The pandemic has changed how we view our daily routines, and with people working from home, the fitness industry is evolving and the hybrid business model, a combination of in-person and online services, is here to stay. According to Allied Market Research, the global online and virtual fitness market is expected to reach $59.23 billion by 2027. That works out to be a compound annual growth rate of 33.1% from 2020 to 2027.
A hybrid club or studio means you’re adding to your recurring revenue streams as you build a gated, subscription-based library of fitness videos to complement your in-person memberships. In this article, we explore three benefits of this business model.
Add Value to Digital Services
From Netflix to Spotify to ClassPass, subscription-based monthly service platforms are now the norm, growing by over 350% since 2012. Once you build it, it’s giving clients access to hundreds of on-demand fitness videos. The catch is the service needs to add value, or you risk clients choosing a competitor. It’s more than just a service you’re offering, it’s an experience.
Create a platform that delivers something clients won’t get in-person. Your digital platform allows you to personalize your videos and organize them to help clients obtain their goals. For instance, develop a journey, providing downloadable guides to let subscribers track their workouts as they follow along to your weekly workout sessions, then suggest more advanced video libraries to subscribers after they’ve reached their goals.
Restructure Fees, Increase Revenue
Why is the price different for your in-person and virtual memberships? Consider what it costs to offer your in-person services (i.e. rent, instructors, equipment, etc.) versus your subscription-based services. Adjust your fees 40% to 60% of your physical offer to balance out what you no longer provide. If your in-person membership is $130 per month, you’d price your subscription-based memberships between $52 and $78 per month.
This structure provides additional revenue for your business, letting clients subscribe to your virtual platform or as add-ons to in-person memberships.
With your digital platform, how can you seem like you’re there without actually being there? You need to preserve your client relationships by creating a loyal, thriving community that ensures subscribers don’t cancel their memberships.
To do this, you must support your members, keeping your services top of mind. Send texts and emails with daily workouts, bring your community together with a weekly video chat and encourage clients to share their progress on social media. A rewards program also boosts loyalty by letting subscribers earn points after viewing videos and reaching goals.
The pandemic has made the fitness industry more resilient. A hybrid, subscription model adds a recurring revenue stream — while maintaining your in-person memberships — so your business can continue to thrive.