Creating Smarter Pricing

At Urban Athletic Club, we’re always tinkering with models to make them better:

  • How can we perfect the group class model? 
  • How can we improve timing and intervals?
  • How can we provide our athletes a better workout experience?

Our objective is to never stop improving. Through this objective we’ve created a comprehensive, efficient, and effective class we call “Urban Athlete”. Perhaps the next stage is to create a better name so that future clients get a better understanding of what the class offers.  

 This time, we’re tackling the pricing model.  Most studios and gyms offer two pricing models: a Monthly Membership option and a Class Package option.  Today we look into the metrics to find a better way. 

The Monthly Membership Model

With this model you pay one price per month; sometimes you have to commit to several months, or even a year, to get the best rate. Some studios and gyms have enrollment fees, cancelation fees, and hold fees. The thought here is that you are committed to the gym and will workout many times per month to justify the price. 

The Class Package Model

With the Class Package Model you pay for a package of classes (say 5, 10, or 20), typically receiving a discount by purchasing larger packages. Sometimes Class Packages have expiration dates, so use it or lose it. Many people choose Class Packages because of the flexibility and prefer to have options in the case life gets in the way of regular gym attendance. 

The Fitness Buyer’s Dilemma

So you’ve taken you first free trial class and you’re ready to make a decision on your fitness options.  At this moment you have to choose between a Membership or a Class Package. You ask yourself, “How many times will I workout per week?” and “When will work send me back to Cincinnati?” It’s a tough time to choose when you’re also deciding things like, “Is the best workout for me?” and “Can I get up early enough to make class?”

First let’s look at some data. Here’s a list of pricing of Urban Athletic Club and 8 other studios. We’ve included single session, 10-pack, and membership rates. As you can see the average single session rate is $30, a 10-pack at $242, and Membership at $205. Let’s compare the results with attendance.

 
 
 

Now let's take these averages and create a chart to see how they compare based on visits and dollars:

 
 

Findings: 

  • Choose the Class Package option if you average 1-7 classes/month
  • Choose either Class Package or Membership if you average exactly 8 classes/month
  • Choose the Membership option if you take 9 or more classes/month
 

Urban Athletic Club Athletes Attendance Patterns

Data Driven Decisions. That’s what it’s all about, right? We went back and looked at our attendance numbers per client based on their buying habits. 

 
 

Building a Better Mousetrap

So using this data, how can we combine the best of both options to build a better membership model? We started with a three goals in mind:

  1. How can make joining less financially intimidating?
  2. How can we incentivize our athletes to attend more classes?
  3. How can we create a dynamic, flexible membership that matches our clients’ lifestyle?

Here’s what we came up with:

  • Base Rate @ $40/month
  • Peak Rate @ $148/month
  • Loyalty Rate @ $112 and $100/month

The Base Rate is the minimum commitment. You will get 2 visits per month. This does two things: (1) Keeps you committed to working out with us at least every other week, and (2) provides the business with a steady cash flow to maintain operations. 

Each additional class from the 3rd visit to the 8th visit is billed at $18 per class, capping at $148 . This is our Peak rate, and is less than our current monthly unlimited rate. 

The third level is the Loyalty rate, which provides financial incentives to attend more classes. The rates are $112 at the 9th visit and $100 at the 13th visits per month. These financial incentives can help be the push to get out of bed and make class. 

Finally, you’re billed at the end of the month with your rate will changing monthly based on your usage. Your minimum commit is $40, your maximum $148, and you save on your 9th and 13th visit. 

Graphically, here's how it looks:

 
 

So how does this model compare with the averages of similar studios, UAC current pricing included? I think the graph speaks for itself:

 

 
 

 

What we've created has a lower entry point than a traditional membership. While there is a higher cost at zero and one visit per month compared to a package, the benefit is not tying up your money in a package that will expire. Finally, from the 3rd visit on, this model is less expensive than either option. 

So there you go. We're committed to building a better membership model to help you maintain your fitness and your lifestyle. If you're currently a UAC member or Class Package buyer you can keep your same rate. If you want to switch over, then just send us an email. Or you register here.