In my article today I wanted to share with you a very simple equation that can help you understand how to unlock the growth in your swim school.
In a basic form, there are only 2 main variables that determine the success of your swim school.
1. Customer acquisition
2. Attrition (lost customers/churn)
What many people don’t realise is that you can complete some simple equations to help you understand your “hypothetical max enrolments” as well as your equilibrium point.
Lets look at some examples
Example 1
Customer acquisition = 30 new customers each month
Attrition/Churn = 5% per month
Based on these two variables we can calculate the hypothetical maximum enrolment that can be achieved.
We do this by dividing the number of new customers by the churn rate.
For example
30 new customers divided by .05 (5% attrition) = 600 enrolments
This would be our hypothetical max enrolment base.
This also tells us that we cannot improve our max enrolment unless we improve our customer acquisition OR our attrition rate.
For an established business, improving your customer acquisition can be hard. This is why retention and having a greater focus on improving it can be the biggest lever available to you to improve your businesses.
Lets explore another example and focus on the power of improving retention.
Example 2
Customer acquisition = 30 new customers each month.
Attrition/Churn = 2.5% per month
30 new customers divided by .025 (2.5% attrition) = 1200
This one improvement literally doubles our hypothetical max enrolment.
This is why we say that customer retention should be the Number 1 focus for any swim school.
We also recommend that you target an attrition rate of less than 2% per month.
It is also why we decided to make retention the number 1 focus of our swim school software, giving operators the tools to engage and retain their customers.
First Class software does not just cover scheduling and skill tracking, it includes tools and analytics that help you understand and improve your customer attrition.
If you’d like to know more about First Class go to www.firstclassretention.com or email info@memberretentionsystems.com to schedule a demo.