Tag Archives: Memberships

How to price your gym memberships

11 November 2018 openplay Leave a comment Memberships

The rise of both budget gym chains and expensive boutique studios has put pressure on the mid-tier fitness service.

Experts have advised many of the reasonably priced gyms to either style up or strip away the trimmings. But is yoga on surfboards anything more than a fad? Will people tire of bringing their own towels to a bare, cold and soulless budget gym?

Pricing your gym memberships is a difficult decision. A successful revenue model will return healthy margins; get it wrong and you could be in for early closure.

If you’re struggling to decide on a membership pricing model, here are some key points to consider.

Location, location, location

Chicken or egg, business model or location; it doesn’t matter which came first, but you cannot consider one without the other.

  • Check out the competition. A single street does not need three budget gyms, but the neighbourhood may benefit from two. You need to determine if you should price your gym similarly to the competition- perhaps there is a high demand for another budget gym- or if you will opt for a different pricing strategy. If you choose to veer away from the competition, ensure that there is demand in the area for your model.
  • Who is in the neighbourhood? Are you planning on opening up on the corner of 5th Avenue or in a small town upstate? Rent alone will force a very different price mark, but so will your target market. Single business people and wealthy families may have similar spending limits, but their desires are different.

Consider the services you offer

  • A budget gym will offer the essential fitness equipment and changing room facilities, but all will be fairly basic- a meat no trimmings service. Often long hours or even 24/7 to cater to shift workers. Classes are basic and usually provided by on-site instructors or the occasional freelancer. Minimum staff overheads are attainable by using access control technology like membership pins, barcode apps or keycards. A high volume of memberships provides a healthy profit margin.
  • A Mid-tier will offer an array of classes taught by good, reliable instructors. There will be plenty of on-site staff on-site to assist members and create a warm atmosphere. A medium range gym will most likely have a swimming pool- although not in a high-rent location- and should provide towels.
  • A high-end gym will cater to specific needs. Childcare, on-site physio treatments and a well-run cafe mean that this is more than just a fitness facility. Swimming pools and sports facilities, as well as coaching academies and expertly-taught classes, add to the prestige and validate membership costs. Staff should make an effort to get to know members, creating a community feel that encourages members to lounge after workouts. Keeping the clientele in mind, you might add services to suit business people or wealthy families- squash and tennis are popular with both of these demographics.

Read more: 8 ways to increase revenue at your sports centre

Offer a variety of prices

  • By time: You will need to offer a variety of pricing options. The most obvious example of this is an off-peak membership, which allows users to enjoy the club for cheaper at less popular times. This will benefit the club by optimising usage and controlling peak times.
  • By genre: Some clubs restrict access to certain services, such as offering a Gym-only membership, a Gym and Swim, or Sports pitch access.
  • By clientele: Discount models open up your gym to those who otherwise couldn’t afford to be members. While some high-end gyms want to remain uber-exclusive, a discount structure could boost your revenue. Students, corporate, family and elderly discounts can be as effective as off-peak and peak memberships in evening out usage. These demographics are all on different schedules, meaning you can bulk up mornings and take the heat of the peak 6 pm rush.

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What pricing structure is right for your fitness business?

7 November 2018 openplay Leave a comment Memberships

Is your current pricing structure optimising your revenue? Your facilities may be full, but that does not mean you are optimizing your revenue?

By rejigging your pricing structure, you can encourage greater customer loyalty and increase memberships without seeing your margins squeezed.

Today, a lot of fitness centres are experimenting with new tech, incorporating dynamic pricing into their revenue model. Dynamic pricing, the ClassPass marketplace and credit packages can be effective, but they may not be the best choice.

Here are five pricing structures to consider.

Class packages and pay-as-you-go

Class bundles are a better option, as they give customers time to establish a habit of going to your centre.

Many boutique studios offer class bundles, that work on a sliding scale: 1 class, 5 class, 10 class, 15 class, peaking at the Unlimited monthly membership.

The trick to getting customers booking higher bundles is to make the highest amount seem like such good value they cannot turn it down.

  • This building-block pricing structure is ineffective, offering no reward for choosing higher packages.

