Sales Success Ratio

What it means:

The sales success ratio indicates the percentage of visits that result in club memberships. Therefore, it is a KPI that primarily measures the quality of our sales process, from the initial visit to the closing of the sale, including follow-ups if the sale is not closed on the first visit.

This is a crucial KPI as it measures the effectiveness of sales processes, affecting a vital moment: the acquisition of new clients. In a high-turnover sector like fitness, if the influx of new clients fails, it becomes very difficult for the club to grow or even maintain its membership numbers.

How it's calculated:

The formula for this KPI is very simple. It is calculated by dividing the total number of new memberships in a month by the total number of visits in the same month and then multiplying by 100 to convert it to a percentage.

This calculation gives us the overall success ratio for the entire sales team. However, it should also be measured individually for each salesperson to determine if everyone has a consistent performance level or if there are significant differences among them.

In practice, making an accurate measurement is more complex. Firstly, there must be a reliable system to record all visits requesting information about the club.

Another important aspect is defining what constitutes an informational visit. At FitnessKPI, we consider an informational visit to be only those individuals who physically present themselves at the club and thereby enter our defined sales process.

We do not consider informational visits to include requests for information via phone, email, or web. In these cases, the salesperson’s goal is to set an appointment for a club visit, and if the appointment is attended, it enters the sales process and is then considered a visit.

If the club allows direct sign-ups via the web, these web sign-ups should be excluded when calculating the success ratio if they do not involve a club visit.

For clubs with a high volume of web sign-ups, such as some low-cost clubs, it is advisable to calculate the success ratio separately for web processes and in-person processes.

This KPI can also be specifically measured according to the type of visit, for example, whether it involves former members returning, first-time members, or the source of the visit, such as spontaneous visits versus those generated proactively by a salesperson.

Finally, it is useful to measure the sales success ratio for first visits and subsequent visits, as this can help determine if a more aggressive sales approach is needed on the first visit.

Benchmark Values:

Based on data analyzed at FitnessKPI, we consider a club to have a good sales process when its sales success ratio is consistently above 75-80% each month.

Similarly, when evaluated individually for each salesperson, each one should have a ratio above 75%.

Values below 75% indicate that work is needed to improve this KPI.

How to Improve:

Often, clubs invest more and more in advertising when they see they are not reaching the desired number of new memberships. However, investing in advertising when the sales success ratio is low is a poor strategy and a waste of money, as it generates many visits that do not convert into clients.

When this KPI is low, it usually means that the club does not have a well-developed sales process and is not implementing the necessary sales techniques to convert visits into memberships.

In this case, the focus should be on building a sales process and training the entire sales team to implement it, and then establishing measurement and reinforcement systems to maintain the process over time.

Another reason this KPI may be low is if there is a large difference in the success ratio between different salespeople. For example, if one salesperson has a very high ratio but one or two have very low ratios, dragging down the overall average.

In these cases, it is necessary to work individually with the weaker salespeople and even have them observe processes with the best salespeople to acquire successful techniques that are being used.

Other reasons for a low KPI might include a club with a good sales process that still struggles to increase the sales success ratio. This could be due to an overly broad range of pricing options complicating the decision, or the club having high prices, poor-quality facilities, or a mismatched value-for-price ratio. The potential client might feel that the club or its price does not meet their expectations or possibilities and does not see the purchase as a smart choice, making it difficult to sell the club effectively.

Pablo Viñaspre
CEO & Co-Founder FitnessKPI
cross