Tutoring Business Metrics: KPIs Every Owner Should Track

You can't improve what you don't measure. Running a successful tutoring business requires tracking the right metrics—not just revenue, but the underlying indicators that predict long-term success. This guide covers the essential KPIs (key performance indicators) every tutoring business owner should monitor.

Why Metrics Matter

Without metrics, you're flying blind:

• Is student churn increasing? (You don't notice until too late)
• Are tutors underutilized? (Money left on the table)
• Which marketing channels work? (Wasting ad spend)
• Is package pricing optimal? (Leaving revenue behind)

With metrics, you can:

• Spot problems early
• Make data-driven decisions
• Forecast revenue accurately
• Optimize operations
• Justify investments

Core Financial Metrics

1. Monthly Recurring Revenue (MRR)

What it is: Predictable monthly income from active students

How to calculate:

MRR = (Active students) × (Average monthly spend per student)

Example:

• 40 active students
• Average spend: $350/month
• MRR = 40 × $350 = $14,000

Why it matters:

• Tracks growth trajectory
• Helps with cash flow planning
• Indicates business health

Target: 10-20% MRR growth monthly for growing businesses

2. Revenue Per Student (RPS)

What it is: Average monthly revenue from each student

How to calculate:

RPS = Total monthly revenue / Active students

Example:

• $18,000 total revenue
• 45 students
• RPS = $400

Why it matters:

• Shows pricing effectiveness
• Identifies upsell opportunities
• Benchmarks against industry

Industry benchmarks:

• General tutoring: $250-450/month
• Test prep: $500-800/month
• Specialized subjects: $400-700/month

3. Average Package Size

What it is: Typical package hours purchased

Track:

• Most common: 10 hours, 20 hours, 40 hours?
• Average initial purchase
• Repurchase patterns

Why it matters:

• Guides pricing strategy
• Affects cash flow
• Shows parent commitment level

Optimization: If average is 10 hours, consider:

• Introducing 15-hour tier (sweet spot)
• Offering discount for 20+ hours
• Payment plans for larger packages

4. Gross Profit Margin

What it is: Revenue minus tutor costs

How to calculate:

Gross Margin % = (Revenue - Tutor Costs) / Revenue × 100

Example:

• Monthly revenue: $20,000
• Tutor payroll: $12,000
• Gross margin: 40%

Why it matters:

• Shows business sustainability
• Indicates pricing health
• Guides tutor compensation

Industry benchmarks:

• Healthy range: 40-60%
• Below 40%: Tutors paid too much or prices too low
• Above 60%: May struggle to attract/retain tutors

5. Customer Acquisition Cost (CAC)

What it is: Cost to acquire one new student

How to calculate:

CAC = Total marketing spend / New students acquired

Example:

• Spent $1,500 on ads this month
• Acquired 15 new students
• CAC = $100 per student

Why it matters:

• Measures marketing efficiency
• Helps allocate budget
• Must be lower than LTV

Target: CAC should be 1/3 or less of student LTV

Student Health Metrics

6. Student Retention Rate

What it is: Percentage of students who stay active

How to calculate:

Monthly Retention = (Students at month end / Students at month start) × 100

Example:

• Started month with 50 students
• Ended with 48 students (2 left)
• Retention = 96%

Why it matters:

• #1 predictor of business health
• Cheaper to retain than acquire
• Shows product-market fit

Industry benchmarks:

• Excellent: >90%
• Good: 85-90%
• Concerning: <85%

Cohort analysis: Track retention by cohort (when they started):

• Month 1-3: 80-85% stay
• Month 4-6: 90-95% stay
• Month 7+: 95%+ stay

Action: If retention drops below 85%, investigate immediately.

7. Student Lifetime Value (LTV)

What it is: Total revenue a student generates during their relationship with you

How to calculate:

LTV = (Average monthly spend) × (Average months retained)

Example:

• Students spend $400/month on average
• Stay for 14 months on average
• LTV = $400 × 14 = $5,600

Why it matters:

• Shows long-term value of marketing
• Justifies acquisition costs
• Guides retention investments

Rule: LTV should be 3x+ your CAC

8. Net Promoter Score (NPS)

What it is: Would parents recommend you?

