How to Use Reports to Improve Your Conversions
One of a studio’s main objectives is to convert clients to loyal customers, ideally in the form of returning customers (also known as members!).
Industry-wide, the most successful fitness, yoga, and wellness studios are those that generate a high percentage of their overall income from recurring revenue (we find that a minimum of 60% is a healthy metric).
Why? A revenue stream that's recurring provides businesses with a solid baseline of income they can rely on month after month. Despite the risk of cancellations that can occur at any given time, a strategy that prioritizes recurring revenue with longer lock-in periods also provides studio owners with the ability to weather through leaner months (like summer) with more confidence and ease.
It’s no secret that acquiring a new customer is expensive, so you want to make sure that you’re maximizing the potential lifetime earnings from those new customers. Increasing your conversion rates from first-time visitors to recurring members is the fastest way to ensure your investment in acquiring new customers is a positive investment.
Lastly, once a customer becomes a member, they are likely to become more engaged in your community and take more classes, which in turn makes them more loyal to your studio (and more valuable to you as a business owner).
If you’ve been a Mindbody user for a while, you’re probably somewhat familiar with the suite of reporting tools available to you. There are a few reports that, when combined, create a robust picture of your current conversion rate. Let’s walk through the steps.
Gather your data to identify your conversion rate
First, you need to identify the KPIs (Key Performance Indicators) that provide insight into the health of your business. To capture your conversion rate, the reports you’ll want to use are:
- Sales By Category
- AutoPay Summary
Next, you’ll want to complete the following steps.
Step 1: Pull your revenue report for last month: Reports > Sales > General Sales > Sales by Category. Drop the information into your spreadsheet.
Step 2: Figure out your Recurring Revenue.
Reports > Payment Processing > AutoPays > AutoPay Summary. Tag “new” and enter this number into your spreadsheet.
Same as above > Get 'Total Successful Quantity'. Enter this number into your spreadsheet.
Calculate your autopay as a percentage of revenue by taking the AutoPay Summary Total (step 2a) and dividing it by your Revenue total (step 1).
Take away: Ideally, your autopay revenue should be somewhere between 60% and 80%.
Studios see a growth in their memberships by more than 45% per year when they implement data-driven strategies. If you’re finding that your conversion numbers are low, you’ll want to analyze one or a combination of the following factors:
Where to begin? We recommend evaluating the various key areas of your business that feed into one of the three factors mentioned above. Ask yourself the following questions as a starting point.
- Are your services consistently designed to meet client goals?
- Is your pricing model crafted in such a way that membership is the obvious choice? Without too many options?
- Is your staff well-versed in explaining the benefits of a membership?
- Are your daily operations seamless and smooth?
- Do you have a robust email marketing strategy in place to nurture clients (existing and new) into becoming loyal members?
- Are you available to listen to feedback and act or implement accordingly?
It isn’t easy to convert a client to a membership, but the answers to these questions above can help you craft a seamless upsell process that will result in happy customers and a growing top line.
Finally, make sure you have smart email marketing in place to nurture clients as they progress into a membership. This will help support the customer journey with additional touch points along the way.
A combination of the right reports and smart marketing strategies will increase your studio’s conversion rates and recurring revenue levels. To learn more about how to maximize your Mindbody software for the ultimate results, visit TelomereConsulting.com.