Ok.
It appears to me you are having some issues with your marketing to get students in period. 1 lead a week is really hard to grow a studio on. I do not know what your closing ratio is for prospects, but 4 prospects a month is way to few to grow at all. It leads me to believe that something about your fliers, posters, and craigslist adds are turning people away rather then attracting them.
Our school offers Kenpo Karate on the traditional martial arts side, we advertise simply as Karate on the studio front, everyone has pretty much heard of Karate... you start muddying the waters when you add to that, and really muddy the waters when you use an obscure name, at least in the public view... once you have a customer you can educate them on the fine points.
I am wondering if your business name is turning students away, alot of people are hesitant with obscure or relatively unknown styles and names.
Also when you say you have someone answering the phones 7 days a week... do you mean you or a salesmen devoted to your martial arts studio, or a gym counter person? Because it has been my experience that in those situations the gym counter person is going to know next to nothing about your business, and is going to be much more harmful to any prospective students then yourself, or a dedicated salesperson that is specifically looking to grow your business, and not just make whatever they are paid for each hour of sitting there they do.
A few events that have really worked for us in increasing our student base on the karate side to about 500 students...and out of this I would say that about 80 percent are kids between 5 and 17.
great location in a large community
25 years of continued operation
participation in community fairs, parades, and events to increase awareness
buddy days for students to bring in friends or family members for free classses
Advertised Grand Opening Barbeque type party with demos and free food... We opened a new location in Texas with this approach and signed over 60 people up the first weekend alone. Our location in texas is in Lubbock and is a boxing, kickboxing gym catering mainly to adults..
The goal we have used for everything is to be ready at any event or any time to sign a student up, but the main point is to stay fresh in everyones heads so when they are interested we are the first place they come to.
as far as retention goes, are you asking all exiting students why they are leaving? We have discovered certain issues with the exit questions that enabled us to make small changes that absolutely were necessary and enabled us to keep students and make others happy.
I don't know if any of that helps at all.. I hope it gives your some ideas, or ways to look at what your doing. I am kind of surprised other people here have not pitched in, I know there are several other people who run schools