Customer retention is arguably the most important metric when it comes to swim school success.
When your attrition rates are too high, it becomes difficult to maintain profitability.
You may ask the question, what is an acceptable retention rate? What is good?
To help answer that question we took a deep dive into de-identified cancellation data from our software userbase.
First Class software is a swim school software that’s used in 9 counties.
Founded in Australia, by the company Member Retention Systems, First Class has a strong focus on enabling swim schools to enhance their customer retention.
About the data
Cancellation data was taken from term 1 2024, a period from late January to mid-April.
The size of swim schools analysed ranged from 220 to 2450 with an average of 790.
Most swim schools analysed were based in Australia and New Zealand and term 1 would represent the last term of summer leading into the cooler autumn period.
The method
From the data, we measured the attrition rate of the swim schools included in the data set.
Attrition rate is calculated by the number of cancelled students in the selected period (term 1) divided by the number of starting enrolments at the start of that period.
For example
One swim school in the sample had 110 students cancel and started with 997 students.
Based on this, their attrition rate for the term was 11.03%- 110/997=11.03.
We could divide this by 3 to roughly get a monthly attrition rate for the term period. (this would factor in 2 weeks of school holidays plus a 10-week term).
The result for the above swim school for monthly attrition would be: 3.67%.
The findings
Based on the data, the following findings were revealed….
The best attrition rate for the term was 8.42%.
The worst attrition for the term was almost 19%.
The average attrition rate for the term was 12.41%.
Comments on the findings
From the data, we saw a wide variance between the best-performing swim schools and the worst-performing swim schools.
This would suggest that swim schools have a significant degree of control when it comes to their retention performance.
It should also be noted that this period reflects the end of the warmer months and a transition to a cooler period, therefore it would be expected that this period would potentially be the highest period for cancellation throughout a 12-month cycle.
Future analysis
To help provide the industry with future insights we will review this data every 3 months whilst adding some further variables for analysis such as country, business model, etc.
If you would like to be updated when we release further updates of this reporting you can add yourself to our retention data insights email list here.