International Benchmarking and Financial KPI's Paul Kuebler, Co-Owner Master Franchisee- Eastern Europe/Russia
Course Summary & Objective o In this course, attendees will learn about Financial benchmarks and how they apply to clubs internationally. While this course will have some general KPI’s and benchmarking information, it will also focus on the indicators that we use internationally that seem to translate well from country to country and remove currency issues and differences due to having clubs in multiple jurisdictions. o Take-away’s Template for comparing several financial performance indicators and how use the template. How to compare KPI’s from club to club and over time.
Financial KPI’s & Benchmarking o Ways we benchmark- club vs. club; club vs. norms (GG and IRHSA); quarter vs. quarter, year vs. year o Why benchmark? o Choosing KPI’s o Areas to use KPI’s that are not financial o Frequency of Reporting of KPI’s o Examples used by our company
Accurate & consistent measurement Essential to be able to compare between periods or clubs Detailed description of KPI for financial people, check and recheck data until you are sure that they know how to compile information properly
Areas to use KPI’s o Membership Sales- MAL tracking stats, InTouch, results vs. monthly plan o EFT collection and retention stats; overall retention o Orientation, Intro-pack, and PT- conversion rate stats o Auxiliary sales- versus budget, vs. members, vs. prior year o Financial- versus budget, prior year- percent of sales o Employee performance- versus check list, versus objectives o Club inspections- versus checklist o Customer feedback- Medallia
Our KPI Dash Board Go to File Go to File Go to File Go to File
Financial KPI’s o Gross Income- % change from Prior Period (PP) o PT Net Revenue- % change PP; % of Gross Inc. o Marketing & Sales Expense- % change PP; % of Gross Inc o Payroll- % change PP; % of Gross Inc. o Occupancy Costs- % change PP; % of Gross Inc. o EBITDAR-(Earnings before Interest, Taxes, Deprec., Amort., and Rent) - % change PP; % of Gross Inc. o EBITDA- % change PP; % of Gross Inc. o Unit Sales-% change PP o Annual Attrition- percentage and % change from PP o Net Members- % change PP
Financial Benchmarking Financial Metrics Other Metrics Club trailing 12 monthsGross IncomePT Net RevenueMarketing & Sales ExpensePayrollOccupancy CostsEBITDAREBITDAUnit SalesAnnual AttritionNet Members Ending March 31, 2014% Change % of Gross Income% Change % of Gross Income% Change % of Gross Income% Change % of Gross Income% Change % of Gross Income% Change % of Gross Income% Change% Clubs CLUB A13.8%33.2%10.3%6.7%9.8%4.5%16.2%0.2%15.5%-1.1%39.9%-2.0%27.7%10.9%39.6%5.8%10.7% CLUB B13.2%-2.0%19.0%2.0%6.0%-2.6%17.0%-4.2%7.0%38.5%21.0%12.0% -13.1%49.0%1.7%-4.0% CLUB C3.5%4.2%13.3%9.0%4.0%10.0%11.6%26.2%20.7%12.0%27.4%-67.4%6.8%12.2%62.8%-2.5%9.9% CLUB D1.2%25.2%3.0%-12.0%15.0%-0.1%27.0%1.0%26.0%1.0%13.0%-2.0%17.4%1.1%52.6%3.3%0.6% AVERAGE7.9%15.2%11.4%1.4%8.7%3.0%18.0%5.8%17.3%12.6%25.3%-14.8%16.0%2.8%51.0%2.1%4.3% Doc
Financial KPI’s Definitions 1 of 2 o Gross Income(A) is the total revenue generated by your company from all sources within your 4 walls. This column is calculated as A from the current LTM (1 Feb- 31 March 2014) period divided by A from the prior LTM (1 Feb- 31 March 2013) period, so it is only the percentage change from the two years. o PT Net Revenue (B) is the total revenue generated from all forms of personal training, including small group training, less all direct costs, including payroll, associated with delivering the personal training. This allows a comparison of this metric between companies that hire and pay personal trainers as employees, and those who collect "rent" from personal trainers. This column is calculated as B from