The term metrics refers to using a method of measuring something.
For massage therapists, metrics offer a pathway to growing a massage clientele and practice. Various aspects of a massage practice — cancellation rates, customer acquisition cost, cash flow and more — may be measured. This will help you get a better handle on your practice, see where your money is being spent, and figure out how to grow your client base.
If your measurement shows that a lot of clients are cancelling last-minute or are no-shows, for example, then you could consider implementing a cancellation policy to stop losing money with too many unexpected open appointment times.
The term scaling in business means to grow and expand — your clientele, your success and your income.
The Art of Metrics
One of the secrets to scaling a massage therapy private practice is the implementation of specific metrics to measure quality, quantity, efficiency, effectiveness and more — and there is an art to using metrics in order to scale your massage therapy private practice.
In addition, massage therapists need to find ways to optimize the time they spend with clients and the process of scheduling appointments. Technology has become a leading tool in efficiently supporting massage therapists to work smarter — not harder — from an operations perspective. This is an important aspect to consider in ensuring your practice runs smoothly.
Some essential metrics that you need to keep in mind above everything else include: the cancellation rate, customer acquisition cost, customer retention rate, customer satisfaction metrics, marketing referral metrics and cash flow. Understanding how to measure these unique metrics is extremely important if you want your growth strategy to be effective and efficient.
1. Cancellation rate metrics. It’s essential to measure your cancellations. This metric is one of the most important. You want to measure the cancellations based on anyone who cancels an appointment in less than 24 hours. It’s common that massage private practices can have cancellations upwards of 20 percent, which is lost revenue.
Your metrics need to include vacancy rates. The creation of a cancellation policy and charges for those who don’t show up to their appointments are always a good strategy. It’s also helpful to utilize a text reminder service that goes out 48 hours before an appointment.
A cancellation policy may seem harsh, but it’s the best way to ensure that your clients will make their appointments. Another option is to charge a fee only if they don’t reschedule.
2. Customer acquisition cost metrics. This metric is essential because you are measuring the cost for acquiring new clients. You should measure your marketing expenses compared to the number of clients received through that marketing expense to identify your customer acquisition cost metric.
3. Customer retention rate metrics. You should be able to measure how long a client stays on with you and how regularly the client receives services. Some massage private practices average an annual retention rate of 1 year per client, and some find their average is 1 visit. You can measure this metric in number of sessions or timeline, depending on the framework of your business model. If you do a monthly membership, then the metric you create will be based on time as a client. If you’re doing individual service hours, then you may base the metric on average number of visits per customer. The customer retention rate is a great metric to help you identify your marketing budget, as it tends to correspond with your customer acquisition cost.
4. Customer satisfaction metrics. Customer satisfaction directly impacts your retention rate metric. This can be captured by creating a survey that goes out after every visit. Give your clients an incentive to complete it by entering them into monthly drawings for a free massage. The survey should have a number scale that allows you to statistically rank their satisfaction in a myriad of ways — quality of the massage, scheduling, customer service, environment, etc. Another metric that should be calculated is keeping track of new patients per month and comparing them to your vacancy rates. If you see that those numbers aren’t looking good, consider looking into your productivity with each client and the client’s level of customer satisfaction.
5. Marketing referral metrics. Marketing referral metrics allow you to evaluate where your referrals are coming from. Are you getting referrals from physicians, networking groups, Chamber of Commerce, walk-ins who noticed your sign out front, and Google searches. The more you’re able to break down your marketing referral metrics, the easier it is to create a successful marketing budget measured on ROI, which directly relates to your customer acquisition cost metric.
6. Cash flow metrics. As the saying goes, “cash is king.” Although most massage private practices are cash-based programs, not everyone collects their payment in the most effective way. It’s essential to measure how much money is going in versus money going out on a regular basis. Breakdown of a cash analysis can be different than a profit and loss (P&L) statement if you’re running your P&L on an accrual basis.
Your ability to track your core metrics is going to have a direct impact on your consistency in maintaining a steady cash flow. Failing to look into this important aspect could prove to be very damaging to your massage private practice. Being adequately informed and prepared is your ticket to a successful, profitable practice with a healthy flow of patients who continue to come back as satisfied customers.
7. Your success GPS. As the need for massage therapists grows, seize the day and utilize metrics to manage accountability and motivation, and to provide a GPS for finding success.
About the Author:
Brandon Seigel is an internationally known business coach and president of Wellness Works Management Partners. He currently manages multiple private practices and consults with entrepreneurs and private practices throughout the world. A recognized leader in today’s private practice environment, he is a frequent keynote speaker and trainer for organizations, associations and universities. His new book, The Private Practice Survival Guide: A Journey to Unlock Your Freedom to Success (Rebel Press, February 5, 2019) covers the essential how-to questions of opening a successful private practice.