When owning a boutique fitness studio, you have a million things to worry about and consider. From paying rent and hiring instructors, to designing an incredible workout and experience for your clients. Pricing can sometimes a backseat—which is where we come in at Dibs. We tallied up a few classic and common mistakes in pricing, with some insights into how and why you may want to avoid them:
1. Be very intentional with your introductory offer.
We argue for never giving away free classes. Yes— it can attract customers from near and far, but just bringing in bodies isn’t enough. You want to attract people who will become your loyal customer base, your community.
It’s crucial to associate a value with the first class. Not just to filter out the freeloaders, but so that customers are always aware that this is a service worth paying for.
Buying a package or making that next visit is less appealing if you anchor your customers at zero. Even if you anchor them at $10 or $15, remember that if your drop-in rate is double that, that’s a big jump to make. You may lose a lot of people between the intro special and becoming a regular (which many studios do, so don’t feel bad if you’re reading this!).
From studios we’ve worked with, we’ve seen that by raising the introductory fee ever so slightly, businesses have seen the value of all of their customers go up. We worked with a studio in NYC who raised their intro special price from $18 to $20, then to $25, to find the value of the cohort for the entry price also increased. The group that entered on the $25 price point outspent the lower groups on a spend per person over 3 months
In other words, the higher your first offer price, the more those customers ultimately spend
Strike the right balance with intro specials. We aren’t saying don’t give a generous offer, but don’t do a free class. Pro tip: this is something our team is great at. If you feel like you’re having a hard time finding that perfect price—drop us a line at email@example.com and we’ll be happy to help review your pricing.
2. Too many options
There is a plethora of research showing that too many pricing options will cause hesitation or cold feet amongst buyers. Your goal should be to provide transparent and straightforward options, which the customers will easily decide between and not overthink.
This is a double-edged sword because you most definitely want to provide customers with options to feel like they are getting the most value from whichever they select, but we believe in keeping that within reason.
Keep your options really simple. We suggest around 3 package options, as well as 1 or 2 auto-renew options as well.
3. Pushing overpriced packages
Not necessarily so much overpriced packages, but absurdly large packages (think 20 and 30 packs). On a per class basis they are great value, but few customers can afford to part with such a high amount upfront—especially in a world with more studio competition and people going to multiple studios in a month.
When you look at the data, very few people actually buy the larger packs and those same customers would probably have bought a smaller pack if the larger option wasn’t there.
The smaller packs offer better spot economics than the larger packs for studios.
4. The same price- since opening doors
Obviously here at Dibs, we’re biased towards demand-based pricing, and giving studios the ability to optimize their utilization and class attendance throughout the week. But even if you aren’t ready to make the plunge to dynamic pricing, you should still reset and rethink your pricing strategy. If not quarterly, then at least once a year.
We’ve provided a bunch of suggestions towards your pricing here, but every studio is different. Some studios respond well to 5-class packages. Others have found their sweet spot with 8-class packages.
We worked with a studio that was doing some testing over a couple of years, and saw that hardly anyone bought 10-class packages. But they did feel that they could be selling higher than 5, so they introduced an 8-pack. And Voila! They saw a revenue spike as customers finally felt there was a package that met their fitness and financial needs.
Everyone is different. Look at your data (anecdotally or via reporting tools) and make changes accordingly. And then do it again.
Have more questions or want a pricing analysis for your studio? Email us at firstname.lastname@example.org