As business owners, you’re constantly tasked with making decisions: about what marketing channels to explore, what class times to add or remove, whether you’re ready to open a new location, etc. To make those decisions, you may rely on the same business model and approach you always have, or go with what your gut’s telling you or what you see other studios doing in your area.
The most optimal way to know if what you’re doing is working, however, is by utilizing data. Your data will tell you about your most profitable and least profitable class offerings, time slots, products, instructors, marketing channels, and more to show how you can run your studio or gym more efficiently while better catering to your clients’ needs.
Having a data-oriented mindset is not a science or a personality trait—just like your approach to fitness, it requires discipline and dedication. We checked in with Mike Huling, owner and instructor at Reformation Fitness in Washington D.C. to get his insights on how to approach business planning with a data-oriented mindset. With his advice, we’ve broken it down below:
Collect data from various sources
When it comes to the data sources you use, Huling offers this advice, “Some sources are exceptionally valuable at a high level, but other sources are much better suited at a granular level. Keep in mind that any data source has its biases and faults, too.”
This is why collecting data from various sources key. If you rely on one data source alone, the information you base your decisions on may be skewed because of natural biases in that program, or even human error. Certain sources may help you see the high-level information—like what your peak season is and the pages on your website that attract the most visitors—but other sources can show you the granular information like what times of day in the past month were busiest and if that page that gets the most visitors is actually helping to convert someone to purchase a class or package.
Your scheduling platform software, such as MindBody or ClassPass, can help you track attendance and revenue and create custom reports. Monitor website traffic and user behavior as well with Google Analytics, a useful tool to put real numbers behind what information inspires a visitor to buy a membership, book a class, download a class schedule, sign up for a newsletter, or buy a product from your online shop. To assess how your social efforts are working, each platform has its own metrics built-in for businesses to produce daily, weekly, or monthly reports that track engagement and interaction with your posts and advertisements.
Compare the same variables
If you are trying to look at patterns in client behavior or studio profits over time, you need to look at the same variables each time you pull data for a report. If on your first report you look at number of classes offered, number of active members, total client visits, and net revenue, then next month you should look at those same exact variables to see what has changed and the outcomes.
Huling advises, “Make sure that you keep track of all the variables and steps taken, so the next time you pull the data you are comparing apples to apples.”
Write out your process for pulling reports so that as you continue doing them, it becomes a habit. When it comes to data and reporting, you want to be as systematic as possible. That means you need to make an effort to stay organized so that you aren’t trying to start over again every time you want to check how your business is doing and try to find and fix weak points.
Normalize your data to track performance
It can be difficult to compare two different classes taught by two different instructors at different levels and on different days of the week. To avoid being distracted by extraneous factors, try to normalize your data to see what is and isn’t working, and then reintroduce those other details to determine what may be causing a class or product to underperform.
When checking class performance in particular, Huling recommends that studio owners try to, “take out factors such as time of day or day of week. If one particular class seems to be below average in terms of attendance, try to explore what might be the factors – often it might be a misalignment of offering times and class level. If your Tuesday evening class at 7:30pm is an intermediate level, it might make sense to make the Thursday evening class at that same time an intermediate level as well. Little changes and adjustments can lead up to meaningful impact on your business growth strategy.”
Isolate variables to get your bottom line
On that note, another important part of using data is to determine where you have profits and losses. This is easier to see when you isolate certain variables to get to your bottom line.
As Reformation Fitness is a studio with a business model based on class attendance, Huling finds his bottom line by determining how much each class costs to run and how many clients must attend to avoid profit loss.
“Take all your monthly non-instructor expenses, including taxes, licenses, rent, utilities, marketing spend, insurance, credit card processing fees, and divide this by the average number of classes you have per month. This number, along with your instructor fee is your actual expense for offering a class – it will give you a good idea of how many spots you need to fill for any given class to actually break even.”
Tip: Try ClassPass’ Studio Forecasting Model to input your unique data around class schedule and monthly costs to generate a custom P&L for your studio.
Track often and over time
Check your data regularly to see if any changes you make are helping or hurting business or if it is time to make a change to your offerings or schedule. An easy, high-level metric to track is average class attendance monthly, quarterly, and yearly to get a quick gut-check on how your business is performing.
Huling suggests keeping a calendar to remind yourself when to check your data and also explains, “Some data sets are worth looking at weekly, others monthly and maybe a few even just quarterly. It’s easy to get lost in the data, but keeping a schedule and looking at trends over time is far more valuable than just looking at any data set at a single point in time.”
Keep a record of past reports so you can recognize trends over time. Compile a year-to-date report summary each month or quarter to get the big picture. Only checking your data randomly and without reference to past records won’t help you judge or measure any growth in comparison to past periods and doesn’t help make those important business decisions.