Episode 410
Apr 15, 2022
How do you keep track of who is coming back (and who isn’t)?
Listen to "E410: Measuring Client Retention" on Spreaker.
EPISODE 410
Weekly Roundup
Discussion Topic
- Measuring Client Retention- How do we calculate what portion of our clients are returning, and if it even matters? Math and thinking through the related factors!
- # of (active) clients at end - # of new clients / # of (active) clients at the start. That gives you the return rate.
- See the spreadsheet at massagebusinessblueprint.com/retention
Quick Tips
- File your taxes
Sponsors
Transcript:
Sponsor message:
(Silence) This episode is sponsored by Happyface. Face cradles can be super uncomfortable for a client and that pressure and stiffness can just ruin the whole massage experience. Happyface is the most comfy face cradle, so you can give the most relaxing massage of your client's life. They have an innovative heart shape design. That means no sinus pressure, no eye pressure, no need to adjust mid massage. That fidgeting goes away.
Allissa Haines:
Made in the USA, Happyface is seamless so it's easy to clean. It's got about the same dimensions as all the other face cradles, so this will fit just fine on your face cradle frame thingy. Happyface is designed to, again, be adaptable and fit on all of those frames. I went off notes there. Can you tell? It's got a whole Velcro surface. The entire back surface is Velcro, so it's going to stick where you put it on that frame. You can get 20% off the price of the product at massagebusinessblueprint.com/happyface. Use code Massage BB at checkout. But just go to massagebusiness blueprint.com/happyface, and all the details will be there. (Silence)
Michael Reynolds:
Hey, everyone. Welcome to the Massage Business Blueprint podcast, where we help you attract more clients, make more money and improve your quality of life. I'm Michael Reynolds.
Allissa Haines:
I'm Alissa Haines.
Michael Reynolds:
We're your host. Welcome to our show today. Welcome to episode 410. We're glad you are here. Quick note, before we get started, we have been broadcasting via Facebook live for a few episodes now, and we have upgraded our setup. And we are now also broadcasting live on YouTube and Twitter. So I realize that most of our audience likely hangs out on Facebook, but if you like YouTube better or Twitter better, or don't want to hang out on Facebook at all, you can find us on our YouTube channel, which is linked from our website. And we broadcast at the same time there, as well on YouTube. So that is at nine a.m. Eastern on Wednesday. So wanted to give that quick note that we've upgraded. So with that, hey, what's going on, Allissa?
Allissa Haines:
It's exciting times.
Michael Reynolds:
Exciting times.
Allissa Haines:
I just realized I probably should have logged into my Twitter so that I could share that we're live broadcasting, but I didn't do that in time so never mind.
Michael Reynolds:
Twitter, man. I like Twitter.
Allissa Haines:
Baby steps.
Michael Reynolds:
Everyone does.
Allissa Haines:
Baby steps.
Michael Reynolds:
And you can comment on YouTube and Twitter, as well. I actually don't know Twitter works, but you could definitely comment on the YouTube broadcast. So we'll see those comments coming through on YouTube as well, just like Facebook comments.
Allissa Haines:
I don't even remember the last time I logged on to YouTube. I know I might not be our ideal listener.
Michael Reynolds:
Well, there are people that love YouTube. They're on all the time. My son is one of them. He's on YouTube every day.
Allissa Haines:
Oh, my gosh. So, you want to hear what I've been reading?
Michael Reynolds:
I would love to hear what you've been reading.
Allissa Haines:
I have actually been listening to a podcast that's new to me and it's someone I discovered on TikTok actually, where I lurk. It is a woman named Alexandra Ellis and she has a podcast. It started, I think it's a video YouTube situation, but then she also does audio for podcast, The Body Nerd Show. And it's The Body Nerd Show podcast is what I've been listening to. And she is a personal trainer, mobility expert and has really good information. I like her because she's just very practical and gives very like, I'm going to meet you where you're at with your mobility and movement goals. And she's just got great resources.