    1 Class5 Class10 ClassesUnlimited (Estimated 20 classes)
    €20€100€200€400
  • While this discount structure is logical and the most popular strategy, it can leave customers conflicted. They go home to think, considering if they will use the club enough to warrant opting for the highest option:

    1 Class5 Classes10 ClassesUnlimited (Est. 20 classes)
    €20€95€190€350
  • The best structure makes the highest, most expensive option the obvious bargain:

    1 Class5 Classes10 ClassesUnlimited Classes (Estimated 20 classes)
    €20€95€190€230

    Customers look at this and immediately realise unlimited is by far the best option. Thus, they are much more likely to choose it.

 

Monthly memberships

A set price per month or year will keep your revenue stream consistent and predictable. This is the prime choice for gyms, the ultimate hoop for studios to jump through.

So what is the best way to get people hooked on memberships? Well, first off there is a similar method to the class package: the decoy ascending pricing structure, as depicted above. A 12-month membership is by far the best value for money, while month-by-month is the most expensive option.

Offer free trials, be generous with your service- you need to get people through the door. Some gyms offer a three-day pass, so people can establish a habit and an attachment with your facility.

Offer different tiers of membership. For example, off-peak and peak, student or concession, gym only or gym and swim.

Dynamic pricing


Dynamic pricing involves fluctuating class prices, usually determined by the popularity of the class and the amount of time between booking a sport and starting the class. It is a difficult option to get right and one that is still in the experimental stages. It is most used in the boutique fitness market, where customers pay premium prices for premium slots.

There are a number of software products on the market, each of which follows a slightly different a system. However, uniform throughout is a minimum and maximum cut off point, so classes will never be dirt cheap or sky high.

The most popular strategy is a descending model. This means that the earlier you book a class the more expensive it is, while those who book last minute can grab a bargain. The purpose of this is to maximise capacity, so spots that would otherwise be vacant get snapped up. The problem with this is that no one is loyal to you and it destroys your ability to plan ahead. In our opinion this model is a race to the bottom, all of your customers are hungry for a bargain and will forget to appreciate the value of your service.

An ascending model, on the other hand, is much like aeroplane flights today, the earlier you book the cheaper your flight/ class. While it is better to reward advance booking, this method will dissuade some people from booking at all. Your classes will be half full- or half empty, as we see it- and some of your customers will grow to resent this system.

Classpass marketplace

Oh boy, this is a meat market, selling premium cuts at discount prices. It can be difficult to stand out in this marketplace since your competitors are merely a thumb-scroll away. Even your loyal customers will be tempted by the smell from the other sellers. Nobody knows where to look and so they float between stalls, grabbing samples as they go.

Classpass is not quite as cut-throat as it used to be; it understood that its model was pricing out many studios. One cannot deny that the service has opened doors and put bums onto yoga mats. It worked as a marketing tool for the boutique fitness industry as a whole, encouraging many would be gym-goers or non-exercisers into studio classes.

But Classpass monopolised the landscape, squeezing margins and turning loyal club members into casual drop-ins. If you think your boutique studio needs the marketing help, Classpass can provide an opportunity that will make your brand known. If, however, you have a loyal fanbase, think long and hard before making the switch. For all you know, those loyal customers might make the switch too.

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Word of Mouth Marketing: How to create an effective gym member referral programme

14 August 2018 openplay Leave a comment Booking System, Marketing, Memberships, Operations

You can pay for AdWords and spend thousands on a social media campaign and still struggle to increase footfall at your facility. Despite all the advancements in technology, word of mouth is still your most effective marketing tools. A member referral programme is an age-old, low-cost way to rake in new meat to your fitness centre. 92% of consumers trust recommendations from family and friends over every other form of advertising.

So how can you use word of mouth marketing to increase revenue and improve customer satisfaction?

What is the return?

Obviously, new members are what we’re after, but referrals, specifically, can prove to be astonishingly lucrative. According to Harvard Business Review, customers obtained through referrals are more faithful and more valuable than regular customers. The study reviewed 10,000 accounts in a large German bank over a period of three years. It found that, on average, referrals are 18% more likely to stay with the business. They also spend about 16% more (amounting to €40 each). When considering both of these factors, the company earns about 60% on its €25 referral award. Referrals begin their gym journey with a higher level of trust than someone who has no prior connection with your service. This means that they are happier to spend money on your products.

To reward the referrer or the referree?

You might think that you can get away with rewarding your current member and bypassing your new client, but overall a method that sees both parties benefit works best. Giving discounts to all involved makes them feel like a team who have worked together for their prize.

How generous should you be?