How to measure: Ask: "On a scale of 0-10, how likely are you to recommend us?"

• 9-10: Promoters
• 7-8: Passives
• 0-6: Detractors

Calculate:

NPS = % Promoters - % Detractors

Example:

• 60% promoters
• 30% passives
• 10% detractors
• NPS = 60 - 10 = 50

Why it matters:

• Predicts word-of-mouth growth
• Early warning of problems
• Guides improvements

Benchmarks:

• Excellent: 50+
• Good: 30-50
• Needs work: <30

9. Churn Rate

What it is: Rate at which students leave

How to calculate:

Monthly Churn % = (Students lost / Starting students) × 100

Example:

• 50 students at start
• 3 left this month
• Churn = 6%

Why it matters:

• Inverse of retention
• Tracks business health
• Identifies problems

Target: <5% monthly churn (or >95% retention)

Churn reasons to track:

• Moved away (unavoidable)
• Cost (pricing issue)
• Not seeing results (quality issue)
• Scheduling conflicts (operations issue)
• Tutor mismatch (matching issue)

Operational Metrics

10. Tutor Utilization Rate

What it is: Percentage of available tutor hours that are booked

How to calculate:

Utilization % = (Hours taught / Hours available) × 100

Example:

• Tutor available 20 hours/week
• Booked for 16 hours
• Utilization = 80%

Why it matters:

• Shows capacity efficiency
• Indicates when to hire
• Affects profitability

Targets:

• Optimal: 75-85% (allows flexibility)
• Under 60%: Too much capacity, losing money
• Over 90%: Need to hire more tutors

11. Session Completion Rate

What it is: Percentage of scheduled sessions that actually happen

How to calculate:

Completion Rate = (Completed sessions / Scheduled sessions) × 100

Example:

• 200 sessions scheduled
• 185 completed
• 15 cancelled/no-showed
• Completion rate = 92.5%

Why it matters:

• Affects revenue realization
• Indicates reliability
• Shows policy effectiveness

Targets:

• Excellent: >95%
• Good: 90-95%
• Problematic: <90%

Improve by:

• Stricter cancellation policies
• Automated reminders
• Makeup session credits
• Parent education

12. Average Response Time

What it is: How quickly you respond to inquiries

Track:

• Lead inquiries: Response within X hours
• Parent messages: Response within X hours
• Support requests: Resolution within X days

Why it matters:

• Affects conversion rates
• Shows professionalism
• Impacts satisfaction

Targets:

• Lead inquiries: <2 hours (business hours)
• Parent messages: <24 hours
• Issues: <48 hours to resolve

Data: Response within 5 minutes = 400% higher conversion than 10 minutes

13. Session Note Completion

What it is: Percentage of sessions with tutor notes filed

Target: 95%+ of sessions should have notes

Why it matters:

• Shows tutor professionalism
• Improves parent satisfaction
• Documents student progress

Track in Gigpie: Session completion workflow includes notes prompt

Growth Metrics

14. Lead-to-Student Conversion Rate

What it is: Percentage of inquiries that become paying students

How to calculate:

Conversion % = (New students / Total leads) × 100

Example:

• 40 inquiries this month
• 12 became students
• Conversion = 30%

Why it matters:

• Shows sales effectiveness
• Identifies funnel leaks
• Guides process improvements

Industry benchmarks:

• Excellent: >40%
• Good: 30-40%
• Needs work: <30%

Improve by:

• Faster response times
• Better qualification questions
• Compelling intro call
• Easy booking process

15. Referral Rate

What it is: Percentage of new students from referrals

Track:

• Source: How did you hear about us?
• Referral percentage of total new students

Why it matters:

• Cheapest acquisition channel
• Indicates satisfaction
• Compounds over time

Targets:

• Mature business: 40-60% from referrals
• New business: 20-30% from referrals

Boost with:

• Referral incentive program
• Make it easy (share link)
• Ask at the right time (after success)

16. Marketing Channel ROI

What it is: Return on investment by marketing source

Track per channel:

• Google Ads: CAC, conversion rate, LTV
• Facebook Ads: Same metrics
• SEO/organic: Same metrics
• Referrals: Cost per referral program

Calculate:

