Retention Makes The World Go Round

Post by
Brian Schuring

We have a love-hate relationship with marketing funnels.  We love them because they help you focus on the drivers of success for your business.  We hate them because most people run them backward.

Your average funnel looks something like this:

  1. Awareness
  2. Interest & Evaluation
  3. Decision
  4. Action

A better one adds:

  1. Retention
  2. Referral

We’re all in on the components here, but the order tends to throw people off.  A LOT of yoga, pilates, barre and fitness studios and instructors spend too much time, money and effort on steps 1-4 here before addressing their real growth drivers: retention and referral.

If we were going to recut our focus-driven marketing funnel, it might look something like this:

  1. Retention
  2. Retention
  3. Retention
  4. Referral
  5. Everything Else

Now, that's admittedly an exaggeration, but there are elements of truth there and if we wanted to make this a little more realistic we’d draw the most efficient part of your marketing funnel like this.  

  1. Retention
  2. Referral
  3. Interest & Evaluation
  4. Decision
  5. Action
  6. Repeat

Why? Simple.  If your classes and your business aren’t turning new customers into happy, healthy, loyal, recurring clients who see real benefits from their investment with you, everything before Retention in the original funnels is like pouring water through a colander when you really need a bucket.  Without retention, all the time, focus, effort and money you spend at the top-of-the funnel on social media, direct outreach, ads, display posters, landing page optimization, and email marketing is going to pass right through your business and end up going down the drain.  The first noticeable symptom of this is that “swimming upstream” feeling of never having any spare time or energy because you’re spending so much of both finding new clients just to stay flat on class attendance or video views.

Why start with retention?  Three reasons: (i) it’s the best indicator you have about whether or not your services are being perceived the way you want them to be, (ii) it’s the highest margin part of your business and (iii) it drives most of the top of your funnel anyway.

Retention As A Value Check

You’re here because you teach great classes that people like.  If you weren’t you’d never have built a following and if you didn’t have a following you likely wouldn’t be (i) teaching classes on your own or (ii) running a studio.  So you’re used to people telling you how much they like your classes.  The tricky thing about that is that in-person feedback is asymmetrically positive.  People will generally tell you when they love a class.  They generally won’t when they don’t - they’ll just hope the next one is better and if it’s not they’ll eventually stop coming, which is where retention metrics come in.  Things like Weekly/Monthly Return Rate, Referral Rate and Length of Engagement help you understand exactly how your clients are voting with their time and their wallet regardless of what you’re hearing after class.  Ultimately, if these metrics are slipping for either the whole business or a new instructor within your studio, it suggests people may not be getting as much value out of their time with you as you think they are and it’s important to know why before trying to push more new clients through the door.

Retention As A Margin-Driver

In yoga, pilates and fitness businesses, your highest costs of client acquisition are up at the top of the funnel while the bulk of your revenue comes from the bottom.  It costs far less to retain an existing client than it does to win a new one and if you break revenue down in any month by clients who’ve signed up that month vs. clients who started the month with you then you’ll see that 80+% of your revenue is likely generated by clients you spent very little money “winning” that month.  Keep this in mind, both when issues pop up (we’re all human, they always do) and when you’d just like to show someone a little love.  It’s far less expensive to be generous with clients by giving away free classes or offering a refund than it is to try to buy a new loyal client.

Retention As A Funnel-Feeder

Most estimates of “targeted” marketing spend per month for studios and instructors range from 10% to 20% of gross revenue.  That’s a big number, especially when you compare it to the realities of most funnels, where 70-80+% of new clients generally come in through word of mouth.  Combining those two data points means businesses are spending 10-20% of revenue to get the 30% or less of their new clients each month that AREN’T coming through referrals.  That’s an expensive source.  Happier existing clients drive better retention which then drives better lead generation in the least costly part of  your funnel.  Why? Because your best, happiest, healthiest clients are walking billboards.  In the fitness, health and wellbeing space, your clients wear the positive changes you help them make on both the outside and the inside.  People around them notice and they’re usually happy to share what's working well for them because at the end of the day, we ALL want to look and feel our best.  Because of this virtuous cycle, the virality coefficient for good studios and instructors in this sector is through the roof and that makes a HUGE difference to both your current bottom line and the future of your business.

Final Thoughts

Whether you’re feeling like you’re always swimming upstream or your business is growing steadily, investing a little more time to optimize your retention drivers could be a huge win for you.   For help figuring out what metrics matter here (we’ve listed a few above), how to track them in your business and/or what next steps to take to improve those then, just reach out to us directly at or better yet hop on our next webinar and raise your question there so everyone can benefit from thinking through the issue together.

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