Allissa Haines:
And I really enjoyed the episode last week or two about snoring. It was really interesting about strengthening certain muscles of the mouth and neck to help reduce snoring. And she had a phenomenal episode most recently, I think, that was with the physical therapist, that really talked about the whole ice versus heat thing. And it was just really well done. I think she's our people and I like the way she approaches clinical stuff and pathology questions and such. So, that is The Body Nerd podcast. Pardon me, The Body Nerd Show. And I'll put the link in the show notes and that is what I have to say about that.
Michael Reynolds:
Awesome. Thank you. Sounds like good stuff.
Allissa Haines:
What have you been reading and listening to?
Michael Reynolds:
I've been listening to a podcast episode from Hidden Brain called How Rude. I listened to this in the car recently when I was coming back from a longer drive. It was about an hour long episode, but it was really interesting. The title caught my eye or my ear, so to speak, I guess, because it was just the title is just How Rude. And it talked about, it kind of went into, I guess the science or the research behind rudeness and incivility. And how, first of all, we're not crazy if we've noticed that people are ruder now than they have been in the past. It seems like rudeness is becoming more common.
Michael Reynolds:
And what was more interesting to me is the way that we react, our brains react to being exposed to rudeness. And some of the ways that our brains react are, they went into some details about how our brains are less able to perform certain tasks or our cognitive abilities are actually suppressed when we are exposed to people that are being rude to other people or treating people badly. It causes us to function at a lower level. All sorts of interesting effects have been kind of aligned with this exposure to rudeness.
Michael Reynolds:
They even talked about the people in the medical profession, when they even exposed to a video of someone being rude to someone else, even for like a minute or two. They, in a patient care situation, they became less empathetic. They had less creativity in looking for solutions, just generally less effective in their jobs. And so just interesting. It was, from an intellectual standpoint, it was interesting to hear and also reinforced my thinking of avoiding rude people as a good thing. So, that was an interesting episode. I enjoyed that.
Allissa Haines:
And also just to recognize the physiology of that happening, I think is really helpful so that you know that when someone's been a jerk to you, if you have to immediately after enter a situation where you need to have some good intellectual maturity, emotional. What is it? Emotional intellectual, I don't know. So if you need to be ...
Michael Reynolds:
Emotional intelligence?
Allissa Haines:
Yes. If you need to be at your best self, then maybe if you've just had some rudeness or a conflict with someone, you need to take a minute to regroup. So you don't let that impact you. I'm a big fan of being aware of that kind of stuff.
Michael Reynolds:
Yeah, me too.
Allissa Haines:
That's neat. Thank you, Michael. I actually think I just took Hidden Brain off of my podcast feed because there's just been a handful of episodes in a row that I was like, man, not interested. And of course, then this interesting one comes up.
Michael Reynolds:
I'm the same way. I haven't listened to a lot. The last few have not looked very interesting. But what I do is I go to, maybe you do this too, but I keep them subscribed. I go to latest episodes as my feed and I kind of scan the title so that way, I'm not jumping into specific shows to see what's there back and forth. I'm just looking at all the latest episodes of my feed and kind of pull out what seems interesting. And that one did pop, caught my eye when it popped up.
Allissa Haines:
I actually just went and unsubscribed to a ton of podcasts just because I was like, I know I have not been listening to them. So let's stop pretending that I'm going to.
Michael Reynolds:
Yeah.
Allissa Haines:
So if anybody has some good new podcasts, I don't like crime stuff. But other than that, if you got one you love, I want to hear about it.
Michael Reynolds:
That's all my wife listened to is true crime podcasts.
Allissa Haines:
Really? You know, it's a thing, like suburban women really love it. I'm an anomaly because I get nightmares so easily. I can't handle it. The only crime one I liked was the one that was about the Elizabeth Stewart Gardner Museum. But I like that one because it was like a really wild, mysterious theft, but no one got really hurt. So I like that one. Also, I want to say good morning to Marcy and Alexander. Thank you for listening and popping into the chat. What's next, Michael?
Michael Reynolds:
Jojoba.
