Clicky

6 Keys to Growing Your Fitness Business by Selling Memberships

Thursday, October 31, 2019
-
Fitness Business

Setting up a recurring membership plan for your customers can be an essential step in growing your fitness business. You’ve worked hard to create classes people love and get results from. Why not give them – and you – a way to build on that momentum? 

Memberships reward your regular class visitors with a pricing deal and an incentive to keep coming back for more. Selling gym memberships rewards you, as an owner, with a reliable and predictable source of revenue.

Memberships can build loyalty, community, class size and word-of-mouth referrals -- priceless success metrics for most fitness studio owners and instructors. And for fitness professionals on a budget, selling gym memberships is a great way to market your business without paid advertising.

What's not to like?

“A full class generates more excitement than a small class. And so if there's more people attending on a regular basis, I'm going to grow my business,” said Laura Bunker, owner of SupaChick Fitness in Cokato, MN. “If they're coming through the doors three times a week or four times a week, and they’re getting this great deal - ‘cause they do the math too, and they’re like, “this membership is a steal!” - then they’re telling their friends. And so my clientele is always growing.” 

But creating and selling fitness studio memberships can have pitfalls. Having the right studio management software, and setting up your gym membership right from the beginning is critical. 

One of Bunker’s most regular students is a “very vocal” 72-year-old, who’d paid for a whole year of classes up front. That was before Bunker set up a membership option in Punchpass (check out how to set up a membership program in Punchpass here).  When her (admittedly tech shy) student’s annual pass expired, Bunker was nervous.

“I said ‘I said I'm going to email you a link and you can buy it right there. Trust me, it's easy!’ She came to class the next day and she had done it all by herself,” said Bunker. “She was high-fiving me, like, ‘I did it all by myself!’”  

Wanna get some high-fives going with your customers? Here are 6 keys to growing your fitness business with memberships:

Price Your Membership Appropriately from the Start

You must price your membership right to avoid undervaluing your services and your regular punch cards. But you should also be careful not to overcharge when compared to your competitors.

If you’ve already got solid sales with your drop-ins and regular passes, start there with your current pricing. Then look at the average number of times your regular customers attend in a month (you can do a quick calc in Punchpass by calling up the Attendances by Date Range Report and dividing the number of monthly attendances by the number of customers who attended a class that month). These two nuggets of information will help you calculate your best membership rate. 

If you've set your prices appropriately, your pricing tier will start with the drop-in rate as the most expensive. Then you'll give a slight discount for a small punch card (say five classes), and a slightly higher discount for a larger punch pass (say ten classes). Your biggest discount will be for the unlimited, auto-renewing membership pass. 

For example, Core Power Yoga, the nation’s largest yoga studio chain, figured out that the sweet spot for attendance among their students was twice a week, or eight times a month. Using the guidelines we laid out above, if we take their single class drop in rate of $22 and multiply it by eight, we get $176. The company’s five-class pass is $104; it’s ten class pass is $194. It’s monthly membership is $109, a substantial savings off of the ten-punch pass, and just five dollars more than five classes. This allows staff and instructors to ask customers one simple sales question to help guide them in their purchase: How often do you want to practice? If it’s twice a week or more – the frequency recommended most by fitness and yoga instructors to maintain health, strength and wellbeing, the membership becomes the obvious choice. 

Once you’ve identified a target price for your membership, check out your competition and honestly assess where you stand. If you offer more value through services, quality and amenities, charge more. If you offer less, perhaps fewer class times and a simpler facility, charge less. Resist the urge to compete on price. It’s hard to increase your prices if you’ve set them too low, and it’s usually a losing proposition in the long run. We know you’re awesome, and you work hard. We want to see you build value and gain loyal customers who will pay you for what you are worth!

Add Value Wherever You Can

A great way to generate fitness membership sales is by rewarding your customers for their commitment with perks and value adds. Some easy and popular options that also increase your opportunity for upsells are discounts off special workshops, trainings or events. You can even host members-only mini-workshops or events as a VIP offering, and make your best students feel extra special. This also generates curiosity and FOMO among non-members that may spur them to sign up for that monthly membership offer. If you rent towels or sell merchandise, you can also offer a small discount off those products and services. A free t-shirt with your branding is another great way to welcome and reward your new members, build community and loyalty, and get your marketing out into your community without spending a whole lot. 

Make Your Membership Month-to-Month. Clearly Outline the Terms 

There are a lot of different studios out there, from gyms to martial arts, to dance, Pilates and yoga. Small towns and big cities. One-man shows, and big chains with tons of staff. You know your market and your audience best, so keep that in mind. What we know is that most of us are hesitant to commit to long-term contracts. The most popular fitness studio memberships are month-to-month and give students a clear and easy way to suspend or cancel when needed. 

