With Memorial Day on Monday, many of us are packing our bags to get away this weekend, leaving most fitness studio classes partially or mostly empty. For many studios, this weekend marks the beginning of a seasonal downturn - the slow days of summer. Cue the deal emails: “20% off any purchase now through the end of the holiday weekend!” Deals certainly can be a great way to counteract the downturn, but only when used in a careful, strategic way—and I have advice about how to do just that!
In annual revenue reports, it may appear that offering significant discounts on single classes and packages during usual down periods help drive sales. Based on Dibs’ analysis of studio data, however, the actual long-term result is that studios often see a dip in overall sales and revenue. Plus, the studios still don’t accomplish their original goal of filling up classes during the down period!
Why does this happen? Because such deals simply borrow from the future. They don’t actually get bodies into the studio during these slow periods as was intended, but instead undercut future revenue just to obtain a slight lift in the present.
My advice: Carefully tailor your deals for use only during the anticipated down period. So, in the case of this weekend, offer the discount exclusively for use during the Memorial Day weekend, ensuring the sale will accomplish your aim of filling up classes. Then, offer clients who take advantage of the sale and attend class a better rate or discount on their future packages.
How The Tailored Sale Approach Works in Real Life
One of our customer studios made this switch in their pricing approach and experienced both a short and long-term increase in sales! Every year the London-based studio offered 10-20% off all class packages during the week of Easter to avoid the usual revenue dip, but instead experienced a “fake” revenue increase that month, only to have the following month’s sales decline. They realized that the actual effect of these sales was to borrow from future sales of packages to clients who weren’t even there over the Easter weekend—they just wanted to take advantage of a great deal!
This year they decided to do something different. Instead of offering a sweeping discount, they simply lowered the prices of all their classes for a specific date range around the holiday, using Dibs’ platform to dynamically price all of its classes. The results were astounding.
Customers who were in town were ecstatic to enjoy the discounted holiday rates and attended class multiple times over the weekend. They even mentioned to the owner how much they appreciated the lower rates and how they felt “special” for being around over the holiday. The studio enjoyed its busiest holiday weekend ever, and then saw a drastic increase in sales—both during the month of Easter AND the following month!
So play it strategic with those holiday weekend sales, ensuring that those usually empty classes fill up and paving the way to a far more profitable summer!
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