Allissa Haines:
Yay. Let's do a little talking about Jojoba because they have been a sponsor for so long and we appreciate them. You know that I feel like using a high quality massage product is super important because our hands are soaking in it for 20 plus hours a week. It's only going on the client for like an hour a week tops, but we were in it all the time. So you need to use something that's super high quality. And that, my friends, is Jojoba.
Allissa Haines:
They are the only company in the world that carries 100% pure first press quality Jojoba. And that means that they get a little less liquid out of the seed, but what they get is super high quality. It doesn't go rancid so you can have it on your shelf for a while, which is kind of great because you don't need to use very much and it does not contain triglycerides. So that's nice, and it makes it a nice carrier for essential oils because your carrier won't go rancid before the essential oil goes bad. That's nice.
Allissa Haines:
It's non-allergenic so you can safely use it on any client and every client without being concerned about a reaction. You, our friends, our listeners can get 20% off the price of the product when you shop through our link, massagebusinessblueprint.com/jojoba. And I will make note that they also have a simple salve and a lip balm now and they are awesome. I have both of them. That is massagebusinessblueprint.com/jojoba.
Michael Reynolds:
All right. Before we move on, let's go to comments here from Facebook and Marcy jumped in to say, Marcy agrees with you, Alyssa. She says, "Also not a fan of crime stuff or murder stuff."
Allissa Haines:
I appreciate that because I've worry a little bit about being a lightweight, whatever.
Michael Reynolds:
All right. So let's get started measuring client retention. As you take a sip of your ...
Allissa Haines:
Coffee. Caught me taking a sip. I didn't have enough time there. Yeah. So this is a question that came up in our premium community, in our mastermind community a couple weeks ago, asking how, what's the calculation. How do I measure? How do I know how many clients are coming back over and over again? And there's a calculation for it, and I'm going to share that with you. And then we're going to talk about, there's always a gray area and you know I love to talk about gray areas. So we'll talk about why you may or may not care.
Allissa Haines:
And also the factors you need to put into thinking through the metrics before you actually do the calculation. So in a nutshell, you look at how many clients you have at the beginning of a time period. And I will talk about how to count that in a minute. And then you look at how many clients you have had at the end of a specified time period. So let's say three months, and then you count in that three months, how many new clients you've taken, you've taken in for their first appointment.
Allissa Haines:
You take that number of active clients at the end, you minus, subtract the number of new clients. And then you divide by the number of active clients at the start. And that gives you a return rate. And I'll also put a link. I created a little Google spreadsheet calculator. We'll put a link in the show notes so you can, when you go in, you can copy that spreadsheet. You can make a copy, and then put your own numbers in if you choose to do so. So you know, math.
Allissa Haines:
So I made a spreadsheet, so you don't actually have to do too much of the math because it took me like 20 minutes of looking at the calculation to figure out how to actually make it work. Because, it's not what I do. I do money math, I don't do this kind of math. Anyhow, coming up with the number of active clients at the beginning in itself is a little bit of legwork. And this is super tricky with service businesses, right? Because what constitutes an active client? What constitutes a client or an active client? Is that someone who has booked with you a certain number of times over a certain time period? Is it anyone you've seen at least once in the last six months?
Allissa Haines:
What is your criteria for an active client, and only you can decide what makes sense for you. And then secondarily, what does success look like? Is it a 50% retention? Is it a 90% retention? This depends on you and your practice and the kind of work you do, and even your location. If you are some, if you're in a tourist location and a lot of your business is just one hit wonders while they're on vacation. If you do this math and you feel like, and you get 30% retention compared to somebody with a regular practice, who sees maintenance clients in the same location all the time, you're going to look like a failure. But you're not.
Allissa Haines:
It's just a completely different kind of business. So you need to think about your location, who you serve. Specifically, the kind of work you do. So that retention rate may not be relevant if you, again, are in a tourist location and you see a lot of people on vacation. Or if you tend to work on people who are in temporary situations like pregnancy or postop, like rehab stuff. Or if you see clients, who see you for a specific issue that has a resolution, like if you see someone for TMJD dysfunction and you have a 10 treatment protocol. And then they're usually good on their own and you just see them once every year or two, if they need a tune up. That's a totally different thing than a regular maintenance practice.
