Transitioning to Tiered Memberships
Choice. Everyone loves having the opportunity to choose for themselves, rather than being told what to do, and deciding on a gym membership should be no different.
Over the past few years, a lot of gyms have begun offering tiered memberships to give their members more options — a business transition your club may be considering.
Chad C. Waetzig, the executive vice president of marketing and branding for Crunch, said offering tiered memberships can be beneficial for clubs.
“Having tiered or multiple membership options is all about providing choice for the member,” said Waetzig. “Without choice, you may be turning away prospective members without knowing it.”
Prospective members drove Marcus Trusty, the owner of Peak Fitness in Buena Vista, Colorado, to begin offering two-tiered memberships at his facility.
In 2017, Trusty added an indoor climbing gym as part of Peak Fitness. The addition allowed the brand to work through the needs and desires of existing members, in addition to new customers the climbing gym hoped to attract.
“It’s been very successful to us because it allows people to still be a fitness center member and then add on an additional service if they want to,” said Trusty. “And then it still allows them to drop that service and continue to be a fitness center member at different times of the year.”
However, transitioning to tiered memberships came with its challenges.
One of the roadblocks Trusty faced was trying to find a correct pricing structure to maintain the value of his existing product, while still increasing the price point to accommodate the business investment it took to build the new climbing facility. He overcame this challenge by researching the surrounding area rates of competition, and adjusting to that price point.
“By staying within that price point and including everything we have, we kind of flipped the table, so to speak, where we’re looked at as more of a value, while still being in the same realm for price,” explained Trusty.
The second biggest challenge Trusty faced was trying to simplify a tiered membership for marketing purposes. He tackled this by keeping his plan simple.
The first tier of membership only allows access to the fitness center. Members can choose from an individual, group or family membership. If members want to add on climbing and move up to the second tier, they add on a flat-rate, per-person charge. This way, if one member of the family wants to climb, but the rest don’t, they’re only adding on the charge for that person, versus the entire family.
Not only did this plan help with simplicity, it also went over well with existing members. Trusty explained long-term members did not see any rate increases when more options were added, creating a sense of goodwill from the customers.
Waetzig agrees that simplicity is key. “You cannot effectively promote all of your plans in an advertisement,” he said. “Focus on the most popular [services] — get people to the gym to check you out. Then leverage your in-club experience to showcase your membership offerings, features and benefits.”
Some other advice Waetzig offers to clubs considering this route is to know your market, target audience and competitors. Design the membership structure so you can meet the needs of the majority of your customers with a few plans. “But don’t go overboard — too many plans or pricing that isn’t transparent puts you at risk of driving away prospects,” he warned.
Lastly, Trusty offers one more tip for thriving at tiered memberships: feedback. Listen to feedback from members, especially when trying something new or adding a new service.
Trusty wants club owners to ask themselves, “How are members interpreting it? How are members using the service? Is it how we intended, or do we need to take that feedback to change something to better fit their needs?”
For Trusty, feedback is key to tiered membership success. “I think there’s a lot of value there,” he added. “Being the owner and being on the floor talking to people and just listening to what they have to say is key — making adjustments where feasible.”