Why a two-week membership strategy might be the best solution for your studio
After a 20 year career in finance, I began to work with fitness and wellness owners to help them make data-driven decisions that propel their organizations forward. I’m a member of FitGrid’s operations team, a Certified Mindbody Business Consultant, and the founder of B. Well Consulting. Numbers are my thing and I’m definitely known as a mathlete, not an athlete. I’m here to share simple tips for creating pricing options that are attractive to your clients in the current environment.
As studios begin to reopen for in-person classes, many businesses are struggling with how to organize their pricing options, given that so many things have changed in the last year. Keep in mind that intelligent pricing is so much more than a numbers game. When thought about correctly, your approach to pricing is a powerful way to build your brand and drive more profits.
How do you access the full power of gym membership pricing? The key is to understand the psychology that goes into a pricing strategy.
Membership pricing can depend on a number of factors, including your customers’ current habits, what your break-even point is, your ideal profit margin, and your competitor’s pricing structure.
The first thing you want to do is understand your current revenue and costs, you can figure this out by using FitGrid’s Profit Calculator tool. Once you understand how many people you need in your classes to break even, you can set your profit goals and can start exploring options for membership pricing. One benchmark for membership pricing is attendance data - how many times per month are clients coming to class on average, and how much they are paying each time. From there, you can determine a membership price that will be a good deal to your customers and still bring in your desired profit.
There is no one-size-fits-all approach to membership pricing. Once you know your break-even and profit margin numbers, you may want to explore innovative approaches to membership pricing that will incentivize your customers to sign up and keep your profits high. Implementing a new approach to memberships could be especially appealing right now during this transition time following pandemic lockdowns.
One fresh way to frame membership pricing is the two-week membership strategy, a recurring membership that renews every two weeks.
A two-week membership to a fitness facility is not a new concept (heck, Bally’s offered it before some of you were born), but it’s an approach that will help you re-engage some of your clients and attract new ones. Here’s why this gym membership pricing model might be compelling to your clients:
- Lower barriers to entry - It might be overwhelming to think about life in 30 day chunks of time after all the change we experienced in the last year. It can be a lot easier for a client to visualize how your business fits into their life for the next two weeks than a large frame of time right now.
- Cash flow - Many people are paid twice a month, and would rather spread out their expenses to match the flow of their income.
Let’s look at the benefits of the two-week membership strategy from the perspective of the owner/operator:
- Cash flow, from the business perspective - Recurring memberships give a business a more consistent revenue stream than just class packages, and a two-week cadence can give you a more regular stream of income, allowing some cushion for payroll and other expenses.
- The rule of 4.33 - Most people think of a month as having four weeks, but with 52 weeks in a year, there are actually 4.33 weeks in a month. I know, you’re thinking - stop being such a mathlete–but hear me out. For a client who is in the mindset of four weeks equals a month, a “$99 for 2 weeks of unlimited classes” membership equals roughly $198 per month when in reality, you’re collecting $214.50 per client per month. Every bit counts, and that’s why it might pay to look at things differently.
It can always be beneficial to evaluate your business and revenue from new perspectives. This is especially true in an environment in which so much has changed, and the path forward is less than crystal clear. I recommend trying the two-week membership strategy, it just might be the right solution for you.
ABOUT THE AUTHOR
Chris Beer, the founder of B.Well Consulting, has a diverse background that is rooted in finance, driven by data, grounded by giving, fueled by entrepreneurial passion, and made possible by hard work and grit. After a 20-year career in finance, Chris became a MINDBODY-Certified Business Consultant to help fitness and wellness owners make data-driven decisions that propel their organizations forward. Chris specializes in the development and implementation of business operating systems tailored to a company’s unique way of doing things. This includes how it operates, goes to market, and produces and deals with clients. Driven to be humble and helpful, Chris partners with small businesses to create more success while working more efficiently and gaining a better understanding of what drives their revenue.
FitGrid is a community management system designed for boutique fitness studios to engage clients on a personal level