Allissa Haines:
And in that case, retention rate isn't really relevant. Your new client rate is relevant. The number of people who stay on a compliance plan, on a particular plan for massage, that is relevant. But your retention isn't, because the purpose of your practice is for people to come and then leave when they're no longer on vacation in your area or no longer pregnant, or no longer rehabbing after surgery. So, if you do care about this number, if you have a practice that's like mine and many others where I often see people initially for an acute issue. But then, that turns into maintenance care because I do a lot of anxiety and stress work.
Allissa Haines:
Or I might see someone because they have begun treatment for cancer or they're in treatment for cancer. And then once that is resolved, if they're in remission, they continue to see me just because they've learned that they like massage. All factors, scenarios like that. If you've got that kind of a practice, then retention could be a useful metric for you. So I would suggest that you go back like six months, I would say, or if you really want to focus your practice on people who come in at least once every two months or something, then go back three months.
Allissa Haines:
But for me, success, a retained client is a client who comes in at least twice a year. And I have some people who will only ever come in twice a year, and that's okay. I love seeing them. So I, for me, would go back six months. I would look at my calendar and I would make a list of every client I've seen over that six months and put a check mark next to their name for every return visit in that period. That can be useful information. If they have come back monthly-ish, or at least twice over that six months or whatever, I consider them an active client.
Allissa Haines:
Let me just scroll down in my notes here. My scrolling is going a little slow. So if I have classified them based on my personal criteria as an active client, they become part of that equation. And then you choose a time period and you say over three months, say January, February, March of this year. So I have the number of active clients. Let's say it was like 20. And then, you look at how many new clients you took in that three months and you ... If I took in, I should actually bring my spreadsheet up, and I apologize for not doing that. Things were a little wackadoodle at my house this morning.
Allissa Haines:
So then you look at how many new clients you had at the time period. You subtract it from the number of active clients. And then you do some division to figure out exactly how many, like what the percentage is of return. And Michael, have you done? I'm going to bring up my spreadsheet and actually do the math live. But Michael, have you done anything like this in any of your businesses?
Michael Reynolds:
Yeah. It's kind of an ROI calculation, return on investment as well, kind of a similar calculation. So, yeah. Yeah. So while you're paused here, what we might want to do if you want to is kind of just on the spot spontaneous here, we can make a shortcut that leads to your spreadsheet. So if you want to make it massagebusinessblueprint.com/retention, that'll redirect to your spreadsheet. Would you like to do that?
Allissa Haines:
Yeah, let's do that. And I'll ...
Michael Reynolds:
So give us like an hour at least after this broadcast, and then go check slash retention on our website. We'll redirect that to Allissa's spreadsheet.
Allissa Haines:
Exciting times, you guys know how much I love a spreadsheet. Okay. So if at, as of January 1st, I looked at the last six months of my business and I had 20 clients at the start. And at the end, I look at the last three months and I saw 50 different people. Woo hoo. And then, I looked at the last three months and the number of new people I had was 20. It was 20. So now I'm looking at 30 active clients who came back and there's a little formula where that you then divide that. And you get your number, which of course is not coming up. I need to copy it. I need to. So yeah, spreadsheets. Some, it's not going the way I expected it to this morning. I'm not going to lie.
Michael Reynolds:
Google spreadsheets, always there for you.
Allissa Haines:
My computer, I think because I'm broadcasting live, my computer is moving so slow. Yeah. And then it gave me a weird number, so I definitely screwed it up. So anyhow, that number. Let's say, let's have another example that's already done versus me trying to do new numbers live, which clearly has turned into a mistake. And this is why we shouldn't broadcast live because now, I can't really edit this out. So let's say at the start, I have 40 clients and at the end, I have 45 active clients. I've seen 45 clients over that time period.
