Sweat the small stuff

Pricing

How does Dibs price fitness classes?

Is your pricing too low or too high? Are you turning customers away or leaving money on the table? When you set an intentional pricing strategy, you'll know exactly what your business needs to grow. Adjusting your pricing in real-time is 7x more effective than new customer acquisition. When you understand the underlying economics of your business, you'll be on your way to rapid growth. 

Price as a tool to generate more revenue

Price is a powerful tool because you get immediate feedback from customers. If you're confident in your service, and customers aren't buying - it could be your pricing that's off. Your customers are the ones that ultimately decide what the market will bear. If you're charging too much or too little, you could be hurting your business.

Dibs' approach to value-based pricing

Customers make decisions based on price hundreds of times per day. Price is a beautiful and subtle way to influence your customer's decisions. Customers will choose the option that gives them the most bang for their buck. Here's the tricky part, your customers value your classes differently. Some customers are loyal to instructors while others can only go at a certain time of day. Some customers like to plan in advance and others like to wait until the last minute. You need a pricing strategy that let's customers make their own decisions based on what's important to them. 

Dibs' guideline to value-based pricing 

 

  1. Never drop prices at the last minute. 
    Have you ever heard that old saying - "Tripping over dollars to pick up pennies?"
    You might pick up $20 today, but you've lost thousands of dollars in future revenue. You're sending a confusing message - "book early and pay a lot or book last minute and pay a little." Dropping prices at the last minute trains customers to wait until the last minute.

  2. Price every single spot to encourage customers to book early. 
    Dibs prices every single spot in your class. The first few spots are priced a bit lower than the last few spots. That's because demand for your classes increases over time. Some people like to book last minute. Some people are happy to plan ahead if you give them a reason to do it. 

    Let's say you have a class with 20 spots that always fills up:

    Spots 1-5 would be sold at $25
    Spots 6-10 would be sold at $26
    Spots 11-15 would be sold at $27
    Spots 16-18 would be sold at $28
    Spots 19-20 would be sold at $29

    Total revenue for the class would be $532. If you sold all of the spots at $25, you would earn $500.

    For a studio that has 5 classes a day, an extra $32 per class represents $57,600 per year. 


  3. Increase the price for classes that consistently sell out - decrease the price for classes that need a lil boost.
    If your classes consistently have a waitlist, that means your prices are too low. If you increase the price for your most popular classes, you actually drive more customers to buy packages and memberships because those customers can use their credits on all classes regardless of the price they pay.  

Frequently Asked Questions from Studio Owners

How does Dibs determine how to tier the class price? 
Dibs looks at historical data to learn how the class tends to fill up. Dibs sets the average price (we call this the anchor price) for each individual class and then determines what the price should be for each individual spot in the class. Most fitness studios are seasonal, so we consider the time of year to adjust prices down or up. For example, prices would trend higher in January and trend lower in December.

What is the price if they signup a week in advance? A day in advance? An hour before?
It depends on the class. Each class has it's own anchor price (or average price). Let's consider a class that has an anchor price of $32. Let's say that customer 1 books the 3rd spot in the class - they'd pay $28. Let's say that customer 2 books a day in advance - they'd pay $32. Let's say customer 3 books an hour before - they'd pay $34. Overall, the average price paid for the class would be $32.

What is the price if they signup a week in advance? A day in advance? An hour before?
It depends on the class. Each class has it's own anchor price (or average price). Let's consider a class that has an anchor price of $32. Let's say that customer 1 books the 3rd spot in the class - they'd pay $28. Let's say that customer 2 books a day in advance - they'd pay $32. Let's say customer 3 books an hour before - they'd pay $34. 

Who sets the price range for my classes?
You set the minimum and maximum prices for your studio. Dibs determines the optimal price range for each class. Your price will never go below your minimum or above your maximum.

What happens if customers sign up and don't show?
If customers sign up and don't show, they lose the value of the class. If they paid $28, they'd lose $28. Your front desk always has the ability to make exceptions at their discretion. 

Do you have more questions? Send us a note at studios@ondibs.com and we'll answer them here.