The Top 5 Growth KPIs for Coworking Spaces | Part 4: 'Revenue per Member'
Editor's Note: This is a guest post from Ed Blunderfield from Optix coworking software, a digital platform for coworking spaces and smart offices. You can find the first article of the series here. For part three of the series, click here.
When thinking about growth strategies for a coworking space, it’s common to focus all of our energy on attracting new members; however, it is possible to grow revenue by better serving, and creating more value, for existing customers. Business revenue can be boosted if more money is generated out of the same number of customers. This brings me to my next KPI: Average revenue per member.
Focusing on enhancing the experience and providing greater value for your existing customers not only offers direct revenue growth opportunities, but it also requires you to better understand your existing customers’ needs and sharpen your customer-service skills. This will pay dividends in all aspects of running your business.
Why ‘revenue per member’ is an important KPI
Sometimes, ambitions to scale a coworking business can draw operators too far outside of their current operations and cause them to forget the people they’ve already won over. Working to increase the average revenue generated per member forces a coworking brand to hone its value proposition, provide a better experience to current members, and then thoughtfully translate all of this to attract new members.
Using this KPI, you will be able to identify areas of improvement in your existing offering, helping you to better understand what your customers want out of your coworking space.
Four tactics to help you increase your ‘revenue per member’ KPI
Here are four tactics to help you increase your revenue per member:
1. Craft enterprise-focused marketing plans
If you find that members of your coworking space belong to a particular enterprise, then you can offer the said enterprise special rates and amenities (such as designated office spaces with privacy and customized pricing). As more and more enterprises choose to send their employees to work out of coworking spaces, coworking businesses in turn are adapting to accommodate these enterprises.
Enterprises are great sources of steady revenue and offering them a tailored experience, within your coworking space, is a great way to boost your revenue. Check out this article our team recently wrote about using strategic partnerships as a source of funding for growth.
2. Maximize space utilization throughout the day
Although your coworking space is likely to experience the traditional ‘9-5’ as it’s busiest periods in the day, there are opportunities to drive traffic outside of that window. Take advantage of the fact that your business model is built around flexibility and innovation, something that most traditional office spaces cannot offer.
You can offer special discounted rates for “off-peak” hours so that you can optimize your space’s utilization throughout the day. Some members that may be using alternative workspaces in order to compensate for a busy 9-5 window in your space may see this as a great opportunity to upgrade to your full-time plan as the space becomes increasingly supportive of their needs.
3. Offer add-on amenities
After engaging with your customers to find out what additional amenities or experiences they would like, you can build out your membership plans with new add-ons.
Consider offering add-ons or setting up membership tiers—with the more expensive memberships carrying more features. You should be mindful that these additional features are enhancements to your core product, and you must have a solid core offering before diverting your attention to adding on extra features. If the foundation is shaky, everything you build on top of it is at risk.
4. Create a tier for social membership
A fantastic way to help introduce new people to your community is through a social membership. Although these individuals are not committing to a dedicated desk, office or even a drop-in plan, yet, they are engaged and want to be a part of the community. This might mean access to events, or even a discount on any ad-hoc space bookings or day passes they purchase.
By providing them with a low-commitment option, you not only create a revenue opportunity, but more importantly you begin a relationship where you can constantly provide exposure to your coworking brand, the community, and the various ways the prospective member could get involved. Over time, many of these “social members” will upgrade to larger plans and become more significant contributors to the community.
Take a look at the tactics you're currently employing to increase the revenue per member in your space. What’s working and what’s not? What can you do today that might help drive this particular KPI?