To protect yourself legally and financially, and to avoid confusion with customers, you need to make sure you're clear about the terms of your memberships.

If you sell your memberships online, your studio management software should automatically ensure you are collecting and conveying all the necessary details (though you should make sure to include your cancellation policy in your membership description).

If you need to sell your memberships without a tool like Punchpass, your written contract should include:

  • Client’s first and last name.
  • Start date (easiest way to set up is the date of purchase)
  • Terms (for example: the contract is for unlimited sessions and automatically renews every month until paused or cancelled. Include client’s permission to automatically bill their credit card.
  • Credit card information. 
  • Cancellation policy (see more details below). 
  • Client signature field.

Incentivize New Students with a Deal Tied to An Introductory Offer

New students aren’t likely to commit to a membership right out of the gate. But by including a pricing incentive inside your introductory offer you can hook a lot of new members who’ve loved their first taste and are still excited and hungry for more.

For example, a lot of fitness and yoga studios offer new students a heavily discounted unlimited monthly pass to try their classes out. This offer is typically deeply discounted at 50% or more off the cost of a monthly membership (so make sure to limit the sale online to once per customer!).

Once you’ve won over your new students by making a great first impression (read “How to Get a New Customer to Come to a Second Class), leverage that energy and excitement with a time-sensitive call to action for your membership. For example, offer new students a discounted membership if they sign up before their introductory month ends. For example, you can offer your $100/month membership for $90/month if they sign up before their trial month ends.

Or you can put all your cards on the table and bring new customers in the door by offering an all-in-one option using a free trial period for memberships -- so you can give new folks a complimentary taste of what you offer while delaying their first membership charge. This eliminates the need to ask your newest customers to make follow-up decisions after their trial period.

With the right studio management software, incentives are easy to set up and track. 

Make sure that you don’t get in the habit of negotiating discounts and deals. Your membership and special offers, if priced right, are already a screaming deal, and are just enough to reward commitment and loyalty. Stick to your prices, and resist the temptation to give a reluctant student deeper discounts. People talk, and you don’t want to undermine what you’re worth!

Have a Clear Cancellation Policy and Enforce It

This is one of the most important factors to implement when selling fitness memberships. Being organized, clear and firm from the start will save you substantial time, stress and money in the long run. Make sure your cancellation policy is in writing, and your customers can review it up front before they commit.

If you’re in a super competitive market you may want to allow your customers to cancel without advanced notice, and without paying the remainder of their month. If you can, ask for 30 days advance notice, so you can avoid bargain shoppers who skip over your drop-in and punch cards to get one cheap month, and then bail. Be sure to give your customers easy to follow instructions on how to cancel. Do they need to email you or your manager? Submit a form through your website? Can they leave you a phone message? Avoid allowing students to give verbal notice, especially to non-owner instructors. It’s too easy for these requests to get lost of forgotten, creating customer service slips.

Managing Credit Cards and Recurring Payments

It’s super easy to set up recurring payments through your studio management software (read more about Punchpass memberships and collecting recurring payments with Stripe). And having clients on recurring memberships means you spend less time transacting as students come for class. You’ve also got more security in calculating your bottom line and projecting your financial future.

However, managing memberships means managing bounced, lost and stolen and cancelled credit cards. So having a plan, and the right software in place to handle collections is key. Your time is valuable and you’re at your best when you’re with your customers, not bogged down chasing after long-overdue payments.

The best studio management software supports you with simple, easy to read reports showing you which customers have active, suspended or cancelled memberships, how many memberships you’ve sold and which customers’ accounts have become delinquent (see what to do when a membership is unpaid). Punchpass emails you when a customer’s credit card has been declined so that you can be proactive in handling the issue. 

It’s never fun to have to reach out to a customer who owes you money. Our best rule of thumb is to always assume positive intent, and start with a friendly email (you can email a customer right from Punchpass), followed up by a phone call if you don’t get a response within a couple of days. Having a saved script can save a lot of time. Something like: “Dear Customer, Ooops! We missed your last payment. We don’t want you to miss a single awesome class with us, so please double-check your billing information and update it if needed. Thank you!” You can also include a link so they can update their card online quickly.

A concerned phone call asking your client if their credit card was lost or stolen is another graceful way to reach out and be respectful of students who might be experiencing financial troubles, or who, unfortunately, might have cancelled a card to get out of honoring their membership terms.

The Bottom Line: Memberships Are a Win-Win

Laura Bunker is convinced: "My people LOVE the memberships!  I literally did it out of necessity because I just didn't want to think about 'what if my classes are small this month -- maybe I won't be able to pay my rent.'  I didn't like that kind of flux in my income. But I didn't realize how much they would love it."

Memberships can transform your business. They're a win-win for you and your customers! 🙌