How many times have you made a decision for your fitness club that you were so sure would work, only to have it fail? If you’re like most business owners, the answer is probably more times than you’d like to admit.
But that doesn’t mean you’re a bad businessperson. The problem is probably that you made that decision based on a gut feeling rather than real-life data.
At ASF, we like to call that real vs. feel.
In fact, we like that phrase so much that we made an entire webinar out of it. In our Real vs. Feel webinar series, host Chris Stevenson, an IHRSA board member and owner of The Empower Group, interviews other fitness industry leaders about how they’re collecting data and using it to make better business decisions.
In the first episode of the series, Chris discusses everything KPIs (key performance indicators) with Kate Golden—the executive director of the Wellness Lounge at Newtown Athletic Club—and Carolyn Grasse—the general manager at QNTM Fit Life.
Below, we’ve summarized the most important takeaways and actionable items they go over.
What Are KPIs?
KPIs or key performance indicators are “a set of quantifiable measurements used to gauge a company’s overall long-term performance,” according to Investopedia. Chris describes them as metrics that give you a snapshot of where your business is at.
Why Do KPIs Matter?
As Chris said, KPIs let you know how well your gym is doing. They’re meant to give you big-picture insight into how your business is performing. Are you behind on your goals? Ahead? Right on track?
With this picture, you can better identify strengths and weaknesses in your operations. Then, you can use that information to help you make more effective business decisions.
For example, this year Kate has been focusing more on KPIs that tell her where their club’s leads are coming from. She wants to know where they’re seeing ads, which ads they’re clicking on, and other sources of lead generation. Her plan is to use this data to fine-tune where her team spends their marketing dollars for the greatest ROI.
What KPIs Should Your Gym Track?
KPIs can fall into many different categories, such as financial metrics, process indicators, and so on. Ultimately, the best KPIs for your gym to track will depend on your business goals.
You might think, like Kate did, that the more data you can track, the better. But the reality is that focusing on too many KPIs at once limits your capacity to act on the data you’re collecting.
“I would get lost in [the data], I was tracking so much,” Kate explained, “and so I really narrowed down what I needed as a big picture … So I think the most important part of the KPIs is to only track things that you’re actually going to use.”
Here are a few of the top KPIs Kate and Carolyn recommend you track if you own or operate a fitness business:
- Net membership growth
- Revenue per client
- Net promoter score
- Overall club revenue
- Recurring EFT
- Payroll to revenue
4 Other KPI Tips for Fitness Businesses
After going over their most important KPIs, Carolyn and Kate talked more about how they use data analysis to improve their respective gyms.
We’ve gathered the biggest takeaway KPI tips from their answers to Chris’s questions to help you make the most of your club’s data.
1. Use the data you’re tracking.
Kate knew she was tracking too many KPIs when she first began her data journey because she wasn’t using the information she was learning. Tracking metrics just to track them is a waste of time.
Only track the KPIs you’re going to use to inform business decisions at your gym. Narrow down what data you need to know to keep a pulse on your club’s overall performance, promote growth, and manage your team.
2. Evaluate KPIs at multiple levels.
Tracking KPIs for your entire fitness business is a no-brainer. But don’t forget that there’s value in using KPIs at more granular levels too.
Monitoring KPIs at different levels of your club, such as for individual departments and employees, will help you really know what’s going on behind those top-level numbers. Carolyn, for instance, meets with each of her department heads one-on-one once a week to discuss their individual department goals.
3. Get your team involved.
Discussing your gym’s KPIs with your staff can be a great way to motivate them and get them to rally around your goals. When they understand their value to the bigger picture of your business, your success becomes more meaningful to them.
Kate recommends having regularly scheduled meetings with your team to talk about club-wide and individual KPIs. This helps your employees know if they need to make adjustments to get on track or if what they’re doing is effective. It also gives them the opportunity to shed some insight from the trenches into why your numbers might be what they are.
Carolyn agrees that sharing KPIs with your team is crucial to success, both individually and as a business.
“I think in particular for our leadership team,” she says, “[sharing KPIs] helps them to have the appropriate tools to govern their departments and really have buy-in and understanding of what their role is in being a part of that bottom line.”
4. Dig for the story behind the numbers.
For Carolyn, the most important thing to remember about using KPIs is to maintain a balance between looking at the numbers and the people and activities that drive them. If you don’t, you could end up with what Kate calls “dirty data.”
Dirty data is when your numbers mislead you because you don’t look past them to see what’s really going on. You need to ask questions to truly understand your metrics and how to use them to make improvements.
Kate gives the example of new memberships after COVID. Although a club’s new membership KPI may have said 150 for a certain month after reopening post-COVID closures, when they looked closer, they saw that 100 of those were old members re-joining the club after leaving during the pandemic. So, their true net new membership KPI was 50.
Learn More About the Importance of Data at Your Club
Being able to track and use data to your advantage is a key skill for a fitness business owner or operator. Thanks to Kate and Carolyn’s insight into KPIs, you now know how these metrics can help you, the most important ones to track, and how to use the data you collect effectively.
But understanding KPIs is only the beginning of your journey to harnessing the power of data for your gym.
Learn more about how to figure out what your members want, whether your team is happy, and how to apply the data you have to make your club more successful in the rest of ASF’s Real vs. Feel webinar series.