Three Essential KPI for Managing Fitness Center Growth

By Aaron Eisberg

Do you remember the technique your parents used to track your growth every year? If they were like many families, they measured you and marked your height on a door frame. More likely than not, they knew you were growing, so why did they take this extra step? Because they were looking for more than awareness of your growth. They also wanted to be able to visualize it in a meaningful way. The same principle applies to key performance indicators (KPIs). By measuring and tracking certain values, your fitness center can determine how effectively you’re meeting your business objectives. 

But with so much data out there, how do you know which to track? Read on for a round-up of three top KPIs for managing fitness center growth, along with why they matter. 

1. Revenue per Client (RPC)

Revenue per client is one of the most commonly monitored KPIs in the fitness business, and with good reason. For starters, it offers a very clear picture of the number of clients you need to bring in the door to turn a profit. Ideally, this number will increase or at least remain relatively stable. If it is decreasing, however, it may indicate the onset of a troubling trend thereby allowing you to take corrective action before the problem escalates.

The best part? Determining RPC doesn’t require any complicated metrics or fancy calculations. Just divide your annual revenue by the number of members, and you’ve got a valuable KPI at your fingertips.

2. Client Retention Rates (CRR)

It can sometimes seem like running a fitness facility is about having the latest equipment or the trendiest equipment, but it’s actually about having something else. Members. Because, in simplest terms, you can’t run a successful fitness business without them. Says John McCarthy, Executive Director of the International Health, Racquet & Sportsclub Association (IHRSA), 

“Today, new members are not only harder to find, but they are also more expensive to acquire. As this trend progresses (and there will be no end to this trend), more and more clubs will be placing a greater emphasis on membership retention, i.e., on keeping members they already have.” 

According to IHRSA figures, the average CRR for fitness clubs hovers around 66 percent. How do you know if you’re falling short or shining in this area in order to either keep it up or adjust your course? Again, it’s all about KPI.

Which begs the question: How do you calculate retention? Club Industry breaks it down into the following formula:

Member Retention rate = ((ME-MN)/MS)) X 100

ME = number of members at end of period

MN = number of new members acquired during period

MS = number of members at start of period

Concludes Club Membership

The most important thing for club owners to understand is that taking a serious approach to member retention will help to avoid leaving a lot of growth on the table. Accurately measuring customer retention and implementing strategies, such as improved customer service through behavioral change techniques to retain members, can mean good things for the future of your club and the fitness industry as a whole.

Fitness center KPI

3. Revenue per Square Foot (RPSF)

According to the Association of Fitness Studios' “2015 Fitness Studio Operating & Financial Benchmarking Report,” only five percent of fitness studio owners track this KPI. So why does it make this list? Because it’s incredibly important and yet sorely overlooked. Another relatively simple calculation -- just divide your annual revenue by your facility square footage -- it can quickly tell you if you’re making the most of your space. If you’re not coming in above the $70 mark (the rough average for the industry), your space is not producing to its potential. 

And these are just three of our favorites. From average class attendance to revenue per session, there are near-endless ways to use fitness center KPIs to your advantage.  

Ultimately, running a fitness facility without tracking KPIs is a bit like navigating a ship while blindfolded. You may feel like everything’s going smoothly, but an iceberg may be lurking just under the surface ahead. Wouldn’t you like a map to chart the way? That’s exactly what you get when you harness the power of KPIs. For more useful fitness center advice and products aimed at supporting your fitness center membership goals, click here to learn more about the Accurofit System.

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