes in two parts. The first focuses on selling new memberships and ensuring that monthly membership due arrive each month; this is your bread-and-butter revenue stream, and you have to continuously build it and work to retain it. As such, you will be looking at metrics that measure sales and income.
The second part is in selling training sessions and engaging with the members to keep them active, in the sense that they are participating and purchasing services that add value above the basic membership. You need to have information about the activities of your trainers and how much business they bring in. However, it is one thing to book training sessions, and another to follow through. Your accountant might worry about all of the paid sessions that your staff has yet to deliver. In accounting terms, they are a liability, also in real terms because too many members demanding immediate service or refunds could be a deal breaker for your gym.
These are the data sources that you can track using the Insight Health Club Software system. Insight gives you the tools to manage your sales and training and much more. With Insight, you can track your prospects, close the membership sale, collect the membership dues, and monitor all of the activities and performance factors that go into a winning operation. Additionally, software from Insight enables you to propel sales via your fitness training team. Track sales, service delivery, and commissions due. You will control these capabilities and more through a dashboard that delivers analytics, performance reports and alerts that will comprehensively define the operations of your gym business.
A Simple Lesson In Instrument Flying
Such dashboard analytics are like the instruments on the control panel of an airplane. In aviation, there are the commonly known readings like airspeed, altitude, and compass heading. However, there are some more analytical instruments that pilots use to make each flight a smooth and safe endeavor. In addition, pilots have attitude indicators, which show where the horizon is and the angle of attack. What aviators need is information about how these rates are changing.
Significantly, pilots need to know how fast their altitudes and headings are changing over time; they rely heavily on instrument readings for the rate of climb (or descent) and rate of turn. It is this kind of information about how the state of a system is changing that matters most. The equivalent dashboard screens that Insight delivers will have you flying high with the necessary and sufficient KPIs to put your gym on top of sales performance in your local fitness market.
Bibliography
Fagan, Lawrence. Finding Your Retention Rate and Why It Matters. March 22, 2016. https://blog.gyminsight.com/3741-finding-your-retention-rate-and-why-it-matters/ (accessed March 29, 2016).
IHRSA. Health Club Industry Overview. https://www.ihrsa.org/about-the-industry/ (accessed September 15, 2016).