The first step in creating an effective gym referral programme is to create a great offer that incentivises both the referrer and the referree. The reward given out should always be in line with the reward your business receives, ie: a possible gym membership. To find a suitable figure, you need to calculate the profit margin of each individual membership, ie. what is left over once rent costs, instructor costs, towel service, water etc have been taken away.

For example, if your profit margin is 50%, the reward you offer needs to be significantly lower than this. A 10% membership discount for both customers would still leave you with a 30% profit increase from the new sale. You need to calculate a figure that leaves you confident your margins are healthy but one that is also a significant reward to the customer. Alternatively, you could waive the initial joining fee or throw in free merchandise and PT sessions.

Inform members

Once you’ve devised a plan, it’s time to tell your members. You can do this via whatever means of communication you normally use. This can be email marketing, push notifications (if you have an app), in-house posters, or verbally, when members check in at the reception desk.

Read more: CRM: What is it and do you need a system in place?

Guest passes

The try before you buy model is enticing to potential customers. Of course, having the trusted view of your gushing pal is persuasive, but it doesn’t beat smelling the sweaty chlorine air for yourself. Offer members three yearly guest passes and encourage them to bring new people into the club.

Move in for the kill

Without looking like a tiger ready to pounce on its prey, be ready and eager to settle the sale. Some consumers will sign up having never set foot in your gym, but they’re the easy sell. Those that utilised a guest pass may be a little fussier and more cautious with their investments. Assuming that your guest checked in upon arrival, your sales team has already had a chance to greet them and obtain their contact details. Aside from plying them with alcohol, your guest will be happiest and most willing to join immediately after their visit, so try to tap into their spontaneous side. Organise a casual chat in the cafe or reception area. Using a friendly, moderate approach will be most effective.

If they leave without joining, simply send them a gentle reminder a day or two later, so you remain on their mind. Apart from that, you have a trusted side-kick in your current member: their friend.

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How to increase member retention: A guide for sports centres, gyms and studios

7 August 2018 openplay Leave a comment Booking System, Memberships

It’s the same every year; January sees a flock of eager Christmas-pudding shifters clog up the gym as they attempt to do sit-ups on the leg curl machine. But most of these blow-ins are nowhere to be seen come February. Gyms must work harder to motivate and retain these well-intentioned newbies if they want to keep their membership numbers up.

Redundant memberships are more common than active ones. The less a member uses your facilities, the less likely they are to renew their membership. For every additional visit a person makes each month, their risk of cancellation reduces by 33%.

So how can you increase member retention? The answer is surprisingly simple: communication and engagement.

Reward member loyalty

Your longtime members are most likely to become dissatisfied with your service. To combat this, consider offering a point-style loyalty system where people earn a free smoothie after five visits or free personal training session after 20 visits. Reward them with extra guest passes, which, in turn, could gift you with new members.

Implement a CRM system

Customer relationship management (CRM) software is booming in the technology world and beyond. CRM is usually stored in the cloud, where it records, reports, and analyses each interaction between a business and its customers. When you understand your customers; remember their previous requests, their birthday, and their goals with you, they feel valued. Your CRM system is built into your OpenPlay account, so you can access a customer’s details and discover their relationship with you directly from your OpenPlay dashboard.

Curious? Learn more: CRM- A complete guide

Promote PT and group classes

It is not the swanky heated pool or treadmills with Sky Tv that will keep the bulk of your members coming back; human interaction will. People are socially motivated. Whether it’s a group fitness class, where friends can work out together, or a personal trainer who will scream at clients for missing a session, humans need to be involved.

Challenge cycles

Make every second month the “January rush”. Host a ‘30-day Challenge,’ where people compete to complete the highest number of workouts in 30 days. Introduce a leadership board and get your staff to promote the competition or even join it. These competitive events will keep customers engaged and help them achieve their exercise goals.

Reach out to inactive members

Using your CRM system, you can track member activity. Send polite, motivational emails to those who have been absent for a few weeks. Recommend your favourite upcoming classes, Attaching workout tips and remind members that your staff are always around to help with any questions or concerns.

Staff engagement

To keep members engaged, you need your facilities to feel like a community. A hello is free, and a smile costs nothing, so make sure that every employee is friendly and forthcoming. Wherever possible, learn clients’ names, and use them. Staff should be extra accommodating with new members- yes, the January mob! Show them how to use equipment, recommend appropriate classes, and welcome them into the community.

Question: What tactics have you used to increase member retention?

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Customer Relationship Management (CRM): What is it and do you need a system in place?