Allissa Haines:
I look in the number of new clients I had in that three months is 14. That gives me a retention rate of 77%, which I feel is pretty good for my practice. Other people might be like, "No, I want really super regular people." So it's tough because I am not this kind of metric person. I do not. I run my business on numbers, but usually just money numbers and that, so I don't tend to run these kinds of numbers. However, when we get questions like this, we clearly try to answer them. So, that's that. So if you want to do the math, you can go to massagebusinessblueprint.com/retention. You're going to need to make a copy, so go to the file and make a copy of the spreadsheet and then run it on your own. Add your own numbers in there and see how it goes for you. And that is what I have to say about retention.
Michael Reynolds:
I like it. So question for you. Do you think it's valuable to track the trend? Like for example, let's say, one year you're tracking retention, the next year retention is higher. Do you like to see kind of an improvement in retention?
Allissa Haines:
I guess one would. And I think this is probably most useful. If you're in a situation where you're really trying to fill your schedule, it can help you. So if your retention is like 90%, but you're still not as busy as you want to be, then you know that you need new clients. Right? It's not just that you don't have enough return clients. Your clients are returning at an excellent rate. You just need more new ones. So you want to put your effort into getting new clients and all the activities that go along with that. And we've got 400 plus podcast episodes about that.
Allissa Haines:
If your retention rate is 20%, you definitely want to look and see what's going on. Are you getting a lot of one hit wonders off of gift certificate sales? Maybe you'll decide that's great. Maybe you need to work better on your retention efforts, which means if someone comes in for an appointment and they don't read a book right away, maybe you need to be sending them a followup email a week or two later that says, "Hope you're feeling great. Here's the link to rebook when you're ready to plan to come back." Maybe you are not, and this could be like looking at yourself. If you are not getting people coming back, is there something wrong with the massage you're giving?
Allissa Haines:
Is it, is the massage you're delivering not lining up with the massage you promise in all of your marketing? Or again, maybe there's just people who are only ever going to come once because they come because it's a gift or it's a luxury. So if you run a massage business, that's totally luxury and not based on people having a health issue that they want to help or maintain. Then there are people, luxury is going to come when people have the time and the money for it, which is great. But you just need to up your new client numbers so that you have enough new people coming in to still fill your schedule.
Allissa Haines:
So it is a good metric if your schedule's not full, because it can help you determine where to spend your marketing time on retention or on new clients. So I think in that way, it could be useful.
Michael Reynolds:
Yeah, I love that. That really brings it to life. I appreciate that. Cool, good stuff. Thank you for sharing that and ...
Allissa Haines:
And [Sakiam 00:22:07] is listening and made a note that AT&T is having outages all over the Northeastern ...
Michael Reynolds:
I was about to go comments.
Allissa Haines:
What? I can too sometimes.
Michael Reynolds:
Thanks, Taketa.
Allissa Haines:
Goodness. And so we are going to absolutely take that excuse for me not being able to get spreadsheets up fast enough to actually give better help during the episode.
Michael Reynolds:
Thanks, Alexander. Alexander also says, "This is a great topic. Thanks for all you both do for the LMT community." Thanks, Alexander. We appreciate you being here.
Allissa Haines:
Alexander just had a massage anniversary, a business anniversary. And I don't remember if it was 13 years or 18 years. I feel like it was something in the teens, but good job Alexander. See, I pay attention to our members and our people.
Michael Reynolds:
All right. So before we move on to quick tips, let's give a shout out to our friends at ABMP.
Allissa Haines:
Yay. ABMP. We appreciate them. Let's talk today about their education center. You can go to abp.com/learn. 600 hours, really more than 600 hours of CE courses, included with ABMP membership are available for purchase for non-members. And it is a ridiculously affordable price for non-members. Topics include hands on techniques, ethics, self care, cultural competency, and courses for massage educators themselves. ABMP members get free CE for all courses included with their level of membership. And it's a great way to meet CE requirements and also just try out new presenters. So you know who you want to spend your big live CE money on. And we've got some courses in there. We've got a total money management course. We've got a website course. We have a retirement fund course. We got some good stuff on there and you can check it all out at abmp.com/learn.
Michael Reynolds:
All right, quick tips. You got anything today?
