How Pricing Can Be a Differentiator for Your Fitness Studio


How Pricing Can Be a Differentiator for Your Fitness Studio

Studio owners today have many options when it comes to pricing their services, but it has not always been this way. Back in the day, circa the 1970s, there were tennis clubs and racquetball clubs. There were “joining fees” and “court fees.” And that was about it.

Join AFS

When these club owners embraced fitness in the 1980s, it became apparent that membership fees made more sense and court fees less so. Membership has been the bread and butter pricing structure of the traditional fitness club industry ever since because it offers a guaranteed level of monthly cash flow.

Many fitness studios don’t have the breadth of offering to justify a membership fee, which is why they often price based on a per-class or per-class package basis. This concept also proved to be a viable differentiator when studios began marketing their solutions to the local market.

It was called "pay only for what you buy." However, things tend to come full circle and fitness pricing is no exception. According to AFS’ 2015 Fitness Studio Operating & Financial Benchmarking Report, 62 percent of fitness studios also offer clients a monthly membership option. Fitness studio owners see the potential value in offering clients privileges based on unlimited or specific access for a set monthly fee.

How does a studio operator determine whether to offer studio memberships? Here are a few guidelines to follow.

Is There a Demand?

Obviously, you need to be sensitive to how your existing clients and prospects will react to a membership offering. One of the things that attract consumers to studios, besides the program specialization, high-touch guidance, and tribal community, is the flexibility they afford.

Consumers like the convenience and variability of being able to book the type of service they desire, then only pay for what they expect to use (pay-as-you-go model). Today’s consumer, especially millennials, don’t like to make long-term commitments when it comes to their fitness experience, and they don’t like paying for something they may not use.

As a result, membership offerings that provide unlimited access or limited access on a monthly basis may not be appealing to your studio’s client base. Before you create membership offerings, talk to existing clients and get a sense of where they are.

How Pricing Can Be a Differentiator for Your Fitness Studio

Make Your Case

There must be value for your clients and they must immediately recognize the value of converting from pay-as-you-go to membership. After all, you probably used the opposite line of thinking when selling your services.

"Why pay for that pool if you don’t swim?" you asked the prospective client. "Those are great squash courts, but you don’t play squash, do you?" You may have mentioned things like this to your prospective client.

Now you need to talk up the value of the membership option. Usually, it fits best for your most active clients, but be careful. Those clients are taking the most classes and, therefore, paying you the most money.

One important consideration is what you offer beyond just classes or individual training. Are you one-on-one? Can you add small group training? Are there kids activities to justify a family membership? It will take a careful evaluation of the pros and cons before you can make a significant decision.

What’s the Competition Up To?

Keep in mind the loyalty issue – that over 90 percent of your studio’s clients are also visiting other studios.* Therefore, it’s imperative for you to know what your competition is doing when it comes to pricing. After all, your clients probably already do.

Whether you “secret shop” or simply develop a peer relationship with other local studios, learn the pricing options that are out there. Explore what competitors do and make sure that whatever direction you decide, you are not hurting your studio’s value proposition.

*Source: AFS 2015 Operations & Financial Benchmarking Research Report

Author Information

Stephen Tharrett
Stephen Tharrett's picture

Stephen Tharrett is currently the owner and president of Club Industry Consulting, a global consulting business based in the U.S. He is also a co-founder and partner in Club Intel, a member and brand insights firm.

Stephen is a former board member and president of the International Health and Racquet Sportsclub Association (IHRSA), having served as president of the board from 1996-1997. He is the author of eight management textbooks for the health and fitness industry and a frequent speaker at industry conventions throughout the world and a monthly contributor to the Association of Fitness Studios.

Last seen: Never ago
Joined: 08/30/2016 - 12:02