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Pricing: Determining the Right Value for Retention


Price often influences perception — and when it comes to your club’s pricing structure, it’s important to create a perception that encourages retention. Consumers care about price as well as quality — and by setting your price point too low, you run the risk of damaging customers’ perceptions of the value your studio offers. By setting it too high, you risk losing customers to the next best-priced competitor.

Regardless of whether your goal is to attract new customers or to encourage existing ones to visit more often, it’s important to find your pricing sweet spot. And while your club likely serves a wide range of clients — from first-timers to loyal regulars — your pricing should always promote retention.

The Inverted Pyramid of Pricing

Think about your pricing structure from a customer’s perspective — it’s reassuring to know there are options to choose from. But, according to a study1, giving customers too many options (often referred to as the “tyranny of choice”) can actually demotivate consumers. The ideal number of options typically falls between three and seven. Consider starting with an inverted pyramid pricing model, which features three distinct pricing categories, from lowest to highest price:

Intro Offer. Winning over new customers is the first step on the road to retention. Remove the cost barrier to entry by allowing first-timers to try your club for less in the form of an intro offer — approximately 50 percent less than your next pricing option. The goal of the intro offer is to entice new clients, giving you the opportunity to make an outstanding first impression and convert them into returning customers at a higher price point.

Autopay Membership. The best way to convert new customers into regulars is an autopay membership program. Memberships are recurring payments for your services that automatically charge on a regular basis, rather than paying for individual classes or sessions each time they visit your club. Contracts can be set up to renew monthly for unlimited sessions, or when a current number of sessions in a purchased package is used up. The autopay membership should be perceived as the best deal for your services on a per visit basis — encouraging returning customers to get the best value.

Count Per Session Card. The count per session card — sometimes referred to as class cards, packs or passes — should be your most expensive and least prominent pricing option. These options are designed for more sporadic customers or those who are uncomfortable with recurring billing. While this is less likely to encourage retention in comparison to autopay memberships, it will still encourage your clients to return on an as-needed basis. If you offer a drop-in/single session option with no commitment required, this should be your most expensive option by far. Better pricing should be seen as a reward for those who can and want to commit.

Look for a software system that can easily implement and introduce offers, store your membership contracts and automatically charge customers on a recurring basis — ultimately helping to streamline your pricing options and save you and your staff time and effort.

Roxanne Borger is MINDBODY’s director of client education and leads the MINDBODY University (MBU) program. MBU hosts 3-day conferences around the world featuring high-impact business education for MINDBODY clients. For more information, visit mindbodyonline.com.


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