I own a small (400 member) 24 hour health club and we have charged for classes since the day we opened 5 years ago. In celebration of 5 years we are considering switching to free classes. Our reasoning is to increase the number of paying members, increase the size of our classes (currrently we have about 4-6 averaging in every class) and broaden our market base. Our current class goers love the classes and feel they are a great value, but we are competing with the free classes at our local Y and the fee based boutique classes at the smaller gyms in town. Doing so will result in a 15k per year drop in revenue for us which is super scary! (That 15k could be recovered by signing up 26 new full price members.) Has anyone ever had experience with this? Are we crazy? Any advice on how to implement this successfully?
It’s been 28 days since I asked this question and man what a whirlwind it has been! We are kicking butt! This was the best decision for us. I am glad we decided to do it when we did and so happy with the outcome from members.
From the beginning we didn’t want to look at this decision as “lowering our prices” but more as a change in business format. So far it has turned out better than expected.
We needed 26 full price (not spouse or child memberships) to make up for our revenue loss from classes and gave ourselves 3 months to get it accomplished. We have added 30 since the first of the month!!! In total we have added 43 new members to the gym in 21 days (combined basic, spouses and children).
Our revenue is up 11% for the month even with the lack of classes revenue and the overall vibe in the gym is one of high energy and sincere appreciation for our change over. Our current members are happy and we are getting more new members every day from the buzz. I look forward to working hard to keep the new members we have and continuing to grow.
I will update again in a few more months once things have settled down.
Thanks so much for your feedback everyone. Many of the questions raised here were actually great reasons for why we should change our business model to create free classes. After many replies to a survey and speaking with staff we are unveiling the new price platform next week. I am super stoked about it and feel like this is the right direction. Every business is unique and we had to listen to our guts and our members to make this decision. Thanks a ton for all of your feedback, it has been great to see the questions raised by my peers I will update in a few months to see how things go!
Hello Caryn Moxey,
You have worked very hard to be in a good place; do not undermine your worth/value. You may be able to decrease prices somewhere but increase elsewhere to have balance so you do not lose revenue on the bottom line.
Competition may not be necessary if you offer a different environment which sets you apart. Try to be the solution to something that is missing at “your competition.” Free may not be the best choice.
A business manager may be the best person to contact right now.
Natalie aka NAPS 2 B Fit.
Are you running in the black now? I mean, are you profitable?
How easy do you think it would be to get the members to make up the $15,000 drop in direct revenue?
I like your idea of charging a competitive but higher than $5 rate for small group training, then reducing or eliminating the fees on your less specialized classes. You’re right, Zumba classes are a dime a dozen (and I’m a Zumba instructor) so it makes sense that your classes are small.
Do you have enough space in your group-ex room to accommodate the additional members you would need in order to be profitable with bigger but free classes?
Thanks for your input Sue and Karin… for the sake of more discussion I will answer your questions..
We have 3 trainers on staff and they also do small group training. We actually think we may be able to increase our small group training if the classes are free. The current class set up is more group oriented. $5 per class and taught by group fitness instructors like Zumba, Indoor Cycling, and Circuit classes. Our class members love it when we have bigger classes because they come for the class and the social aspect.
Did you do a member survey?
Yes we did, it is currently in process. So far people are afraid that we will increase our prices as well. But that is not the plan.
Did you get input from the current instructors? Have they signed on to that process?
I have not actually told them our plans, but all of them have expressed that the biggest hurdle for our small town is the stigma on fee classes. We are the only “health club” that charges at this point. But we started as a small personal training studio 10 years ago and built the health club 5 years ago.
What makes you assume that Y members may become members with you? We are becoming very much a community center and offer classes to ages 10 and up. We share many of the same client profiles except for the fact that we don’t offer childcare.
We have done several “bring a friend for free months” and “attend for free” weeks over the last 5 years in an effort to gauge response to a permanent change. We had great feedback with a small boost. But each time we try something like this people had the opinion that if it isn’t permanent they don’t want it. I spoke with several members that chose not to participate when we made classes free for a week. They said that if it wasn’t something they could maintain long term, they didn’t want to “get addicted” to the class and then not be able to go.
Bottom line… financially we can make this pencil. We have enough members and training clients that we can cover the group payroll for a few months as needed. But I certainly don’t want to take a pay cut that I created for myself after 5 years of hard work.
Thanks so much for your input, I look forward to hearing more and others experiences!