the current LTM period divided by B from the prior LTM period. o PT Net Rev Change: This column is calculated as B from the current LTM period divided by A from the current LTM period. o Marketing and Sales Expense (C) is the total of all direct and indirect costs, including advertising, marketing payroll, sales payroll, commissions and management, associated with generating Gross Income. This column is calculated as C from the current LTM period divided by C from the prior LTM period. o Marketing Change: This column is calculated as C from the current LTM period divided by A from the current LTM period. o Payroll (D) includes all payroll, other than payroll related to the delivery of personal training that was deducted in arriving at B, payroll paid to sales in C, and any head office payroll. This column is calculated as D from the current LTM period divided by D from the prior LTM period. o Payroll Change -This column is calculated as D from the current LTM period divided by A from the current LTM period. o Occupancy Costs (E) include rent, utilities and any other charges, such as CAM or taxes, that are passed through by a landlord under the lease. This column is calculated as E from the current LTM period divided by E from the prior LTM period. o Occupancy Costs Change This column is calculated as E from the current LTM period divided by A from the current LTM period.
Financial KPI’s Definitions 2 of 2 o EBITDAR (F) is earnings before interest, income-related taxes, depreciation, amortization and rent. It is a measure of operating income that attempts to exclude the effects of financing decisions, including the decision to rent or buy the space from which the business is operated. It also normalizes for the differing income tax levels of various locations. This column is calculated as F from the Current LTM period divided by F from the prior LTM period. o EBITDAR Change This column is calculated as F from the current LTM period divided by A from the current LTM period. o EBITDA (G) is earnings before interest, income-related taxes, depreciation and amortization. It is a measure of cash flow from the business in its current location, since rent is subtracted from EBITDAR to arrive at EBITDA. This column is calculated as G from the current LTM period divided by G from the prior LTM period. o EBITDA Change This column is calculated as G from the current LTM period divided by A from the current LTM period. o Unit Sales (Z) is the total number of non-short-term memberships sold by your company. This column is calculated as Z from the current LTM period divided by Z from the prior LTM period. o Annual Attrition % (H) is calculated as the total number of members who cancelled in the LTM, divided by the membership total at the beginning of the LTM period. Eg., a group with 100,000 members on 1 February 2013 that loses 40,000 members during the twelve months ended 31 March, 2014 would have Annual Attrition of 40%. Short-term memberships of three months or less should not be included in the membership balance or counted as cancelled members when they leave. o Annual Attrition Change This column is calculated as H% from the current LTM period divided by H% from the prior LTM period. o Net Members (J) is the change in the membership balance from the beginning of the LTM period to the end of the LTM period. Eg., a group with 100,000 members on 1 February 2013 that has 110,000 members on 31 March 2014 would have +10,000 Net Members. This column is calculated as J from the prior LTM period divided by J from the current LTM period. In this example, that would result in a Net Members % ∆ of 10%. Short-term memberships of three months or less should not be included in the membership balance or counted as cancelled members when they leave.
