Hey there, Matt here! When we first opened Studio Coworking, my idea of a successful space was related to figures, scalability, and brand building. But once we started noticing the importance of Studio for our members, my perception of success switched. Now I firmly believe in measuring our brand's growth based on our coworkers' success. This doesn't mean neglecting your own parameters. In fact, the more you grow, the more value you can add to your members.
Since I started Strategic Studio, I always enjoyed helping coworking owners and managers boost their brands and leverage impact. And I noticed that most entrepreneurs in this market shared the idea that their brand's success was attached to the value they add to their coworkers. To support this vision, in most cases, our work has been not only developing their strategies but also helping them focus on their objectives and define the main KPIs to be tracked.
And even when most of the spaces were doing incredibly great, in many cases they had no systems in place to measure profitability. Sometimes choosing what metrics to follow can be overwhelming. There is a KPI for almost any factor you want to measure. And it can be tempting to add as many as possible for your team to handle.
But when talking about performance indicators, the simpler, the better. It will be more efficient to have a limited number of clear parameters to measure than trying to keep your eyes on an endless and complex spreadsheet.
But, what are the most important KPIs to track in my coworking business? We developed a smart worksheet to help our clients keep track of their numbers. And in order to keep it as concise as possible, we made a detailed analysis of the most crucial key performance indicators (KPI) a coworking manager needs to track: Customer Retention Rate (CRR) Any company that wants to succeed must keep a close eye on customer retention metrics., The CRR measures the percentage of existing customers who remain customers after a given period. Here is how you calculate it: Find out how many customers you have at the end of a given period (week, month, or quarter). Subtract the number of new customers you have acquired over that time. Divide by the number of customers you had at the beginning of that period. Finally, multiply that by 100. Customer Acquisition Cost (CAC) How much does it cost to acquire a new customer? In order to know that, simply divide all your sales and marketing expenditures by the number of new customers acquired in a certain period (we have quarterly goals, but measure month by month). Upsuite's blog has an interesting post regarding how coworking spaces can reduce customer acquisition costs. Customer Lifetime Value (LTV) How much do your clients worth? LTV is the total worth of a customer over the entire period of your relationship with them. It is an important metric, as it costs less to keep existing customers than to acquire new ones. So, increasing the value of your existing customers is a great way to drive growth. The simplest way to calculate LTV is simply by multiplying your customer value by its average lifespan.
LTV - CAC ratio The LTV/CAC ratio compares the value of a customer over their lifetime to the cost of acquiring them. If your business' ratio is under 1.0, this means you are losing value. A ratio over 3.0 is considered healthy. Desks Occupancy Rate (DOR) Does not require much explanation: The number of occupied desks / total desks. Offices Occupancy Rate (OOR) The number of occupied offices / total offices. Meeting Room Occupancy Rate (MOR) This one gets a little trickier, and it depends on how you want to measure. We use to calculate the rate for each office and then make an average.The basic formula is: Average occupied hours / total available hours = MOR And then, MOR of meeting room 1 + MOR of meeting room 2 + ... / number of meeting rooms. Keeping track of these KPIs will enable you better diagnose your business' health, leading to more efficient planning. As mentioned before, we (and our clients) use to update our smart worksheet every month. This enables us to adjust our commercial actions in order to achieve our quarterly goals. Interested in getting free access to our Coworking Smart Objectives Worksheet? Just reach us out! I hope our content helps you and your team boost your brand! Cheers, Matt
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