With all the minor changes and development of 1% improvements, you could be seeing much more significant growth with the right pricing strategy. This should not be a race to the bottom or a budget option (which many online platforms consider their services as). Not only should you be pricing your workouts, classes or programmes accordingly, but you should also consider the role of your community and ancillary experiences that go towards making a real impact on each members health development.
Here are some ideas that will get you earning more money from each member and increasing your profitability.
‘Your First Month Free’
Whether it’s a week, two, or a full month the free trial has become the go-to offer to entice members to try out fitness platforms in the hope of converting them into fully paid members.
Discarding the savvy consumer jumping from platform to platform utilising these deals you have a good model to show what your service is all about and the experiences they can engage with to develop their health.
Changing behaviours takes a few weeks and building habits a month, so this system works in connecting the user to your services on a deeper level. A simple and clear payment (monthly/annually) is an easy way for the member to value the impact of your services and focus on their goals.
But this free offer into a monthly subscription does have its drawbacks and limitations. Your CLV will have a limited range — if you price your online service at £30/pm then the most you can earn off each customer in a year is £360.
To operate this style of membership or fitness-as-a-service model, you need to be approaching every new month like you are winning each customer back, even if they have been with you for years. It maintains the emphasis to improve the value of your offering and avoiding repetitive and uninspiring services that result in cancellations
The subscription model is designed to help the customer ride the wave on their new commitment to their health development through an inspiring entry challenge. Excited to reach new heights for their health your challenge can have focused outcomes for each participant and show them exactly what it means to be a part of your community. Adding more structured coaching and targeted development in beginner areas you will have better control of their initial journey, ensuring their growth.
By holding some elements back that are part of your main services you create an exciting next step to becoming a full member paying a high rate than the initial entry challenge
When building out your subscription model it is wise to have a small group of prices with different value components available to the customer. There is though an emphasis on ‘small group’- don't overwhelm customers with too much choice. This is usually based on the depth of coaching and level of personalization. Put simply, the more direct attention provided to the member the greater the price.
This provides you with both range to encourage inclusivity and depth to provide up-sells when the member sees the opportunity to further commit to their health. This works in contrast to many offerings being priced to low to encourage uptake or too high to try and reflect a superior service, often putting potential customers off. The tiered subscription allows members to enter where they need value most and then grow within your brand to desire greater personalisation and coaching across their health requirements
Low Cost + Add Ons
This is all about the ethical upsell. The quality of your services and depth of coaching available will entice members to spend more money on their health as they see the success it brings them. It is a ‘take it as you need it’ model which provides ultimate flexibility.
The same principle applies with more substantial experiences with high profile coaching. Selling experiences as tickets allows the member flexibility to engage with the experience that matter most to them on top of the base membership services. Add ons sold externally also encourages value first lead generation and new member acquisition
(Re)Building Your Subscription Model
The major difficulty with starting a pricing strategy is ensuring it will work long term. What is needed is scalability, ensuring that you don’t upset your customers by changing things around.
If you’re looking to upgrade your pricing strategy it is important to consider —
Communication — Walk your customers through your reasons for change and make it clear that they are getting a good deal from it.
Offers — Utilise deal and offers to reduce the psychological impact of a perceived price increase
Value First — Often adding to your model is the most agile way to ensure its success. Make upgrades to the current price points before adding more advanced prices.
If you are looking to explore greater revenue potential from your subscription model reach out and we’ll find the best solution for you.