5 pricing mistakes that studio owners make and how to avoid them

9 min read
Learn how not to fall victim to these common pricing mistakes studio owners often make for their classes, memberships, and referrals.

Learn how not to fall victim to these common pricing mistakes studio owners often make for their classes, memberships, and referrals.

We often speak with studio owners who are trying to grow their businesses but don't quite know how. They run vibrant energetic classes, they are focused on building a community, and they want to welcome new customers to experience their classes and services. But when it comes to encouraging them to sign up or existing customers to refer new members, they usually fall into the same trap: pricing mistakes.

As you know pricing is a make or break and pricing your classes, services, and memberships poorly can be a detriment to your business's growth. Price them right, however, and not only will you see your business flourish, but you'll find customers who see the value in paying for what you offer them and will want to motivate their peers to do the same. You'll be familiar with this if you've read our pricing guide.

This article breaks down the most common pricing mistakes, how to avoid them, and how to improve on the pricing you currently offer new and existing members.

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Pricing Strategies

Mistake number 1: Should I increase my prices because I added a new class?

a coach and customer paying for membership

We've seen it time and time again. Studios price their memberships based on the number of classes they offer which often leads them to think, 'if I add another class, do I bump up the membership price as well?' And the answer is, it depends on:

  • how many classes are currently included in your membership plans as they currently stand
  • do you offer an unlimited amount of classes thus the opportunity to take another class means they will come to more classes
  • is the class you have begun to offer different in any way from the classes you currently offer or have you only added a new time and option for a similar class already on the schedule.

Considering these questions can help you determine whether or not you should increase your prices or keep them as they currently are when adding a new class. Your memberships are your revenue and your classes are the delivery mechanism. If you are doing more work for the same reward and your customers have more and more to take advantage of, it's worth considering an increase in price. But if the limit on classes doesn't change in your membership plan options, you might consider if it's necessary to change the pricing for what your customers already have access to.

Mistake number 2: Should I discount new members first month of membership to entice them?

Another very common mistake and one that can heavily impact your business especially when new members start rolling in is discounting new memberships as a way to encourage customers to get started. There are a few reasons why this can go wrong right off the bat:

  • new customers sign up and come to your classes paying a lower price
  • they then start determining the value of your classes and either think, 'wow these are excellent classes I wouldn't mind paying full price for' or to sum it up: worth it
  • or they go the other route and think 'I don't mind paying half off for these classes, but would I really want to pay full price' or to sum it up: I won't return next month

Essentially, when discounting your pricing and memberships, you really want to avoid giving your customers a reason to think they should be paying less than they normally would. Not only does it give them room to consider that there might be something similar out there for a lower price, but it discourages them to want to pay more for something they are already getting now for less.

Not to mention, it undermines the value for existing customers who can then start to think about the fact that they are paying full price for a service that others are taking advantage of for a much less price, regardless if it is only to win over new business. It confuses things, and if your memberships are already at a great value why complicate that by suggesting to new and existing customers that it could be less?



Mistake number 3: Should I discount existing members memberships to reward referrals?

Discounting existing members' memberships to reward them for referring new customers comes dangerously close to mistake #3. Customers do not want to be told that they can be paying less for their membership than they are already paying especially if that is dependent on them bringing in new customers to grow your business. It again confuses motivation to attend classes and be a member with trying to get people they know to come so they can save on their membership and ends up taking away from why they are there in the first place.

Disrupting your revenue for referrals is also a bad decision for cash flow for a number of reasons:

  • Not all referrals are your ideal clients and won't be right for you nor them
  • It's one thing to attend a class and decide you do or don't want to return, but if you don't retain that new potential member and they don't go on to sign up for a membership, your existing customer now gets a discount on their membership basically for free
  • Referred customers aren't loyal to you yet, you have to win over their trust which isn't always done after one class, it can take awhile
  • When an existing member shares with a friend or peer that by bringing them to class they save on their membership, that new customer although with the good intention of wanting to help their friend save and get a free class out of it at the same time, might not have any intention going into a class to come back

However, this isn't to say that you shouldn't reward customers for referring and encouraging new members to sign up. In fact, you absolutely should. A gift or something personal to say thank you is more effective and protects your cash flow. It shows you care about their business and their commitment to helping you grow.

Alternatively, if you are set on giving customers a discount when they bring in new members, consider rewarding customers with some credit only after their referral signs up for full membership. With this option, you have a better opportunity to increase your member list, keep customers happy and encouraged to grow your business, ensure the new members coming to trial your classes intend to come back, and you won't have to slash your prices to earn new valuable business.


Mistake number 4: Should I charge a very cheap drop-in rate to entice casual attendees?

Drop-ins are a trap for most class-based businesses. There is a constant battle that goes on between wanting to pick up casual fitness goers and keeping members happy. For most business owners, it's better to do without drop-ins entirely.

"But what about the people who don't want to commit to a membership?"

Dispensing with drop-ins is dispensing with low commitment. You can still create packs that allow more flexible usage but, importantly, these put the accountability on the customer to turn up. And it's not you who loses out when they don't. And it's better for them too. Don't allow them to create guilt about not turning up to a drop-in and then not want to come again. Or come back to you and ask to make up a class they were never 100% sure if they would even attend.

So, what if you do want to offer a single class pack to allow a drop-in?

Your memberships should still be the obvious choice for most customers. Price your single class packs at a level that raises the value of your memberships, not commoditises them into the ground. A single class attendance should not be your membership price divided by the number of sessions a member can come to.

Some large class formats do have cheaper rates, but you can still build this value into your pricing.

Here's an example model:

Single class pack: £8

Three class pack: £15

Three classes per week monthly membership: £50 per month

Any customer will do the sums in their head quickly and quietly think something like "if I go to 6 classes then the monthly membership pays for itself". And the three-pack is good enough value that it doesn't offend customers that need more flexibility.

And flexibility is what you are selling with single class packs. Don't undervalue yourself.

Mistake number 5: Thinking it's all about the money

Finding ways to entice and encourage members without making it all about money is your absolute best strategy. Your membership cost is not a big cost for most of your members in the scheme of their life - TV subscriptions, gas bills, mobile phone bill... everyone has a lot of costs. The key is to offer so much value and make your relationship with them so important that it's an absolute zero-decision from their point of view.

We don't decide to cancel our mobile phone contract suddenly because it's our link to friends and the world, and it makes us feel good. Your relationship with your customer is no different - it's about making them feel good in the context of their life, and providing a valuable social and self-actualisation connection that is a no-brainer for them to be part of.

When we focus on the money too much we take customers away from their strong connection and it undermines the good work we're doing. Money discussions should be infrequent and pain-free. Focus on the value of what you do for your customers, not how you can persuade them with money.

To sum it up

There is no exact science to pricing and it will be different for your business to the next to the next and so on. Finding a pricing model that will bring value to both new and existing customers, encourage their retention, and motivate them to refer their peers is the best way to grow your business without falling victim to common pricing mistakes.

To learn more about pricing your classes and memberships check out our guides:

Thanks for reading!

Find the perfect pricing
model for your fitness business

Pricing Strategies


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