Coworking business is thriving now so many operators are looking for scaling opportunities. Some of them want to open new locations in a city where they’ve already succeeded, while others might think about opening locations in other states or countries. If you own a coworking business, you should make stable growth your main long-term goal, and there’s no business that could survive without constant development and clear objectives.
However, growth is always associated with certain challenges so there’s no surprise if your scaling efforts turn into a struggle. If you want to take control of your business and to clearly understand what you should do, you need to analyze the right Key Performance Indicators (KPIs). If you focus on the right KPIs, you’ll be able to understand how close you are to achieving your goals. KPIs enable you to objectively measure your efforts and your goals. This way, you’ll also understand what areas of your business need some improvement, and to set clear tasks for the people who are responsible for these areas.
Knowing and understanding your KPIs is great. However, the main thing is to actually derive value from numbers, turning them into actions. At some point, you may realize that some KPIs don’t perform their roles and don’t enable you to get closer to your business goals. This is a reason why you have to monitor your KPIs all the time and to re-evaluate their effectiveness. I decided to help you and prepared a list of key growth KPIs you should focus on if you want to scale your business.
Let’s say, you have a new location that is already set up so you can open it. As soon as it opens, you’ll need new customers, and getting new customers by itself is quite a challenge. You cannot just wait until people come to you. What you need is a solid strategy that will enable you to plan your efforts. What is even more important, however, is having the right metrics that can help you understand if your strategy is successful, needs some improvement, or should be completely replaced with another approach.
KPIs are necessary if you want to measure the success of your strategy and to determine its strengths and weaknesses. You should be able to analyze the success of your member acquisition process at every step, so you need to analyze KPIs that target each and every aspect of the strategy.
Such KPIs as your website traffic, interactions with your Google Business profile, the number of new members, and the number of tours booked, reflect whether or not you succeed in a particular aspect of your member acquisition efforts.
Many businesses, from software startups to retail eCommerce stores, only exist online. However, even brick-and-mortar businesses like coworking spaces need to build a strong online presence because this is what modern customers expect from any legit business. Given that people spend a lot of time online, the success of your website to a certain extent reflects your position in the market.
When people visit your website, you get an opportunity to get high-quality leads. Website traffic is one of the key metrics you should consider, and it’s especially important if you open a new location and it just begins to work. You can easily track your website traffic using different tools, including Google Webmasters and Google Analytics. If marketing is not your strong point, you can turn to companies that offer digital marketing services. They will help you form a strategy that will attract more customers to your site and engage with your content.
The number of new members is one of the key factors that impact your revenue. When people sign up, they not only boost your sales but also impact your current community in different ways. Therefore, you should be able to evaluate not only the financial aspect of your growth strategy but also its cultural outcome. Monthly new members can help you see how close you are to your financial goals and analyze any relevant details about these members.
Members and leads in the coworking business have certain qualities. Hard leads are people who sign up or take a tour. However, there are also many soft leads who are interested in your business but they cannot make their decision quickly so they need some time.
For instance, people may react to your post on social media and send you a direct message. However, they won’t book a tour immediately. In this case, you can use various marketing tools and inform them about the benefits of your business to help them take action.
There are many tactics that can help you attract new members so that your business can grow. However, the number of new members isn’t the only important metric you should track. Not all people who join your community are going to stay. Many of them will leave sooner or later, and you should also keep track of such members. When people leave, it’s called member churn
Member churn has a significant impact on your growth, and you should look for any opportunities to minimize it. Your coworking business shouldn’t be a revolving door, and if you want to maintain growth, you should quickly replace members who leave with new ones. Your member churn KPI can help you better understand what slows down your business and what are the most common reasons why people choose to leave.
The occupancy rate reflects how much space in square feet is occupied by your members every month. Usually, this KPI is expressed as a percentage. For instance, you may have 30% of the overall floor space occupied. This metric will help you properly evaluate your profits.
You can also consider your occupancy rate by a workstation. This KPI is calculated similarly to the regular occupancy rate. However, this metric shows the number of workstations occupied divided by the number of workstations available. This way, you can get a percentage that reflects how your workstations are filled.
No matter what kind of business you own, retaining the existing customers always costs less than acquiring new ones. Your retention rate reflects the number of members who leave every month.
Member churn is different from the retention rate because it reflects the percentage of members who left. If you divide the number of such members by the number for the beginning of the month, you’ll get your member churn. To get a retention rate, you should deduct that percentage from 1.
Another important figure is your average member’s lifespan. This figure can help you evaluate the lifetime value of your customers so that you can better understand how you get your revenue.
To calculate the average member’s lifespan, you should consider the number of years all of your members use your coworking spaces and then divide this number by the number of customers. However, the chances are that you don’t have enough time to wait. In this case, you can calculate the member lifespan by dividing 1 by your churn rate.
If you want to scale your business, you won’t be able to do it if you don’t analyze your customers’ feedback. You should know what people think of their customer experience to understand what areas of your business need to be improved.
Understanding your customers’ experience is a priceless skill in such a competitive business as coworking. Feedback will help you not only fix some issues that make you lose customers but also tailor your offerings to your customers’ needs and preferences.
I also recommend that you measure revenue per member. You should understand what revenue you get from each member because you need to spend acquisition costs upfront. Thanks to this data, you’ll be able to understand how soon you’ll get a positive return on investment.
Once you’ve sealed the deal, you cannot just relax. You need to start working on ensuring a high level of customer satisfaction. However, measuring customer satisfaction can be a great challenge.
Fortunately, you can evaluate your customers’ satisfaction by considering numerous factors. For example, if people are satisfied, they are likely to buy additional services, or they might want to upgrade their membership plans. If you track the average revenue per customer, you’ll be able to evaluate the quality of your customers’ experience, which in term can help you improve your services.
Coworking spaces are in great demand so there’s no surprise that many people who own a coworking business are looking for scaling opportunities. However, if you want to open a new location, you should be able to set clear goals and objectively evaluate your success.
It’s impossible to come up with an effective development strategy if you don’t analyze the right metrics. There are many important KPIs that can help you understand what areas of your business require some improvement and to see how much money, time, and effort you need to invest in a particular aspect of your business to achieve your goals. I hope that this guide will help you focus on the right KPIs, set clear goals, and achieve them.
The article was written by Rhonda Martinez, a marketer, educator, blogger and copywriter. She writes content for LegitWritingServices, a review site and education blog and helps students achieve academic success. Other than that, Rhonda is passionate about marketing communication and entrepreneurship.