27 June 2018 openplay Leave a comment Analytics, Booking System, Marketing, Memberships, Operations, Technology

In 2018, customer relationship management (CRM) software became the leading and fastest growing software market, with a growth rate of 16%, according to research by Gartner. Worldwide, CRM software revenue reached $39.5 billion at the end of 2017, surpassing that of database management systems (DBMS). With such rapid growth, people have been given little time to get their heads around what CRM actually is. Many people use the word, sounding impressive in emails and board meetings, but frequently they confuse its meaning with more general management software. So, what exactly is CRM and should your wellbeing business use one of these highly complex systems?

What is it?

Simply put, CRM is a way to manage and improve your interactions with customers and potential customers. Sometimes it refers to a company’s theoretical strategy or process. In its most recent format, it is a software product, usually stored in the cloud, that records, reports and analyses every interaction between company and customer. It sounds very Big Brother, but it is intended to serve both the service provider and the consumer.

The Benefits of CRM

  1. Personalised marketing: CRM allows for a more personalised approach to marketing. Think of targeted ads that follow you around the internet; CRM refines this personalisation further. Customers or potential customers are only advertised to about products or events that are highly relevant to their interests.
  2. Automated sales: Salespeople cannot afford to waste time rooting through spreadsheets and notepads to remember their relationship with a customer. CRM puts this information directly onto their dashboard allowing for a much smoother and more effective pitch.
  3. Higher retention: It is proven that retention rates and member usage are directly correlated. For each additional visit by a member in any given month, the risk of that member cancelling in the subsequent month is reduced by 33%, according to research by IHRSA. With a fitness CRM system, you can monitor and reach out to inactive members who are most vulnerable to cancellation.
  4. Customers feel valued: A mother might call with a query about her daughter’s tennis group. With an efficient sports CRM system, you can quickly search her name and load every previous interaction. With the facts laid before you in your dashboard, you will be able to provide a more personalised customer support service. Member care is a journey; it evolves as your members change.
  5. Happy Birthday: Automatic birthday wishes can be sent to every client with the gift of a special offer. For many activity providers, kids’ birthday parties are a big chunk of their income. An effective CRM system could decipher appropriate clients and send a promotional email in advance of the child’s birthday.

Budget for change

CRM systems for sports typically contain vast amounts of sensitive personal data, such as customer contact information, date of birth etc. This information increases in value over time, as a customer’s profile builds up. In its very nature, CRM is prone to General Data Protection Regulation (GDPR) non-compliance. CRM budgets are expected to increase as companies follow GDPR procedures.

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How to get your members online

23 May 2018 openplay Leave a comment Marketing, Memberships, Technology

Generally it is the retired generation who are most reluctant to embrace online booking. With small print, confusing tick boxes, and ad banners, it is completely understandable. Self-service checkouts received a barrage of complaints when they first arrived. There is less human interaction, glasses need to be put on, and for goodness sake I already put it in the bagging area! But self-service checkouts have massively reduced business costs and increased service efficiency. 90% of shoppers aged 18-39 find self-service checkouts easy to use and appreciate their speed. Only 50% of those over 60 feel the same. At OpenPlay, we understand the reservations some of your customers may have when it comes to digital. That’s why our online booking process is straightforward; with no unnecessary pop-ups and easy to follow steps.

Those who dislike change are unlikely to abandon you for another club or venue… They dislike change, remember?

Plan for the future…

Forward thinking and future planning needs to start now. The upcoming generation of retirees are already online and digitally adept. They are not going to revert back to paper the day they clock off for the last time. OpenPlay makes the online experience as smooth and streamlined as possible. It is easy to navigate with minimum clicks involved. The sooner you get your bookings online, the quicker your current customers will get to grips with the system and embrace the world wide web.

Cash loving…

There’s always someone who whips out a fifty when buying a round, counts coppers at the newsagents, and tuts at the beep of an oyster card. Yet, e-commerce is booming, causing “heartbreak on the high street”, and is expected to increase by 23.3% this year alone. You may keep the cash till for energy bars and coffees, but your big sales need to be accessible online.

Consider a dual system…

You are likely to have someone at the facilities for a duration of the day who can take bookings from those that are not ready for online booking. Even with this dual system, their membership, payments and data can be logged into the same OpenPlay system as the rest of your clients. This is still much more efficient than manually logging everybody’s bookings. As other members basque in the ease of online booking, word will spread and others will be encouraged to join in. This is an investment that will increase in value as online sales continue to grow.

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