Membership KPI’s o Team and Individual o Leads, Referrals, WI’s, Calls, Appts., Shows, Sales o Calls/Op ratio- o Calls to Appointment ratio o Show ratio o Close ratio o Renewal % trailing twelve months. Membership Activity Log KPI's (In Touch) How did you do yesterday?2Sales (Membership & PT) Are you ready for today?3Appointments Are you ready for the week ahead?2Appointments (day 2-7) Do you have enough leads?84Added this week Membership Opps Added26Month to date Opportunities Added11309 Leads Added6187 Referrals Added468 Walk-Ins Added154 Calls Made26Month to date Total Calls1301,979 Calls to Not Visited Guest63%59% Calls to Missed Guest29%22% Calls to Members8%19% Calls to PT Leads0% Sales Appts26Month to date Sales Appt Added393 Sales Appts290 Guests for Memberships26Month to date Total Guests5181 Showed-Up Sales Appt169 New Walk-Ins154 Drop-In Guests358 Total Guest Sales176 Membership Sales Breakdown26Month to date Closing Percentage20%42% Total Membership Sales197 Leads159 Referrals036 Walk-Ins02 Make Sale26Month to date Referrals Added/Sale40.7 Orientations Booked5%7% Doc
EFT Billing KPI’s o New Sales vs. Budget o % Cancelled to EFT run o % Failed to EFT run o % increase on net EFT run o % Collected (after manual collection) to EFT run o Net rejections as percent of EFT run EFT (Direct Debit) KPI Tracking Jan/2014Feb/2014Mar/2014 Sale (heads) - budget46 Sale(heads)424741 Sale % to the budget91.30%102.17%89.13% Cancel (heads)121712 Cancel % to the EFT run1.40%1.91%1.31% Cancel % to the sale heads28.57%36.17%29.27% EFT Run Heads - total (sent to bank) 856 890 915 EFT Run Revenue - total 85,600 89,000 91,500 EFT Run Revenue - actual collected amounts 78,600 82,100 84,400 Rejected Heads from EFT Run 70 69 71 Returns / Rejected Revenue from EFT run 7,000 6,900 7,100 Returns / Rejections in EFT Run Revenue (%)8.18%7.75%7.76% Initial Fee Revenue Collected 7,350 8,225 7,175 Initial fee for 1 new sale 175 Manual collection - Recovered Revenue 3,000 3,500 3,700 Manual collection - Recovered Heads303537 Manual collection - revenue per head 100.00 Heads - rejected not recovered 40 34 Revenue - rejected not recovered 4,000 3,400 Lost (rejected not recovered) Heads in %4.67%3.82%3.72% Lost (rejected not recovered) Revenue in %4.67%3.82%3.72% 10 Month Anniversary Members (month by month) 50 33 49 TOTAL EFT Heads at end of month (input from MP Report) 890 920 949 TOTAL EFT Heads at end of the month (formula from table) 890 920 949 Total EFT members not in current month EFT Run 56 60 54 TOTAL EFT MEMBERS IN CURRENT MONTH RUN 856 890 915 Total EFT Run Revenue Collected for the Month (no initial fees) 81,6008560088100 Actual % collected from total sent to the bank95%96% TOTAL EFT Revenue Collected per Month 88,950 93,825 95,275 Not canceled in heads353739 Debt in Revenue (Not Writen Off)6,85080707490
New Member (MOB) KPI’s o % of Intro packs (IP) to new members sold- goal 30% o % of IP used-goal 80% o % of IP converted to PT client- goal 20% o % of orientations (free) booked (not IP clients)-goal 20% o % of orientations used-goal 50% o % of orientations converted to PT-goal 20% 2014 Intro Pack and Fitness Orientation KPI's JanuaryFebruaryMarchApril No. of New Members10583 No. of IP Sold in heads26 in percentage (goal 30%)24.76%31.33%#DIV/ No. of IP Used in heads2618 in percentage (goal 80%)100%69%#DIV/0! No. of IP Converted to PT in heads103 in percentage (goal 20%)38.46%11.54%#DIV/0! No. of Orientations Booked in heads in Intouch00 In Heads in IP Folder (sayd yes)03 Total in heads0300 in percentage (20%)0.00%3.61%#DIV/0! No. of Orientations Used in heads (w/out Intro Packs)02 in percentage (goal 50%) 67%#DIV/0! No. of Orient. Converted to PT in heads01 in percentage (goal 20%) 33.33%#DIV/0! Doc
Budget KPI’s o Actual versus budget o Actual versus PY o Actual versus forecast (revised budget) Doc
Employee Performance o Versus checklist o Versus Objectives o Annual reviews Doc
Customer Feedback - Medallia Doc o Benchmark against our clubs and all clubs o Take into account cultural biases o GM calls or emails all responses o Positively received by members
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