Allissa Haines:
Yes. Yes I do. Except I can't find. No, I don't have one. You have one.
Michael Reynolds:
I do have one.
Allissa Haines:
You go.
Michael Reynolds:
Okay. So my quick tip is, it seems simple, but I'm going to expand on it. It's file your taxes because as of the record. As we're doing this live, it's April 13th. The audio podcast goes at April 15th. You've got until April 18th this year. So it may have seemed like a very simple thing. Like, hey, of course file your taxes. But I want to expand on this by saying I've seen in my work in my other life as a financial advisor, I see a lot of pain come from, not keeping up with taxes.
Michael Reynolds:
So if you're listening to this and you haven't filed your taxes, it's too late to find an account at this point, but get online with TurboTax. Get it done. Even if you don't get every possible deduction, it is preferable in my opinion, to just get it filed and get it done, then to hang around and delay and wait and get all sorts of penalties. And I've seen people, just their lives are just made so much more painful and complicated because they didn't keep up with taxes. They've got back taxes, things didn't get filed. Just keep up with it, get it done. You'll thank yourself later. If you get these taxes filed and out of the way, so file your taxes folks.
Allissa Haines:
Isn't there a free tax filing thing for people under like $75,000 a year ...
Michael Reynolds:
Yes.
Allissa Haines:
Through the IRS.
Michael Reynolds:
There is. I don't know where it is offhand, but it does exist. Yes.
Allissa Haines:
And people under a certain income, it's free tax filing software, and I think it's via the IRS.
Michael Reynolds:
Yeah.
Allissa Haines:
So if you cannot stomach giving your ... And there, you can actually use that software, I think, and just pay for the upgrade if you make more money than that. But if you cannot stomach giving your money to TurboTax, which is the same people as Intuit and QuickBooks, who have spent billions upon billions of dollars lobbying to not have tax codes simplified so that they can keep making their money with QuickBooks and TurboTax. If you cannot stomach giving them your money, then use the filer on the IRS website itself.
Michael Reynolds:
Yeah. I'm no fan of TurboTax ...
Allissa Haines:
I have feelings.
Michael Reynolds:
At all.
Allissa Haines:
Feelings about it, is what I have.
Michael Reynolds:
Oh, I'm no fan of TurboTax. It's not great. It's just kind of the only game in town besides the free version of IRS, to my knowledge. So yeah, the free version's probably better. I should have led with that. So go get the free version and get it done. And then, finally get accountant for next year.
Allissa Haines:
Word. And we got some recommendations if you need that. You can email us at podcast@massagebusinessblueprint.com. If you want to talk about taxes, tax prep or any the other massage business related question, we would love to hear it.
Michael Reynolds:
Right on. All right. Well, also with that, just a reminder, we're trying to get better at this to remind you that we have an online community, which is full of amazing super smart massage therapists like you. And we want you to be there too. So if you're not a member, check it out. It's called blueprintmastermind. It is, what is it now? $20 a month, ish. Yeah, $20 a month. How much should we charge for stuff? $20 a month. You get a 30 day free trial so you can join for free. If you don't like us, you can cancel. No questions asked, but most people do like us. They stick around and there's all sorts of great information you can find there. Office hours, peer mentoring, all sorts of great stuff.
Michael Reynolds:
Leslie just popped in to say hello and said, "Missed part of the episode but looking forward to the listen. Counted how many of my people this week are brand new, five, 16, five over 16. I'll see how many I keep." So Leslie is definitely looking at the retention numbers as well. Thanks, Leslie. Glad you stopped by. All right. Anything else you would add or are we good?
Allissa Haines:
No, I think that's it. Yeah. Just going to add that massagebusinessblueprint.com/retention redirect. So you can get to my spreadsheet. You can copy that and mess with it on your own. Good luck to you.
Michael Reynolds:
Love it. All right. Well, thanks everyone. Appreciate you being a listener. You can find us on the web at massagebusinessblueprint.com. And as always, thanks for joining us today. We'll see you next time.
Allissa Haines:
Bye. (Silence)