Membership Models Demystified: Finding the Right Fit for Your Fitness Studio

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Membership Models Demystified: Finding the Right Fit for Your Fitness Studio

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Running a successful boutique fitness studio requires more than you probably imagined when you first decided to open your studio. On top of a long-lasting passion for fitness, you need to know how to manage a team, deal with clients, make sales without sounding pushy, and also have an in-depth understanding of business strategies. Selecting the right membership structure can significantly impact your studio's revenue, client retention, and overall growth. As a consultant, I often see pricing models that don't support a studio owner's goals, so let's talk about membership models and package options to help you choose what works best for your studio.

Class Packages vs Memberships: Which is Right for Your Studio?

When it comes to structuring your offerings, you'll have two main options: memberships or class packages. Each has its pros and cons, and the choice depends on your studio's goals, clientele, and operational capacity. 

Class Packages: 

- Pros: Class packages are easier to sell. They offer flexibility to clients who may not be able to commit to a regular membership, and they also appeal to clients who want to try out your classes for some time before committing to a membership.

- Cons: Class packages can lead to less consistent revenue compared to memberships. They may also attract clients who are less committed to attending regularly, which can impact client retention rates. Clients who purchase class packages often have intentions of coming regularly, but their consistency wanes as time goes on. I bet every studio owner is used to the "Can I extend my expired package?" conversation, which is annoying and also frustrating for your bottom line.

Memberships:

-Pros: Memberships create a steady stream of income and foster a sense of belonging among clients. They encourage regular attendance and can lead to higher client retention rates. Memberships provide a predictable revenue stream, making it easier to forecast and manage your finances, purchases, and actions.

-Cons: Memberships are usually harder to sell and can scare clients who would have happily purchased a class package. Post-COVID, memberships have a negative connotation from clients who felt trapped paying for services they couldn't redeem during shutdowns, and the idea of committing can leave potential clients running for the door. Offering memberships also requires more client management. Inevitably, clients will have questions about pausing for trips or illness and will ask about terms- especially what it takes to cancel. You'll need someone who can manage client-at-risk check-ins for members who fall off the wagon to ensure they use their membership fully, or you risk cancelations.

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Membership Terms: Finding the Sweet Spot

Once you've decided on the type of membership model, the next step is to determine the membership terms - the duration and payment frequency of memberships. Here are some common membership terms to consider:

Monthly Memberships:

Monthly memberships provide a steady stream of income and encourage clients to commit to regular attendance. They also allow for easy budgeting for clients, as they know exactly how much they'll be paying each month. These can be short-term contracts or month-to-month autopay agreements, and the decreased contract term makes them easier to sell. It also makes them easier to cancel or lapse, which means it's harder for owners to count on since fitness memberships are often the first thing a client cancels when budgets get tight. 

Annual or Long-Term Memberships:

Annual memberships offer a higher level of commitment from clients and can lead to increased client consistency and retention rates. These can either be monthly auto-drafts for a longer specified period or an upfront payment in full. These extended memberships make it easier to budget your studio goals since you have autopay contracts or upfront deposits you can depend on. However, annual memberships may deter potential clients who are unsure about committing to a full year. They also require careful planning and nurturing to ensure that clients remain engaged throughout the year.

Choosing the Right Membership Model for Your Studio

When selecting a membership model for your studio, consider the following factors:

1. Client Demographics: Understand your target market and their preferences. Do they have deep roots in the community and, therefore, are more likely to commit to a long-term monthly membership, or do they need the flexibility of class packages for this phase of their life? 

2. Studio Capacity: Ensure that your studio can accommodate the number of members it needs to be profitable. Offering too many memberships without the capacity to accommodate them can lead to cramped studios, long waitlists, and a negative experience for your clients. 

3. Financial Goals: Consider your studio's financial goals and how different membership models can help you achieve them. Before you choose your packages, check your numbers to make sure your offerings support your bottom line. Most importantly, avoid choosing your pricing just because your competition picked that number. Chances are, they need a coach, too. 

4. Trial Periods: Consider offering trial packages for new clients to experience your classes before committing to a membership. When you create your intro packages, try to set your intro to be between 60-70 percent of the cost of your average membership or your ideal purchase option. Appropriately priced trials can help you attract new clients who are willing to pay your rates, which increases your conversion rates while reducing ad spend on clients who won't continue at your standard rates.

So What Should You Choose?

You likely need a combination of memberships and packages to support your studio. Not every studio offers both, but it's undoubtedly the most common if you're aiming to reach both the committed die-hards and the casual practitioners. Choosing the right balance of both is what will determine the success of your pricing. As a consultant, I often encourage studio owners to lead with their memberships, even if those contracts are just month-to-month because it creates a culture of consistency (and recurring revenue- who doesn't want that?). 

If you want clients to choose the membership options, ensure your class package isn't a better deal. They should be significantly more expensive than your average membership cost; otherwise, there's no perk for the client to choose autopay. 

Studio owners often want to offer something for everyone, so they have approximately nine membership options, three class packages, and two intros in an attempt to serve any client. The problem is that it actually causes choice paralysis and results in clients choosing the path of least resistance- the cheapest or shortest purchase option- even if it isn't the one that supports their goals. Rather than offering a smorgasbord of choices, choose up to three that support your studio's goals and sell them confidently. 

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About the author:

Niki Riga
Industry Expert
Limitless Studio

Niki has been a client, a studio owner, and a coach in boutique fitness for over a decade, and she can’t think of an industry she'd rather be in. Her favorite part about coaching and studio ownership are the same: she loves supporting clients as they push past their limits and achieve their goals. Niki became a coach because she was regularly asked, “how did you do that!?” by other studio owners who were drowning in the day-to-day responsibilities of business ownership but didn’t have the support to grow their studio to its potential. She created Limitless Studio to partner with owners who have a vision for their business and are ready to implement systems to build the studio of their dreams.