When the pandemic closed our doors, gym owners quickly rebooted into survival mode. We supported our members, shared online workouts, and offered at-home coaching. We were either activated or paralyzed. Your business likely changed in many ways, and so did the way you do business. You may have realized that limited memberships were needed to survive.
Why would you continue to run your business the same way you did before? We aren't living in the same world, and we've learned so much. One thing we couldn't replicate during the pandemic was the power and energy of a group workout. A zoom class didn't cut it.
When we finally got back in the gym (and unfortunately, some countries are still unable to), we made some changes. We had to change the way we operated to cover the cost of doing business.
Top 6 Reasons Why Limited Memberships Work Well
- You can calculate the cost per member
- It educates new members on how often they should train
- Motivates members to train consistently
- Members are less likely to late cancel or no show
- You can reward members with class credits
- You have an opportunity to grow
Cost Per Member Calculation
The pandemic forced all gyms to operate with a smaller capacity. If you offer limited memberships, you have to charge more per person to support your expenses. Limited memberships makes sure you are making money for each spot in your class —whether the member is there or not.
Start with looking at your data. The PushPress Core system has a Check-in Metrics Report that will show you a quick list of how many times your members attended class during a specific date range. Look back at each month and get an average number of check-ins per user. You might be surprised by the data.
You can do some quick math to figure out how the expense of each class (your expenses/number of classes). Using your class capacity, you can figure out the minimum value per person. For example, if your expenses are $5,000 and you have 60 classes each month, the cost of each class is about $84. If you have a class capacity of 10 people, at a minimum, you need to charge $8.40 per person to cover your expenses. Of course, you will want to set a profit margin and raise that cost per person.
Let's say we want to make about an 80% profit, so we set the price per person as $15 or $150/month for a 10 class/month plan. I'm not a super math wiz, but those are some quick calculations to make sure your business makes money. You'll want to factor in other things like how many members you have and how many total spots you have for the month because not all classes will be at capacity.
Take a minute and run some numbers. Then, set your limited plan pricing accordingly. I recommend using pricing strategies like price anchoring and having a 3 tier model as well.
Educates New Members On Training Frequency
When new members join your gym, they may be new to fitness — or just getting back into it. If you offer limited memberships, it will hint at how often they should expect to train and relieve some anxiety about getting started.
Show a new member a set of limited plan options that hint at how often they should train.
- 8 classes/month
- 12 classes/month
- 16 classes/month
When clients see these options, they think through their weekly schedule and map out their routine. You could also set your plans to limit classes by the week, but a monthly plan allows for a little more flexibility.
Motivates Members To Train Consistently
Limited memberships will help you members set a schedule for their workouts. We know that creating a habit will lead to more consistency which leads to better retention.
Unlimited plans might be a good selling feature, but it's best for members who are athletes or are already in the habit of working out daily.
Members will invest more when they know the value of each class. If you have a limited plan with 3 classes each week—you're going to try harder to get to those 3 classes.
Members Less Likely To Cancel Reservations
If you have unlimited classes, clients can always come another day, but every class counts with limited memberships!
Your classes should have a reservation window to allow time for your coaches and members to prepare. Members aren't always motivated to follow policies, so many gyms started charging a late-cancel fee. With a limited plan, the class credit is in the members' hands. If they cancel in time, they keep the credit. If they late-cancel or no-show, they will lose the credit.
Every spot in class counts and one fantastic feature the PushPress Member App has is a class waitlist. Members will be more motivated to cancel their reservation in time when they know they will lose a class credit if they don't. And when they cancel, someone from the waitlist will get in!
Appropriate booking and canceling classes will keep your classes full and your members happy.
Membership Rewards: Bonus Class Credits
Running contests or rewarding members for referrals is a great retention tool. When you have limited memberships, you can use a class credit as a reward! Here are some ways you can reward your members with a class credit:
- A special birthday credit (Pro Tip: set up a plan for this, automate a birthday email, and include a link to the landing page for them to claim this gift.)
- Contest awards
- Referral reward
- Perfect attendance (use all your class credits for the month with no late cancels or no-shows and get a bonus credit for the next month)
- A bonus for completing a survey
- A reward for giving a review
- Bonus classes for members who volunteer to help in class
Class credits are cheaper to give away than a discount. Yes, they do hold a monetary value, but you are also engaging your member more by giving them another chance to train!
More Opportunity To Grow
Giving away everything with an unlimited makes it harder to increase prices and provide more value. You can create new plan options that include more class credits for a higher membership payment. When you decide on a price increase, you can increase the cost of your current members and offer them more credits than new members.
- Your old pricing was 8 classes for $110
- Your new pricing is 8 classes for $120
- You can offer a special option to your current members: 10 classes for $120
You can increase the price of your current paying members AND provide them with more value. If you decide on setting up a new membership strategy that uses limited memberships, it doesn't mean you can't have an unlimited option—just make sure it's at a premium price. Whatever you decide on, make sure it's right for the mission of your gym and your members' needs.