One of the greatest challenges for many studios is that they aren’t growing fast enough.
This problem leads to numerous hardships and additional complications for businesses, as well as plenty of frustration.
After all, you put in all of the effort and give it your best, but things still seem to move forward at a snail’s pace. Then, when you try to determine the cause of the slow growth, you realise that so many aspects of your business need attention.
So you start playing whack-a-mole, chasing after the source of your business issues. You try to cover every base, sending yourself and your team into a spin. But it’s not clear what works and what doesn’t.
In the end, the only things you’re left with are feelings of uncertainty and a lack of control. And it’s all because of a simple mistake in the approach:
You can’t afford to make reactive decisions in your business.
By the time you start patching up the critical spots, it might become nearly impossible to control what happens. That’s why the best way to go is to make your decisions proactive and based on data.
This article will explain how to leverage numbers to grow your business and avoid the common pitfalls of an unprepared studio owner.
The Four Futures Outcome
Imagine an aeroplane flying from San Francisco to New York.
On a regular flight, getting from one city to the other would be pretty straightforward.
But imagine if the plane veered off course by only two degrees. In that case, the aircraft would end up in Baltimore instead of New York.
In other words, a small mistake can lead to significant consequences in the long run.
The same principle applies to businesses, and it’s the basis of the Four Futures model.
Based on your metrics, your business might be looking at one of four possible outcomes:
Furthermore, these outcomes can manifest over different periods, which is why monitoring your metrics on a three, six, nine-month, and yearly basis is crucial.
Naturally, you’ll want to gravitate more towards better outcomes, ideally reaching great every time. But to do this reliably, you’ll need to understand how metric tracking and measuring work and why it matters.
What You Need to Know About Measuring Your Metrics
When studios don’t understand their metrics, they might find themselves in a strange situation:
They might be winning without even realising it. On the other hand, they could be on a downward spiral and not know it.
This is why understanding your studio’s metrics is crucial.
Now, the essential things you need to know about your metrics boil down to three key principles. The first one is simple:
Your numbers should never be a mystery.
The reality is that so many studios have no idea about how many leads they’re getting. Not to mention their conversion rates, rollovers, and other metrics.
It should go without saying that missing out on the crucial numbers can make you leave a lot of money on the table. Plus, your team likely won’t have a clear direction towards success.
Next, you can’t keep making decisions based on emotions.
This isn’t because emotions are necessarily bad in business. Rather, if you allow your feelings and stress levels to dictate your decisions, your team will never know which version of you will show up. This will make the work process unclear.
Your decisions should be driven by data because that’s the most definitive and measurable way to go.
Finally, understanding your metrics will allow you to get help whenever you get stuck.
If you don’t know where you are and what’s working and what’s not, nobody will be able to help you to their best ability.
Now, these principles require you to get familiar with at least some crucial metrics. Let’s look at them in more detail.
The Numbers You Need to Know
At the bare minimum, every studio owner should know about one critical set of numbers:
To be precise, you should understand how many leads you’re getting weekly and monthly, as well as their sources.
Some of the leads will come from paid sources, while others will be from organic sources. Knowing how many leads either side brings will inform you about the cost-efficiency of your marketing.
Then, you should view the number of leads in comparison to how many sales you’ve made. And if you express that ratio as a percentage, you’ll get your conversion rate.
Another crucial metric is your rollover rate. The magic number you want to reach in that regard is 80%, but getting there will require you to understand some other numbers.
In particular, you’ll need to keep track of your overall number of members and whether your studio is at a weekly net growth or loss. This particular set of numbers brings us to one metric that will be the key to your studio’s growth.
The Key to Growth
To put it simply, growth is rollovers minus churn.
Now, this is simple in theory. If you want your studio to grow, you need to increase the number of rollovers and reduce the amount of churn.
In practice, however, it can be a more complex matter.
To increase your rollover, you need to boost your leads, conversions, and sales. And to reduce churn, you have to improve engagement and your retention systems.
All of this work starts with tracking your numbers. If you do that correctly, you’ll be heading in the right direction.
Leverage Numbers to Bring Your Studio to the Top
Understanding the crucial metrics in your business is the very thing that makes or breaks a studio. In fact, it’s the main difference between the top studios and the rest.
Remember, the studios that truly succeed have a clear grasp of their numbers and know how to tweak them to get optimal results.
If you devote enough time and effort to learning about your key metrics, you’ll be able to make your studio as efficient as possible, making it stand out from the competition.