Mastering Fitness Business Metrics: Insights for Success

I still remember when I first started out as a membership consultant. My mentor at the time pulled me aside and said “You’re similar to a doctor - your job isn’t to just sell, it’s to help save lives by changing lifestyles.” 

That perspective shaped my entire outlook. I realized that fitness is more than just business - it's an industry that transforms people's health, happiness, confidence and longevity. That's what gets me fired up! Together, we truly have the ability to change the world. 

Though not unique to the fitness industry, it’s fair to say there aren’t many industries where your drive to attract more customers, or in our case members, and determination to see that they stay true to their plans and goals, is genuinely for their own betterment and ultimately serves a greater good. 

However, we can't disregard financial viability. At the end of the day, you must keep the lights on and make payroll, no matter how many lives you better. If you can't remain operational, your ability to create change is lost. As passionate as we may be about fitness, business realities can't be ignored.

The Significance of Understanding Your Numbers

I learned quickly that in order to thrive, you need to understand your sales numbers. As the saying goes: if you can't measure it, you can't manage it.

Track detailed metrics 

Even if you aren’t actively tracking these already, you’ll already have some idea of what your core metrics are. Consider some of the following:

• How many leads marketing produces.

• What the conversion rate is.

• How much revenue each membership consultant generates.

• Average yield per member.

• Monthly recurring revenue goals.

• Time from lead to close.

While the full picture will differ from one business to another, or even one location to another, these headliners are definitely the right place to start as this data precisely exposes a business's strengths and deficiencies. You can then create clear individualized goals or KPIs aligned with each team member's talents for converting promising leads into satisfied members.

Let’s look more closely at some of these key metrics. 

Number of Leads

Understanding your sales funnel numbers starts with properly tracking leads. Make sure you have clearly defined within your business what specific factors qualify someone as an actual sales lead. For example, is it anyone who downloads content from your website? Signs up for a free trial? Has a consultation call with a membership advisor? It’s worth considering too that these differing types of leads imply different levels of intent - downloading content and having a consultation demonstrate two quite different levels of interest. For this reason it can be useful to segment your leads and monitor how different sources or types of leads perform for you. This will help you make decisions in future about how you generate and define leads, and the best course of action for different types. 

Now that you know what does and doesn’t constitute a lead, you can accurately count how many leads your team is bringing in each month. This number gives you a starting point for calculating conversion rate. 

Lead conversion rate

To calculate this, you must keep track of the number of leads who eventually become paying members. The calculation itself is quite simple - once you have the number of conversions (new members) and the number of leads during a specific time period, plug these values into the following formula to calculate your conversion rate:

Conversion Rate = (Number of Conversions / Number of Leads) * 100

For example, if your gym had 100 leads in a month and 20 of them became paying members, your Conversion Rate would be:

Conversion Rate = (20 / 100) * 100 = 20%

This means that 20% of the leads who interacted with your gym during that time period converted into paying members. Tracking and optimizing your conversion rate can help your gym understand the effectiveness of its sales and marketing efforts and identify areas for improvement in the lead conversion process.

Revenue per Membership Consultant

To assess the performance and productivity of your sales team members, it’s important to measure their revenue generation individually. As with any other metric, much of this will come down to good practices when it comes to records and reporting. You’ll need to track all membership sales based on who closed them, and record the value over a specific period of time. By totalling this number each month for example, you’ll have a total revenue figure for each membership consultant and know what they’re bringing in to your business. 

Yield per Member

The Yield per Member will help you understand the average amount of money you earn from each member, which helps assess the financial health of the business and evaluate pricing strategies. The simple formula is as follows:

Yield per Member = Total Revenue / Total Number of Members

To get to this number, you first must determine Total Revenue. Calculate the total revenue earned by your gym over a specific time period. This includes revenue from membership fees, personal training sessions, group classes, merchandise sales, and any other services you provide.

Secondly, identify the total number of active members during the same period. This includes both new and existing members who pay for gym services.

Finally, divide the total revenue earned by the total number of members to determine the yield per member.

Time from lead to close

Calculating the time from lead to close is essential for understanding the efficiency of your gym's sales process and how quickly leads are being converted into paying members. 

Again this starts with good records and reporting, you’ll need to track the dates when leads enter the sales funnel and when they convert into paying members. Your CRM or membership management system should record these dates for you. Then for each lead that converts, it’s a matter of calculating the time elapsed between the date the lead entered the system and the date they converted into a paying member. A simple calculation, but one that is very worthwhile. 

Once the time from lead to conversion is calculated for multiple leads, aggregate the data and analyze it to determine the average time it takes for leads to convert into paying members. Analyzing this metric will help your gym understand the effectiveness and efficiency of your sales process. A shorter time from lead to conversion generally indicates a more streamlined and effective sales process, while a longer time may signal bottlenecks or inefficiencies that need to be addressed.

Key Performance Indicators (KPIs)

KPIs, or Key Performance Indicators, are measurable values used to track progress towards achieving strategic goals and objectives. The metrics above offer a great starting place for KPIs due to their ability to reflect the critical success factors of your gym. KPIs can vary widely, but tend to cover financial performance, customer satisfaction, operational efficiency, and employee productivity. Consider the following characteristics when selecting your KPIs:

Relevance: KPIs should directly align with your strategic objectives and reflect your priorities.

Measurability: KPIs must be quantifiable and capable of being measured accurately using reliable data.

Actionable: KPIs should provide insights that prompt action and drive improvement.

Timeliness: KPI data should be available in a timely manner to facilitate decision-making and corrective actions as needed.

Benchmarking: KPIs are often compared against historical data, industry standards, or targets to evaluate performance and identify trends.

Targets

You know what to measure and how, but now you need to think about whether or not you measure up! The critical next step in deriving value from the metrics you’re recording, is to set goals to understand which parts of your operation are performing and which are opportunities for you to improve. 

Consider that your goal is 100 sales per month at a 30% conversion rate, that tells you your marketing target is to have 333 leads per month entering the top of the funnel. If you’re not hitting that lead volume currently, look at your marketing plan. Are you hosting community events? Driving email campaigns? Making social media connections? 

You will of course need to set targets for all your key performance indicators. If you aren’t doing this already, one way to start is to begin recording this information for three months. This way you can set a benchmark based on where you are now, and compare this to bigger headline targets, such as where you need to be in overall revenue terms. Each of the metrics above become a lever you can ‘pull’ by experimenting with ways to increase that number. Stick to one at a time so you know what’s working. For example, if you know you can comfortably convert 30% of leads, then can you leverage your lead generation efforts to increase sales? Or perhaps you have a full sales funnel, and a healthy conversion rate, would a shorter lead to close time be a worthwhile target in line with your wider strategies?

A Word on Lead Quality

We discussed above how leads can have a variety of levels of intent, in fact it’s fair to say that not all leads are created equal when it comes to sales readiness. Categorize yours by considering lead status, to focus energy appropriately:

Level 1: Just entered email for free content

Level 2: Downloaded premium content resource

Level 3: Attended educational webinar

Level 4: Scheduled sales call

Automate workflows in your CRM tailored to each lead level - this prevents overwhelming new contacts while promptly engaging sales-ready prospects, and coaxes those new contacts along, closer to a state of readiness in the process. 

Closing Thoughts

Fitness operators can’t just assume “if you build it, they will come.” An intentional focus on lead generation, qualification, and management ensures you have sufficient sales pipeline volume to fuel the level of recurring revenue needed to thrive.

It's extremely fulfilling, changing lives through fitness. It's even better when those lives changed translate into a thriving business. By embracing sales numbers and technology, together we can keep fulfilling our mission of impacting as many people as possible!