5 Key Metrics to Measure and Improve Your Online Coaching Business

No matter what got your online coaching business started or how you define success, if that success depends on the value you create for others, you need a business plan. This plan acts like a map, letting you know when you are on track and when you may need to pivot slightly to stay in business and continue helping people reach their fitness goals. To navigate the marketplace effectively, you need data. More importantly, you need to track the same data that other businesses in your market space rely on to make their decisions. The right metrics will keep you on track with your business and help you identify key objectives for future growth and success in your online coaching business.

Here are 5 key metrics to measure and improve your online coaching business:

1. Customer Acquisition Cost

Your customer acquisition cost (CAC) tells you how much it costs to add a new customer to your roster. This metric is the first half of a cost-benefit analysis of your business. Calculate CAC by dividing total marketing and sales costs by new customers acquired during a specific period of time.

CAC = (Total Sales and Marketing Costs) / (Number of New Customers Acquired)

Improving the rate of new sign-ups or decreasing the amount you spend on marketing and sales can increase your CAC. If you set an improved CAC as your goal, note that efficiency—not just cutting spending—may be the best focus for your efforts. Widening your net by offering more services or price points may also improve your CAC.

CAC is a metric tied directly to your profitability. However, it also reflects how well you communicate with your potential client base through content marketing or social media. By tracking this metric, you can identify strengths and weaknesses in your marketing approaches.

2. Customer Lifetime Value

On the other side of the cost-benefit equation is how much money a person will likely spend with your online coaching business once they’ve signed up. This is the Customer Lifetime Value (CLV), which tells you how much revenue you have over time and how much you can expect from a given client. Being a predictive metric, the accuracy of your CLV improves the longer you are in business and the more clients you acquire. Calculate your CLV by multiplying the average purchase value customers make, the number of purchases, and the average customer lifespan):

CLV = (Average Purchase Value * Average Number of Purchases * Average Customer Lifespan)

CLV will be positively affected by how long your clients stay with you, making our next metric (”Churn Rate”) an important consideration. However, your CLV is also affected by promotions: a free month of coaching may improve your customer acquisition rate but will reduce your CLV by the lost monthly purchase.

There are several ways to improve CLV, from upselling clients and adding merchandise for purchase to providing incentives for customers to stay with you longer. But, consistently, your customers’ overall experience is the keystone to a strong CLV.

3. Churn Rate

Churn measures the percentage of customers who cancel subscriptions or stop using your service during a given time. The churn metric is tied to your customers’ experience. So, if you charge everyone on a monthly schedule, then track churn monthly. Calculate churn by dividing the number of customers who churn by the total number of customers at the beginning of the period.

Churn Rate = (Number of Churned Customers / Total Number of Customers at the Beginning of the Period) x 100

For any online coaching business, recurring payments and returning clients are likely your bread and butter. Churn will let you know how well your communication and systems encourage this essential part of your business.

Churn is closely linked to the next metric (”Net Promoter Score”), which will help you understand why customers leave. Your churn rate will also help you identify what kinds of people are more likely to leave. It’s important to address increases in your churn quickly. To lower your churn rate, you can try improving your customer service, adding new features or services, or offering incentives for clients to stay with you.

4. Net Promoter Score

The best marketing you can hope for is word of mouth. Happy customers tend to lead to more customers and the Net Promoter Score (NPS) helps you measure the likely hood that your customers will do this for you. NPS asks people a simple question: “How likely are you to recommend [your company] to friends, family, or others?” By asking them to rate their likelihood on a scale of 0 to 10, you can calculate this valuable metric.

People who rate their likelihood to recommend you to others at a 0 to 6 are detractors. Those at a 9 or 10 are promoters. Calculate your NPS score by subtracting the percentage of detractors from the percentage of promoters. The result can range from -100 (everyone is a detractor) to 100 (everyone is a promoter).

NPS = (% Promoters) – (% Detractors)

NPS is a loyalty metric. It measures the efficacy of your customer satisfaction efforts. It also tells you how well you are meeting your customers’ expectations. The basics of improving NPS are providing exceptional customer service, clear communication about your services, and implementing customer feedback.

5. Social Media Engagement

Social media is an indispensable part of any online business. Your social media presence lets people learn about you and extends your community beyond your existing customers. Tracking social media engagement lets you know not just how many people might be seeing your content but which ones are interested in what you offer. There are many ways to track your social media engagement—the number of likes, shares, comments, etc. Just be consistent.

By tracking these 5 key metrics, you can better navigate the ins and outs of an online coaching business, set measurable objectives, and make data-driven decisions. Keep in mind that metrics do not mean anything if you do not develop strategies to influence them. As you start tracking metrics, pay attention to how they change in response to your business efforts.