My business’ sales were stagnant from in 2023.
I’m disappointed because from 2020 to 2022 my business grew rather rapidly year after year. This did not happen in 2023.
I want my business to grow because:
I want to live a certain lifestyle that I can’t now
I have philanthropic desires
I want to accomplish something that I’m proud of
Seeing as sales were stagnant, I decided to look at where I went wrong.
My initial hypothesis was that I didn’t find enough customers to grow.
I was wrong. To my surprise, the biggest problem was (and continues to be) customer retention. I would have never guessed it because my business is driven primarily by repeat customers. However, upon a closer look at my financials I noticed something:
50% of people who purchase lessons from me do not make a second purchase
The statistic is 1.25 transactions/person to be exact, equating to 1-8 hours of classes per person depending on the transaction size.
Ouch. This means, roughly speaking, that half of my customers pay for classes once and then decide, “nah I don’t want to keep learning a language with the CLN.” Quite a few people clearly do not have a positive enough experience to stay for the long-term.
Here’s another area where I have room for growth.
The middle 25% of my customers take 3.5x more classes than the bottom 50%. However, even they only take on average 17 hours of class over 6 months or so.
Taking these two statistics into account, I’ve set a goal: try to get new students to take at least 24 hours of class in a calendar year.
There will be exceptions of course, such as:
A student only plans on taking lessons for the short-term
A student has an emergency come up and has to stop classes unexpectedly
But those would be exceptions, not the norm. If I had set and hit this goal last year, I’d have earned about 90% more in sales and profit.
Here’s what I am changing to be able to hit this goal.
I’ll keep the specific details to myself, but in a nutshell I am working on:
Improving my student onboarding procedure
Changing the copy of all marketing materials
Spending more time on ensuring student satisfaction
I want students to have a better experience at the Calgary Language Nerds which will, in turn, help my business grow.
I think your language school is awesome! As soon as my family concerns ease, I am back in for lessons!