Why Every Coach & Trainer Needs To Know Their Growth Levers

business coaches corner Jul 19, 2018

  

"Growth is never a result of mere chance; it is the result of forces working together" - James Cash Penny

 

The most important lesson we learned operating a successful athlete development facility was perhaps one of the most obvious ones:

To run your business, without knowing the numbers, is a recipe for inevitable disaster. 

 These numbers, which we call yout Growth Levers, are the four metrics that you must measure and control if you're ever going to feel like you're steering the ship. 

The alternative is easier, but it comes at a cost.

Without you at the helm of the ship, you are a puppet of nature and will blow in the wind.

And that frustration and uncertainty are at least some of the reason why you're here in the first place, right?

The reason we know the struggles of a small business is because we are one. 

Now, not by a lot of people's standards; but, we're certainly not big business, and we're definitely not so big that we've forgotten what it feels like to be a Personal Trainer or Strength Coach desperate to make an impact but completely at a loss as to where to start.

So we're he to tell you the first of many nuggets throughout our next year together: 

 

You start with the numbers.

 

So what are the four numbers you need to know in your business? And why only four?

Well, the answer is easy. These four numbers we're about to share with you represent the four numbers that have the ability to double, triple, or quadruple your profit.

They are the only four numbers that matter.

So what are they?

Well, before we do that, I need to teach you a formula. A simple, 7th-grade math formula consisting of straightforward multiplication. Here it is:


L x V x C x F = GP

 

Where L stands for LEADS;

V stands for VALUE;

C stands for CUSTOMERS;

F stands for FREQUENCY;

and GP stands for GROWTH POTENTIAL.

Leads x Customers x Value x Frequency = Growth Potential.

It's a simple formula with life-changing results, and here is why.

 

If you doubled just one of these numbers, you'd DOUBLE your growth potential. 

Imagine you earned a solid take-home income of $1000 per week; that's a pretty standard target for 1-4 year Personal Trainers. If you doubled one of those numbers, you'd jump straight to $2000 per week (assuming expenses didn't change, which is a fair assumption to make).

If you doubled just two of these metrics, you'd increase your revenue by 400%.

Taking the same example, you'd go from earning $1000 per week to $4000 per week.

And if you doubled three of those numbers, you'd increase your revenue by another order of magnitude to 800%.

That's pretty crazy.

What started at $1000 per week is now $8000 per week, or, about $400,000 per year.

But we can go one step further. Double all four, and you increase another order of magnitude, to 1600%, or 16x.

That's $1600 per week.

 

That is the power of the numbers, and this is why you need to know them. 

 

Now, let's get back down to reality. The likelihood of doubling all four of those numbers is near impossible, at least in the next year. 

But one of those? Two of those?

Sure, doable.

Definitely doable.

Even one would completely revolutionise how you feel about your business, right? I know that because I remember how that felt when we did the same in our business. 

We made the decision to make our sole focus to double our membership in three months, from a mere 60 members to 120 when we moved facilities. 

It doubled our revenue.

About a year later, we did it again. 

This time, we increased the value, by changing our membership prices to better reflect the facility we were providing. 

From $20 to $37 p/w, and we doubled our growth potential by 400%. 

We could predict the results because we knew our numbers. 

And it's time you do, too. 

To do this, we want to introduce you to something we call ALVC, short for:

Average Lifetime Value (of the) Customer

The ALVC, which you're about to do for your own business, takes into account these four metrics:

- Leads

- Customers

- Frequency Of Purchase

- Value (Margin/Profit)

 

Using the excel template we've provided, go ahead and fill out the template so you can find out how the numbers make an impact in your own business.

But before you ask, how do I improve this?

Slow down tiger, we've got 52 weeks together. But since you asked, here is a simple breakdown of what needs to happen for each metric to increase:

 

Leads:

You need a lead magnet that solves an immediate problem for your target audience and will help get you in front of them. This could be a workshop, a testing session, a low-cost entry product, or even a free online magnet (more on this in later lessons when we discuss client acquisition strategies).

 

Customers:

To get more customers, you need to make more sales and convert more leads to customers. You do this by improving the quality of leads you have to work with (part of improving your client acquisition strategy), and, having a strategy for sales focused on preeminence (more on this later, too).

 

Value: 

For most coaches and trainers, you trade your time for money. If you haven't considered increasing your value through offering add-on services like nutrition coaching, extra accountability (daily text messages), or heck, even offering to do assisted stretching for 20-minutes after your normal session, then these are all easy ways to add more value (the offerings that don't trade more time for money are preferred). 

 

Frequency: 

The last metric is frequency, which measures the number of purchases per year. Let's say your client buys 4 x 10-session packs per year, but you increased that to 8 per year because you mutually decided the second session a week would be in your best interests, you've essentially doubled the frequency of purchase. In our experience, having a rule of thumb that each client needs to see you at least 2 x per week for the first 10 weeks is one easy strategy (based on delivering the result), that will help boost this metric immediately. 

 

So now that you know the most important growth levers to measure and control in your business, it's time to do a quick diagnostic and see the current health of the business. 

If you'd like to download the templates that go with this blog, register for the FREE Fitness MBA by clicking the link below:

https://www.authoritytocoach.com/p/fitness-mba-course

 


 

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