| Friend,
Attrition.
A.K.A., your "drop out rate."
A lot of you don't track it. You think you do, but you really don't.
It amuses me to no end when I accept a new coaching client and make an observation like, "Okay, so you've been open a year and you're still at 40 students..."
And then I say, "How many leads, on average, do you get a month?"
Let's say the new client says 20, just for grins. Then I'll ask, "And how many new students do you enroll each month?"
Again, for grins let's imagine they say 12. "Great," I'll say. "So what's your attrition rate?"
Typically this results in a dead silence. So I'll elaborate. "What I mean to say is, how many or your students drop out each month?"
Now here comes the amusing part. They'll typically respond with, "Oh, my students NEVER drop out!"
Insert laugh track here. :)
The Sad Reality
The thing is, I already know the answer. These schools are losing students like Obama loses staring contests with Putin... on a daily basis.
And I know this because there's no way a school can any significant amount of new students every single month, and never lose a single student, and still not grow past 40 or 50 students in a year.
It's simple, obvious math... but again, in the rose-colored world inside our heads we tend to remember things exactly how they didn't happen.
Why It's So Very Important To Track Your Attrition
Now, here's the crazy thing, and the reason why you not only need to track your attrition rate, you also need to watch it like a hawk...
...because if it starts slipping higher and higher, at a certain threshold your school will stall out, and beyond that it'll begin to falter.
I'm going to illustrate this in hard numbers, so you can see the devastating effects of high attrition on your school's growth.
Note that these numbers are based on a Small Dojo Big Profits school doing everything else right - marketing, sales, etc - so they're enrolling an average of 12 new students a month (some months it will be higher, and some lower, but this is averaged over the course of 12 months).
12 new students a month is actually the minimum threshold that I like to see my coaching clients attain and maintain, so that's the number we're working with here.
The Stalling Out Point...
Here's your stall out point... 23% attrition. Now, you may think that no one has 23% attrition, but you'd be wrong. I've seen it happen in schools time and again.
Someone starts a part-time class, gets to about 40 students, realizes they are making enough money to get their own place, and then after they move to a full-time location they never grow past 40 or 50 students... even though they are getting 10 or more new students walking in the door to try out classes every month.
The Bare Minimum...
But let's look at this more realistically. At 10% attrition, a school that starts the year with just 40 students and that enrolls 12 new students a month for a year will be at just under 90 students.
Now, I know for a lot of you, that would be a dream. But hang on, because I want you to see what you can accomplish by really working on your student retention.
Where Most Successful Schools Hover...
At 5% attrition (which is where most successful martial art schools hover), at the end of 12 months that same school would be at just over 125 students.
At $149 a month, that's a difference of $5,600 a month in tuition. I don't know about you, but I can do a lot with an extra $5,600 a month.
Where Top Achievers Reside...
And at 3% attrition (which is kind of the holy grail, but doable), that same school would be sitting at around 145-150 students.
At $149 a month per student, that's a difference of $8,600 a month in revenue!
Let that sink in for a minute.
A Quick Look At What's Possible...
But here's the really crazy thing I want you to think about, especially if you've been limping along in your school, trying to break the 50 student mark...
By getting your marketing systems up and running like they should, and by getting your sales systems hitting on all eight cylinders, you could easily be enrolling an average of 12 students a month (I've seen my coaching clients do it time and again).
And if you started the year off at just 40 students, by this time next year your school could grow to - - 90 students...
- 125 students...
- or even 150 students or more!
That's the power of having solid retention strategies and systems in place. And, it's typically the missing piece of the puzzle that keeps most martial arts school owners from grabbing the brass ring.
So, track your attrition, and watch it like a hawk. It WILL make a huge difference in how fast your school grows and in how high your revenues will go as well.
Enjoy your weekend, and start tracking that attrition!
Until next time,
Mike Massie MartialArtsBusinessDaily.com
P.S. - If you need retention strategies and systems, start with the info in Small Dojo Big Profits. Once you've implemented those strategies, then you should read The Profit-Boosting Principles so you can implement the retention strategies in that book as well. | 