Buying a yoga studio: how to analyse customer retention?
Introduction
A yoga studio does not operate like a traditional business. Its profitability relies on recurrence, not on volume. A member who comes three times a week for two years is worth far more than a wave of new sign-ups who disappear after a month.
Before taking over a yoga studio, you must understand what sustains the business: customer retention. A high renewal rate, solid average longevity and regular participation are the true indicators of financial health.
But how do you verify this data concretely? How do you distinguish a studio with a stable client base from one that masks high turnover with aggressive promotions? And above all, how do you ensure that this retention will survive your arrival?
This guide gives you the keys to analyse the retention of a yoga studio before purchase. You will learn which indicators to examine, which warning signs to spot, and how to validate the figures provided by the seller. A rigorous analysis will prevent you from acquiring a fragile structure disguised as a profitable wellness business.
📌 Summary (TL;DR)
Retention is the economic driver of a yoga studio. Before buying, analyse the subscription renewal rate, average customer longevity and participation frequency. Beware of permanent promotions, high turnover and dependence on one or two teachers. Request quantified data from the seller and validate it in the field to avoid unpleasant surprises.
📚 Table of contents
Why retention is crucial in a yoga studio
The business model of a yoga studio relies on recurring revenue. Unlike one-off services, subscriptions guarantee financial predictability and cash flow stability.
Before taking over a studio, analyse the customer retention rate. A loyal subscriber base reduces risk and facilitates the transition. The principles of retention through subscriptions also apply to the wellness sector.
Retention indicators to analyse
To evaluate the quality of a yoga studio's clientele, focus on concrete metrics. These indicators reveal the true health of the business and the viability of your takeover.
Three main metrics allow you to evaluate retention: renewal rate, average longevity and participation frequency.
Subscription renewal rate
Calculate the percentage of subscribers who renew each month or year. A rate of 70-80% is considered good in the wellness sector.
Distinguish between monthly and annual subscriptions. Annual contracts offer more stability, but verify the actual renewal rate after the first year.
Average customer longevity
Customer longevity indicates service quality and business stability. A clientele with 2+ years average longevity is an excellent sign.
Request the registration history via the studio management system. This data reveals whether the studio is building a sustainable community or experiencing constant rotation.
Class participation frequency
Analyse the difference between active and passive subscribers. A client who participates 1-2 times per week will stay longer than a ghost subscriber.
Verify attendance rates via the booking system. A high participation rate indicates genuine engagement and reduces cancellation risk.
Warning signs to spot
Certain indicators reveal weak or artificial retention. Identify these red flags before finalising your takeover to avoid unpleasant surprises.
Three warning signs require particular attention during your analysis.
Aggressive promotions and permanent discounts
Constant promotions often mask a retention problem. If the studio depends on discounts to attract or retain clients, post-takeover profitability will be compromised.
Verify the proportion of subscribers benefiting from reduced rates. A rate above 30% indicates dependence on promotions.
High turnover despite new sign-ups
Distinguish healthy growth from rapid rotation. A constant flow of new clients can hide a high attrition rate.
Request the number of monthly cancellations over the last 12 months. Compare it to new sign-ups to identify potential customer leakage.
Dependence on one or two teachers
Analyse whether loyalty is linked to the studio or to specific instructors. Verify whether key teachers will remain after the transfer.
This issue resembles that of hair salons, where clientele often follow a particular hairdresser.
How to verify retention data
During due diligence, obtain and validate concrete information. Do not settle for verbal figures or general presentations.
Two complementary approaches allow you to validate retention: documentary analysis and field validation.
Documents to request from the seller
Request exports from the management software (Mindbody, Eversports, etc.). Require the history of active and cancelled subscriptions, attendance rates by subscription type and recurring payment data.
Insist on data covering a minimum of 12-24 months to identify seasonal trends and actual stability.
Field validation and discreet exchanges
Visit the studio as a potential client. Observe the atmosphere and interactions between members. An active community is a sign of strong retention.
This approach resembles the analysis of a spa or wellness centre. For thorough due diligence, consult the Leez expert network.
Retention is the most revealing indicator of a yoga studio's true health. A renewal rate above 70%, average longevity of more than one year and stable participation frequency signal an engaged community and a sustainable business. Conversely, permanent promotions, high turnover or dependence on a single teacher should alert you.
Before committing, request precise data: subscription history, monthly retention rate, attendance per class. Validate these figures through field observations and discreet exchanges with members. A rigorous analysis of retention allows you to assess the studio's true value and anticipate your ability to maintain this client base after the takeover.
Are you looking to take over a yoga studio or wellness business? Explore the companies for sale on Leez and access verified opportunities throughout Switzerland.
