4 profitability metrics every dance school should know

The importance of analyzing your results

As the owner of a dance studio, you probably have a thousand things on your mind: managing class schedules, teachers' salaries, student enrollments, promoting the school... And, of course, dancing and creating new classes and choreographies to make your students happy.

With all these tasks to manage, have you ever stopped to think about how you can improve your school's profitability? Do you have time to analyze the results to make decisions? If the answer to these questions is NO, I think it's time to take a break and do a small analysis of your school.

At first, it may seem complicated and a bit boring, to be honest, to talk about profitability, rates, and costs. You might think this isn't for you, that your academy isn't that big, but this is really important and useful data that any business, no matter how small or big is, should consider if it wants to keep growing. 

So, we’re going to explain very simply the metrics that will help you have control and take the necessary actions to increase your income.

Student Conversion Rate

Most schools use trial classes to attract students or have a website or social media page for promotion. Have you ever thought about how many information requests you get, through different communications channels? How many have tried your classes? This rate simply helps you calculate the percentage of potential students who request information about the school, whether online or in person, or who take a trial class and finally become students. Just divide:

CR = total number of conversions / total number of requests

This means: the number of students you have gained, for example, in a quarter or a year, divided by the total number of requests you have had in the same period.

Having this data will let you know if everything is going great or if you need to work on attending and following up on requests. Maybe keep a better record, call a couple of days after the trial to see if they liked it, if they have questions, etc. This way, they will see that you care about your students.

CAC - Customer Acquisition Cost (or the cost of acquiring a new student)

This is about calculating how much it costs you to attract a new student, as in advertising expenses. This would include, for example, if you distribute flyers in your neighborhood to get known, publish an ad on social media, or organize an event or festival. You divide these expenses by the number of new students gained. It is important to analyze each type of advertising separately. To do this, ask each student how they found out about you to know if they came from social media, traditional advertising or participated in an event.

CAC = total advertising costs / new students gained

You will quickly know if your advertising campaigns are really effective or if you are wasting your time and money. Many times it works better the mouth of mouth recommendations from your students. Also, it works great collaborating with neighborhood businesses for mutual advertising, rather than spending a fortune on traditional advertising. But well-done advertising can give very good results. The important thing here is to have the data and be able to analyze what works for you.

CLV - Customer Lifetime Value (or the value of a student over time)

Do you know how much your students spend on your classes over the years they are at your studio? This is very useful data for calculating what income you can count on in the long term and making plans. But first, you need to know the average time a student attends your school.

Analyze this data well, also study which students generate the most income, and find out what they have in common to attract this type of student to your school.

A good management program can help you keep all this information up to date. This way, you will know how long your students have been with you, how many classes they usually attend. If it also has reports and statistics on the classes to know which ones work best, you can make informed decisions.

Dropout Rate or Student Cancellations

This is the proportion of students who stop attending your classes over a period, which you can calculate monthly, quarterly, annually, or over the school year. For example:

DR = Number of students lost during the year / Number of students we had at the beginning of the year

With this data, you can calculate student retention and take improvement measures if the percent is higher than you would like.

It’s normal that some students stop attending classes. More often cases are because they change residence, complications in their work schedules or the need to devote more time to their studies, affects attendance at dance classes, no matter how happy they are and want to continue at school.

The important thing is to know the reason, analyze it and take action on things that depend on you and can be improved. For example, if you find that your students have difficulty attending class due to their schedules, you can consider more flexible classes, create a new group at another time, or even complement your physical with online classes or video content they can watch later.

Take a step further: digitize your studio

As you have seen, running a successful academy requires dedication. It is important to rely on your team and have a management program or software that allows you to keep daily control of your academy. Choose one that meets all your needs and allows you to access it from any device with internet access. If it also has a mobile app for your students, it is a differentiating factor in your favor.