ROI = (Revenue from channel - Cost of channel) / Cost × 100

Example:

• Spent $2,000 on Google Ads
• Acquired 15 students
• Those 15 will generate $84,000 LTV (15 × $5,600)
• ROI = ($84,000 - $2,000) / $2,000 = 4,100%

Why it matters:

• Shows where to invest marketing dollars
• Identifies underperforming channels
• Optimizes budget allocation

Dashboard Setup

Weekly Dashboard

Review every Monday:

Quick review: 10 minutes to spot trends

Monthly Dashboard

Deep dive on the first of each month:

Financial:

• MRR and growth rate
• Revenue per student
• Gross profit margin
• CAC vs. LTV

Student health:

• Retention rate
• Churn reasons
• NPS score
• Student feedback themes

Operations:

• Tutor utilization
• Session completion rate
• Response times
• Capacity planning

Growth:

• Lead sources
• Conversion rates
• Marketing ROI
• Referral rate

Quarterly Business Review

Every 3 months, analyze:

Trends:

• Revenue growth trajectory
• Student retention cohorts
• Tutor performance
• Seasonal patterns

Strategic questions:

• Are we on track for annual goals?
• Do we need to hire more tutors?
• Should we adjust pricing?
• Which marketing channels to scale?

Benchmarking

By Business Size

Solo tutor (5-15 students):

• Focus on: Retention, utilization, referral rate
• MRR growth: 15-25% monthly (small base)
• Don't worry about: Complex metrics yet

Small center (15-40 students):

• Focus on: All core metrics
• MRR growth: 10-20% monthly
• CAC: $50-150 per student

Growing business (40-100 students):

• Focus on: Operations metrics, tutor utilization
• MRR growth: 5-15% monthly
• Gross margin: 45-55%

Established center (100+ students):

• Focus on: Efficiency, retention, profitability
• MRR growth: 3-10% monthly
• Multiple locations or specializations

Common Metric Mistakes

1. Tracking Too Much

Problem: 50 metrics = tracking nothing effectively

Solution: Focus on 8-10 key metrics that matter for YOUR business stage

2. Vanity Metrics

Problem: Tracking things that look good but don't drive business

Vanity metric examples:

• Social media followers (unless converting to leads)
• Website traffic (unless converting to inquiries)
• Total students ever (active students matters)

Focus on: Metrics that directly tie to revenue and growth

3. Not Segmenting

Problem: Looking at averages hides important details

Solution: Segment by:

• Student type (test prep vs. academic)
• Age/grade level
• Subject area
• Tutor
• Marketing source

4. Ignoring Trends

Problem: Only looking at snapshots, not trends

Solution: Track metrics over time (weekly, monthly, quarterly)

Example: Retention might be 88% this month (okay), but if it was 95% six months ago, there's a problem.

How Gigpie Helps

Gigpie automatically tracks key metrics:

Built-in analytics:

• Revenue and MRR tracking
• Student retention reports
• Tutor utilization dashboards
• Session completion rates
• Package balance trends
• Marketing source tracking

Custom reports:

• Filter by date range, tutor, subject, etc.
• Export to CSV for deeper analysis
• Scheduled email reports

Real-time alerts:

• Student hasn't booked in 30 days (churn risk)
• Package balance running low (repurchase opportunity)
• Tutor utilization dropping (capacity issue)

Action Steps

This Week

1. Set up basic tracking

   • Active students
   • Monthly revenue
   • New inquiries

2. Calculate current metrics

   • Student retention
   • Revenue per student
   • Tutor utilization

3. Create weekly dashboard

   • Template in spreadsheet
   • 10-minute Monday morning review

This Month

1. Add advanced metrics

   • LTV calculation
   • CAC per channel
   • Churn reasons

2. Set targets

   • Based on benchmarks
   • Realistic for your stage

3. Review with team

   • Share key metrics
   • Celebrate wins
   • Address concerns

This Quarter

1. Analyze trends

   • 3-month patterns
   • Seasonal effects
   • Year-over-year growth

2. Adjust strategy

   • Double down on what works
   • Fix what's broken
   • Test improvements

3. Forecast next quarter

   • Based on data, not guesses
   • Plan hiring needs
   • Budget marketing spend

Frequently Asked Questions