Running a successful business means more than just working hard—it requires knowing your numbers inside and out. These numbers act as the heartbeat of your business, giving you the insights to understand if you’re thriving, breaking even, or losing ground. In this blog, we’ll cover the essential metrics every business owner should know and how to use them to make smarter decisions. Let’s dive in!
1. Average customer lifespan
This is the average length of time someone stays a customer in your business. Think of it as how long, on average, a client continues paying for your service or product before moving on.
At MyStudio, we’ve worked with over 2,000 martial arts studios and found that students, on average, stay enrolled for 9 months. That’s a crucial number. It tells studio owners how long they can expect revenue from a typical customer.
For example, if your studio charges $100 per month, a student staying for 9 months will generate $900 in revenue. This number—$900—is your customer lifetime value (LTV).
2. Customer lifetime value (LTV)
Your LTV is the total revenue a single customer brings during their time with you. Knowing this helps you decide how much you can afford to spend to bring in new customers while staying profitable.
Here’s where the 30% rule comes into play:
You should aim to spend no more than 30% of the LTV to acquire a new customer. For a $900 LTV, that means your customer acquisition cost (CAC) should be $300 or less.
3. Customer acquisition cost (CAC)
Your CAC is the cost of bringing in a new customer. This includes things like marketing expenses, ads, and sales.
Let’s break this down with an example:
A marketing agency promises to deliver 10 leads for $1,000. At first, that sounds great—$100 per lead. But here’s the catch: not all leads convert to paying customers.
If your conversion rate is 20%, it means only 2 out of 10 leads become paying customers. Now, divide the total cost ($1,000) by those 2 paying customers, and your actual CAC is $500 per customer.
At $500, your CAC is higher than your $300 budget (based on the 30% rule), meaning you’re losing money with every new customer. Worse, you’re also wasting time and energy nurturing leads that don’t pay off.
4. Net profit
Your net profit is the money left over after paying all your expenses, including rent, payroll, insurance, and software. A healthy business should aim for 20% net profit.
If your total revenue is $100,000 per year, your goal should be to walk away with at least $20,000 in profit after all expenses. The remaining 80% will cover operating costs, including:
- Rent
- Payroll
- Insurance
- Equipment
- Software
With MyStudio, tracking these numbers is simple. You can easily see your revenue, expenses, and profit margins at a glance, making it easier to stay on track toward your goals.
Actionable data makes all the difference
Running a business is hard work, and you want to know that your effort is paying off. That’s where actionable data becomes your most valuable tool. Understanding and tracking key metrics—like average customer lifespan, lifetime value (LTV), and customer acquisition cost (CAC)—empowers you to make smarter decisions.
For example, at MyStudio, we know the average time a student stays enrolled is 9 months. This data helps studio owners optimize marketing strategies, avoid overspending on customer acquisition, and confidently grow their businesses.
The MyStudio platform is built to make these insights easy to access. Whether you’re tracking the length of your average user or calculating LTV and CAC, the software provides real-time tools to evaluate your business’s performance. This clarity ensures you can focus less on guesswork and more on building a business that thrives.
By taking the time to understand and apply these metrics, you’re not just running a business—you’re creating a sustainable, profitable venture that rewards your hard work. MyStudio is here to help you every step of the way, giving you the confidence to make decisions that drive success.
Take the next step
This is just a brief glimpse into how powerful the leading martial arts software, MyStudio, can be. If you truly want to set your business up for success and see how MyStudio can help you unlock your potential, we’d love to connect with you.
Schedule a demo today to see how our platform can transform your business.
Start making smarter decisions, boosting your profits, and achieving your goals with MyStudio by your side. Let’s make success happen!
