HCM Issue 5 2021

Page 50

INSIGHT

Building back will take diff erent tactics depending on location and business type

D As the industry enters a phase of regrowth following the loss of members during lockdown, it’s crucial to understand customer acquisition cost versus the lifetime value of each customer, as Paul Bedford and Jamie Owens explain 50

Issue 5 2021 ©Cybertrek 2021

espite losing between 20-50 per cent of members during multiple lockdowns, most operators have the same or less to spend on marketing than pre-COVID, so the industry needs to run leaner while still creating growth. Every gym in the UK is effectively a scaleup business at present, meaning operators need to grow without throwing money at the challenge. It’s vital to think about what information is important to a growth business – it’s not necessarily about more data, it’s about having access to the data that’s relevant to the challenges and opportunities your operation faces right now. Imagine you’re on Dragons’ Den assessing a business – what data points would matter most? The good news is you wouldn’t need to guess because there’s a standard set of metrics many investors use, called Unit Economics, that helps you understand a number of key things, such as how much it costs to win a new customer, how much you generate from that customer and how quickly your investment pays back.