Back in April, ClassPass® once again changed their pricing structure to incorporate a dynamic pricing model. This divisive decision to shift to a credit-based subscription service was done with the intent to, according to ClassPass®, reflect the true cost of classes. With this change, is partnering with ClassPass® now a good decision for your fitness business?
How ClassPass® Credits Work
ClassPass® now offers 3 monthly membership tiers to subscribers, with each offering a different amount of credits to book classes. Classes in ClassPass® are each assigned a credit value based on the negotiated payout price between your business and ClassPass®. The cost of these monthly subscriptions and the credit value of classes vary by geographic location. In theory this means the dollar equivalent to your classes should be closer to your walk-in drop-in price. In practice you will still only take in a portion of a drop-in price through a ClassPass® booking, even if the credit value is equivalent, since ClassPass® takes a portion of that revenue. For example:
Drop-in Rate = $25 → Revenue for your business = $25
ClassPass® Booking = 5 Credits = $25 → Negotiated Payout from ClassPass® is 40% → Revenue for your business = $10
Another caveat: since ClassPass® ultimately determines the credits for your classes, it would be possible for them to adjust the value of your class to below the drop-in rate equivalent and still pay you the negotiated payout amount, devaluing your standard offerings to the savvy consumer.
Yet the benefit of ClassPass® being able to fill otherwise empty slots in a class can be a boon for your bottom line. The chance to win over new customers who find you through ClassPass® is also a promising opportunity.
So how do you leverage the benefit of filling your classes without cutting into your bottom line? That’s become a bit more complicated with credits.
Your current members are one of your most valuable assets. Learn how to keep more of your members with our guide to Gym Member Retention Warning Signs!
ClassPass® Now Controls Your Schedule
When setting up your schedule within ClassPass®, you can determine how many spots are available to subscribers. If you use a scheduling software that integrates with ClassPass®, your entire schedule will import saving you setup time. Then you just have to decide how many of your spots. This integration will also automatically fill your schedule as people book through ClassPass®. By limiting the number of ClassPass® spots to a percentage of your total available spots, you can avoid cannibalizing your revenue. For comparison:
Total Class Spots Available = 15 | Spots available to ClassPass® 33% (5/15)
Full Class with 5 ClassPass® users and 10 Drop-ins → (5 x $10)+(10 x $25) = $300
Total Class Spots Available = 15 | Spots available to ClassPass® 100% (15/15)
Full Class with 15 ClassPass® users, 0 Drop-ins → (15 x $10)+(0 x $25) = $150
However, a new controversial feature of the ClassPass® credits is the ability for subscribers to pay extra credits to get into a “full” class in the app. This means a popular class of yours could be filled with more ClassPass® users than you set in their system, and potentially having to turn away drop-ins. While ClassPass® does pay your business more for these extra ClassPass® attendees, the total revenue is still guaranteed to be lower than your drop-in rate.
Full Class with 5 regular ClassPass® users, 4 “extra” ClassPass® users and 6 Drop-ins → (5 x $10)+(4 x $11)+(6 x $25) = $244
Additionally, for those with integrated schedules, ClassPass® users can use these “extra” credit purchases to attend classes you have zeroed out within the system, like advanced classes meant for your long-time members.
How to Take Back Control of Your Schedule
Zen Planner does not currently integrate with ClassPass®. However if you are using a scheduling software that does and you would like to reclaim control over your class attendance, you too can disable the ClassPass® integration and follow our recommended best practices.
1. Only put classes you want ClassPass® users to be attend into ClassPass’s® schedule.
- Putting beginner, onramp, or introductory classes in is a good idea and can take advantage of people looking for something new.
- Keep in mind if your class is popular on ClassPass®, you will have to accommodate for “extra” attendees, since ClassPass® is separate from your scheduling software.
2. Set the Total class size to the same amount of ClassPass® user spots available.
- For example, even if you class can accommodate 15 people but only want 5 people to come from ClassPass®, set the class up in ClassPass® to be maxed out at 5 with 5 spots available for ClassPass® users.
ClassPass® has changed their pricing structure multiple times since the they launched, and there are bound to be more changes in the future. Their current model more accurately reflects the true value of the classes they offer, but if is a good fit for your fitness business will depend on whether the fuller class can offset the lower revenue per attendee. The best way we have found to do this is to take control of your ClassPass® schedule, manually if necessary, and negotiating a fair rate for your classes.
Once you get new members in the door, the next step is to retain them. Read our guide to Gym Member Retention Warning Signs to see how you can keep more of your members enrolled.