the company and her problems
Yoga Spirit & Wellness is a delightful 400 sqft community centred yoga studio nestled in a new development near Holdom Skytrain Station. With class sizes that max out at 15 students (a rarity in Metro Vancouver), the clientele demographic is about 60% retired or almost retired baby boomers, and 35% new moms and millennials. The clientele is overwhelmingly female, with only 5% of students identifying as male.
In September 2014, the studio was running on a 4% profit margin, an outdated financial model (barely covering basic functional costs), no marketing plan to speak of (outside of putting up flyers in local coffee shops), classes averaged at 4 students out of 15 possible slots (just enough to cover instructor costs), and there were three corporate clients that kept the entire company afloat.
What can I say, I am an optimist.
The solution was a four part community strategy to be deployed concurrently:
1. Automate Everything: As Yoga Spirit & Wellness became automated, it freed up massive amounts of time that could now be dedicated to our financial model, finding the right employees, creating a new website, effectively manage budgets, tracking campaigns, and performing analysis.
2. The Financial Model: The main problem issue was lack of reliable monthly income. All budgeting was based on monthly averages from previous years. So I:
a. Launched a new unlimited month pass to replace the year unlimited pass. The pass was launched at $72 a month and gradually increased to $108 per month. With this, long-time students could get grandfathered in at a lower rate and new students would accept the higher price as the norm. As soon as this change was made the studio had essential reliable monthly income.
b. Focused on quadrupling the corporate program, which brought in the most profit and had the lowest overhead and cut all programs that did not make any money.
3. Great Employees means a Great Product: Hiring instructors that emobodied our company values was key. This was circuital to providing the best product and fostering long lasting customers. If an employee (in this case yoga instructor) didn’t embody studio values and was less than amazing, that was how customers would come to think of their experience and my business. Skills can be taught, but values are significally harder to instill in a person.
4. Advertising (aka. leveraging community): The main issue with Yoga Spirit & Wellness was that no one knew she existed. Now armed with a great product, all I needed was to get customers through the front door. The solid foundation created in the previous steps would do the rest.
a. Digital Marketing: In May 2016 I launched a summer-long digital marketing campaign (which would be maintained throughout the year), including Facebook ads, Google ads, retargeting links and Unbounce landing pages all with A/B testing. The campaign resulted in a 55.7% increase in profits from the previous September.
b. Referrals/Community Building: As a small business with a small operating budget, quality referrals were paramount for continued survival. So I curated teams of yoga teachers, managers, volunteers, and students which doubled as in person and online community referral networks. In addition to hosting four free non-yoga community events per year, to strengthen relationships and bring in new clients. Referrals are not easily quantifiable, but this story illustrates how effective the community building at the studio was: by the time the studio was sold, the students were so invested in it’s continued success that, without my prompting, long-time students would welcome new students at the beginning of class and encourage them to return in the future after class.
c. Business to Business (B2B): we partnered with businesses, community events and non-profits across Burnaby. These partnerships resulted in two television spotlights on CTV and Global, the use of the studio for community events, and relationships with influencers.
When I sold Yoga Spirit & Wellness - for a 46% profit - the business had grown from a 4% profit margin to a 17% profit margin, over all class attendance had increased by 64%, the studio was a household name in North Burnaby, and its community was rock solid.