What’s your big picture (part 2)

Time to really focus in on these targets. But first let’s recap for a few moments….

Last week we spoke about getting a crystal clear idea on what you want to get out of your business. Then we took it a couple of steps further and started working out how much it was going to cost and how many members this equated to. From here we also spent a few moments looking at how far away we are from that target right now and then set a timeline in place for when we wanted to achieve this ‘big picture’.

Now let’s work on setting some specific targets that we can work on. Things that will drive us each and every week so that we know we’re moving towards our ideal ‘big picture’.

What are you losing?

To kick things off, we need to work out how many members we’re losing on average each and every month. This is called your ‘attrition rate’. Member attrition is a natural process – but I’m not going to talk about how to better retain members, this is a whole series of posts in itself.

If you have your membership database set up on Zen Planner or Mind Body Online, this whole attrition calculation process is very easy, it’ll just be done with a few clicks of the mouse. But, if you’re not readily dialled in with the numbers in your business, the next step can prove to be slightly tricky.

Let’s start by looking at all of the new sign ups you’ve had over the last three months – how many were there?

Now you need to go back to your membership numbers again and see what your membership growth has been each month over the last three months.

Did the two numbers match, as in did your membership growth match your new member sign ups?

If so, that’s great. It means that you’re not losing any members. But it also tells me that you’re still quite small in overall size – as this is not the norm. That said, if you’re growth wasn’t as big as the new sign ups, the difference is your attrition rate.

The monthly target

So far you’re armed with the knowledge of how many new members you’re going to need to achieve your end goal. Now let’s divide that number by the amount of months that you’ve listed down being your goal timeline.

We’re nearly there – so stay with me on this. You now need to take that monthly number of new members and then add this to your attrition rate.

I think it’s time we worked on a practical example for all of the steps to date;

Our monthly end figure to achieve our big picture is; $16,500

We’ve worked out that our average client spend each month is; $150

The number of members we need to achieve the end figure is; 110

Current membership base is; 68

New enrolments needed to achieve target is; 42

Our timeline is; 10 months

Monthly attrition rate is; 2

New enrolments each month for 10 months is; 4.2

Factoring in the attrition rate is; 6.2

So each month, based on the hypothetical above, we’re going to need 6.2 new enrolments each and every month for the next 10 months to be able to achieve the big picture by the nominated timeline.

But we can take this further

Now we’re getting in to the finer details of tracking our numbers – so while it’s tough, I need you to hang in there just a little bit longer.

To be able to achieve the target enrolments each month, we also need to factor in a thing called our conversion rate. The conversion rate is the percentage of people that join after going through the sales process (which for most boxes is a free trial week or intro session).

So let’s say that we have 10 people that start our intro session or a trial week. From this, we have 7 people that join. This means that our conversion rate is 70%.

Let’s go back to the hypothetical numbers. If we need 6.2 new members each month and we’re converting at a percentage of 70%, well this basically means the total number of sales presentations that we need to make each month can be found if divide 6.2 by 70% (if you’re not crash hot at maths, just trust me on this).

For example;

New members needed; 6.2

Sales conversion rate; 70%

Sales presentations needed; 6.2 / 0.7 = 8.6

Okay, so now we need to get 8.6 new sales presentations each and every month to achieve our target of 6.2 new members each month, which will then help us achieve our target of 110 active members, which will also get us hitting our target of $16,500 as a monthly revenue, which will allow us to paint our big picture.

But we can still take this further

We know that we need to get 8.6 people into the box each month to put through the sales program. But, we can drill down on this even a little more. To do so, we need to know establish the ‘show rate’ at our box.

The ‘show rate’ refers to the percentage of people that have enquired that we actually get hold of, make the appointment for, who then show up to go through our free trial or intro session.

To find this out, let’s go back over the last three months again;

How many enquiries did you have?

From of these enquiries, how many actually made it to the stage that they actually turned up for the trial/intro session?

The number of people that turned up, against the total number of people that enquired is your ‘show rate’ percentage.

Example time – for the last month;

Enquiries were; 13

Trials/Intros commenced were; 6

Show rate was; 6 / 13 * 100 = 46.1%

You still with me?…

We need 8.6 people doing the trials/intro’s each month to get our 6.2 new members. But because we’re only getting a show rate of 46.1% – that means if 100 people enquire about our CrossFit program, we will only get 46 of these people turning up to our box to do their trial/intro session.

To find out how many leads we need to get to achieve our 6.2 new members, again it’s simple division. Just divide 8.6 by 46.1%.

Example once again;

Trials/Intro sessions commenced; 8.6

Show rate percentage; 46.1%

Leads required to achieve 8.6 trials/intros; 8.6 / 0.461 = 18.7

So there we have it!

Each and every month, we have to get 18.7 new enquiries in to our CrossFit program (that’s 4 – 5 new leads every week).

Do this and we will get 8.6 of these people showing up and starting their free trial or intro session.

From here, we know that 6.2 of these people will become new members.

Now factoring in that we’re losing 2 existing members each month, this will give us our necessary growth rate of 4.2 new members each month.

This will help achieve the 42 additional members we need to generate a monthly revenue of $16,50o.

And at $16,500 gross revenue each month, that will pay all of the bills and allow us to lead the life that we first wanted when we decided to open up our very own box.

The big thing in all of this is that you can start to look at each step here and work and analyse key metrics of your business to find out what needs fixing.

– What is your lead generation like (are you getting the numbers enquiring)?

– What is your show rate like (are high percentages of the enquiries coming in for your sales presentation)?

– What is are your conversions like (are high percentages of your intro/trials becoming members)?

– What is your attrition rate like (are you losing very few members each month to cancellations or non-renewals)?

– What is your average client spend like (do you have multiple streams of revenue that gives you clients the opportunity to buy from you, as opposed to seeking it elsewhere)?

Heavy, I know.

But can you see how this whole process of reverse engineering your goals and having these weekly targets can help drive your everyday actions, to keep you accountable and teach you to focus on moving your CrossFit box the smartest way forward towards your big picture?

Like I said in part 1, you’ll need the notepad and calculator for this – but it’s hard to know what to fix when you don’t know what is broken.



P.S. If you want a proven system that addresses each of the key stepping stones in your business – then watch this space. In two weeks time we’ve got some big things happening with our Fundamentals program – this will really rock the socks off in your business. So stay tuned…

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