One of the most difficult decisions to make in studio ownership is pricing.  

Pricing is the key to a successful revenue model. Studio finances keep owners up at night, and pricing can get even more complicated when you consider converting from a pay-to-play structure to memberships. Here are five aspects to consider before converting to a membership pricing plan. 

1.) Structure Before Pricing 

Membership is not a one-size-fits-all proposition, especially when it comes to fitness studios. Your memberships need to reflect the behaviors and needs of your client base, as well as the dynamics of the competition and marketplace.  

Consider how frequently your clients use your studio and which pricing plan they prefer.

Let’s say your studio offers group exercise classes or small group training classes, like martial arts, HIIT, or yoga. Do you want to provide a membership that allows clients unlimited access, or would you be better off offering limited access memberships?

Many studios offer unlimited access memberships, but a membership that includes eight classes per month may work better for you.  

Ultimately, the way you package memberships must be defined by your value proposition, your points of competitive differentiation, and what your clients need and want.

If a competitor opens up nearby or it’s time to increase your pricing, communicating that to your client base will be key.  

2.) Know Your Competitors 

Not only is it important to know what your competitors are charging, it’s equally important to know what their clients are getting.

When you know what other studios charge in respect to what they offer, it provides a basic framework for how to structure your pricing plan. If you offer a better member experience than your competition, your pricing should reflect the value of that upgraded experience. 

3.) Know How Often Your Clients Use Your Studio 

Understanding your clients’ average usage levels is good, but it’s more important to know what percentage of members use your studio less than 4x a month, 8x a month, etc.

Usage levels are critical for establishing membership price points based on access level. 

If a high percentage of your clients are already using the studio 12 or more times per month, you’ll need to do the math to determine profitability for this significant base of customers.

If the pricing turns out to be too high for your local market, you might want to reconsider.  

On the other hand, if a good percentage of your customers just need a little incentive that will get them to spend more (and get more), an all-access membership or a hybrid might be what tips the scale.

Your fitness management software can help you track this data. 

4.) The Importance of a Single-Visit Price 

What you charge for a single session is what consumers are prepared to pay for your services. It’s their assessment of your value.

Don’t devalue it when you build your pricing plan.  

For example, if your classes are $25 per session and your average client uses the studio eight times a month, you might want to offer a membership with two visits per week with a 10% discount (8 x $25 x 90%).

With this structure, a membership for eight classes per month would equate to $180.  

Following this structure, you might want to price an unlimited access membership at the value of 10 classes per month, or $225.

Be sure to keep tabs on who’s buying what and how often they’re coming in so you can hone your pricing.  

5.) Always Consider Profit Margin 

Understanding what it actually costs your studio to serve each client each time they visit is a prerequisite for calculating how you price memberships.

Make sure to consider your instructor costs, benefit costs, rent, payment processing costs, etc. “Let’s see how we do” is simply not a strategy.  

It’s critical that you do the math and understand the real cost of delivering your studio’s value proposition. Once you’re armed with that knowledge, the viability of your pricing plan will come into focus.  

Ultimately, how you price memberships requires multiple steps. Each should be undertaken with great care to keep your studio thriving, otherwise you could end up eating into your reputation or worse, your profits. 

If you’re looking for a streamlined, simplified approach to managing all aspects of your gym, Zen Planner is here to help.

We pride ourselves on catering our proven gym management and billing solutions to the particular needs of your gym. Reach out today and book a live demo to see everything Zen Planner has to offer! 

Article originally published September 2019 and updated May 2022. 

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Guest Post Written by Stephen Tharrett, Owner of Club Industry ConsultingStephen Tharrett Club industry

Stephen Tharrett is currently the owner and president of Club Industry Consulting, a global consulting business based in the U.S. He is also a co-founder and partner in Club Intel, a member and brand insights firm.

Stephen is a former board member and president of the International Health and Racquet Sportsclub Association (IHRSA), having served as president of the board from 1996-1997. He is the author of eight management textbooks for the health and fitness industry and a frequent speaker at industry conventions throughout the world and a monthly contributor to the Association of Fitness Studios.