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?
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!
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.