It’s difficult to suggest generic guidelines for retention. For one thing, your retention rate (or retention percentage) will surely vary between your programs. Martial Arts will tend to be stronger than general Fitness, and special programs such as Kickboxing or Boxing, can go either way.
I’ll give you a general answer, having worked with thousands of Martial Arts business clients throughout the past 25 years and managed their billing. An average “annual” monthly drop-out rate – one that you could use as a benchmark for your Martial Arts program – is about 20-30%. In other words, a 70-80% retention rate is typical.
When comparing your retention percentage to those of your peers, be aware that factors you cannot control, such as customer demographics, can influence your results. But, don’t focus on your peers. Your goal should always be to improve your retention no matter what it is. What you can control is your service delivery quality – you can make sure you are delivering what your members want. This will create the strongest member retention in your school.
I suggest determining your retention percentage for each of your programs. This will allow you to assess each program in your business and make changes where they’re needed most.
Before you get started, I want to make sure you have a consistent way to measure retention so you can track it. Then, you can set goals and make strategic changes in your business to attempt to influence your number upward.
Timing is Everything
To calculate retention, you first have to determine what timeframe you want to use. In the above example, I used one year. This variable is important and must be consistent for all future calculations.
Consider the retention rate on members the day after you sign them up; retention should be very close to 100%. However, after five years, retention may be very close to 0%. If your duration periods are not the same, you could be comparing apples and oranges.
What timeframe should you use? The most popular is 12 months but I like to use 18 months for Martial Arts and 12 months for Fitness. Whatever you decide, just keep your time period the same when comparing for the future.
How to Calculate Retention
Take your timeframe – let’s use 12 months – and count how many new members you enrolled 12 months ago. If you signed 10 new members and seven are still attending today (12 months later), your retention is 70%. It’s important to use attending versus paying members in your calculation. Members who are paying but not attending are still lost members.
New Martial Arts Members Signed 12 Months Ago: 10
Martial Arts Members Active This Month: 7
7 Active Members ÷ 10 New Members = 70% Retention for Your Martial Arts Program
Tracking Retention to Improve Your Business
This is only a one-month retention analysis. To acquire a more accurate retention value for your programs, you will want to have at least six months of data. If you keep good records (sales and attendance), you can go back and perform the same calculation for each of the past six months or longer. I recommend keeping an ongoing tally in a spreadsheet. Just remember, you are always comparing the active members you have this month against the sales you made 12 months ago.
Another benefit of maintaining a spreadsheet, you will also be able to monitor the time periods when you frequently lose members. If your retention average is 85% but the above example (70%) seems to occur every April, you can research why and implement a strategy. Let’s say the drop in retention is a result of students participating in other sports. Maybe you can implement an “Excel in Sports” program where you emphasize the benefits of Martial Arts training to athletes. You could also vary attendance requirements during the sports season to accommodate students’ schedules.