In the fitness world, you need to constantly improve two things:
Keeping all of your clients each month is what retention is at its core. Let’s look at what retention is and then talk about how you can calculate it monthly and annually so that you can decide how you’ll track this critical metric moving forward.
Before we move forward, though, I’ll use the term “clients” in these articles. Please note that clients can mean:
Any person who is paying you money to do fitness or health and wellness is exactly who I want you to keep more of in your coaching business (heck, if you run any business that intends to retain your customers, this article series will help you)
The other two articles in this series for your reference are:
Ok, let’s press on!
(Resource: Coaches are only as successful as their business skills. Get an introduction to the most important business skills for your coaching career here.)
Simply stated, retention is a number that we believe needs to be calculated at the monthly and then the annual level.
We will look at the “churn” number first and then turn that churn into your retention number immediately after:
Whether you look at monthly or annually, the concept of churn and retention is still the same. Your churn is what you lose, and your retention is what you kept.
Retention math should be pretty easy once you begin practicing it.
Your monthly retention rate is one minus monthly churn rate.
Monthly Churn =
Something worth noting here is that you would not add in the number of new clients who began with you that month as part of that month’s retention number. You would add those clients into any subsequent months, though.
I like to look at annual churn rate in a few ways because I think each way teaches me something a bit different and helpful.
This version of annual retention math looks at an ongoing client count vs the number of people who leave. The reason why this is interesting is because if you are putting new clients into your gym, you are factoring in that increase in client count as part of your math.
Annual Retention (v1) =
The easiest way for me to explain this is through an example:
Churn = 60 clients lost / 110 total clients who “touched” your gym = 55% churn
Retention = 1 – 60% churn = 45% retention for the year
If you’ve not looked at longer-term retention much before, this may look daunting to see a churn percentage that high. I’m telling you that your retention is sub 50%, but you still have the same number of clients you did to begin the year. It doesn’t feel as bad when you look at your net client count as 100% of your previous client count, but you must take into account how many people are leaving your gym throughout the year.
This example is the same exact idea as your monthly math except it lengthens the time frame from 1 month to 12 months (we’ll discuss rolling averages below).
Annual Retention (v2) =
Let’s use the same exact example from above:
Churn = 30 clients lost / 50 beginning clients = 60% churn
Retention = 1 – 60% churn = 40% retention for the year
Why do both percentages in the first place?
It’s a different perspective for the business, and it really shows you how effectively you’re growing and retaining your clients. To not go into spreadsheet math here, here is the difference between the 2 calculations:
It’s one thing to look at 1 singular retention statistic, but as with most metrics, it’s very important to have context on where you were, where you are, and what the difference between the two is – i.e., the trend.
There are two nice ways to look at the trends of your retention:
What you’re after in either case is to learn how you are doing in the longer-run, the trend. You want to see if your efforts to improve your retention (if you have concerted efforts) are working or not. Those calculations and graphs are extremely helpful to learn that.
Hopefully, you have a great sense of what retention is and how to calculate it. If you have any questions, just comment below or send us a social media message, and we’re happy to clarify.
If you feel comfortable here and you want to read about “what impacts your retention rate” so that you can continue to grow your gym, click here.
Learn how to improve your retention rate in this free Professional Coaching Blueprint.