Re-evaluating your Pricing Structure (with Teresa Zanardelli)
Guest Post by: Mindbody Certified Business Consultant, Teresa Zanardelli
A note from Connie: Hi folks, I’m excited to welcome Teresa Zanaredelli to the blog today to talk about pricing your services post-covid. This is a hot topic for many studio owners I talk with and there’s no one better to give us insight than Teresa. Not only is she a Certified Mindbody Business Consultant, but she is a former yoga studio owner so she knows exactly what pricing challenges you’re coming up against. Enjoy!
Chances are, you’ve made some changes in your studio recently. The pricing landscape has certainly changed with many studios adding virtual options to their schedules, and making changes due to reduced capacities. You’ve had to pivot and pivot fast, and now as we are settling to the new normal with pricing and offerings it’s time to re-evaluate.
There are many different components of a pricing structure, here are some points to consider when evaluating yours.
1 - Make it easy to understand for your clients
it’s recommended that you have a 3 to 7 pricing options for in studio classes. As you add other types of classes (live streaming, on demand) you want to keep that number closer to 3. While you want to give your clients options, too many choices can overwhelm clients and actually lead to fewer sales.
There are three categories of pricing options:
Intro Offers – allows clients to sample your services at a discounted rate (usually 50% discount), giving you a chance to get them to fall in love with your studio and become regular members.
Autopay Memberships – allows clients to pay a flat fee for unlimited services. This is your best option for retaining clients and stable revenue.
Class Count Packages – allows clients an option with no commitment, or less frequent attendance. These should be your most expensive per class pricing options.
Since many studios are offering both in studio and virtual classes, a good rule of thumb is to offer only 1-2 pricing options for each category max.
2 - Use past & current attendance trends to influence your pricing decisions
Pull reports to calculate your client’s average number of visits/classes per month. If your average client visit per month is 3, you don’t want to have a 15x per month membership on your pricing menu. Sure you’d like for all your clients to visit 15 times per month, and they would really reap benefits if they did. But you need to price services in a way that fits your client’s behavior patterns.
3 - Ask yourself “What do I want my clients to do?”
If all of your clients are purchasing drop in visits then that is because your drop in is the most attractive pricing option for clients based on the way your pricing is currently structured.
Decide which pricing option you want your clients to purchase (usually autopay memberships) and then develop pricing and a sales process to direct them there.
Example – Put it all together
Here is one example of a simple pricing structure. Of course, increase or decrease the dollar amounts according to your studio’s demographics, but keep the proportions the same. This example is for a studio offering in studio + livestream classes.
All Access Intro Offer $49 for 30 days of unlimited classes (in person + livestream)
All Access Autopay Membership $120 / month for unlimited classes (in person + livestream)
Autopay Membership $100 / month for unlimited classes (in person only ~$12.50 per class)
Autopay Memberhsip $60 / month for unlimited classes (livestream only)
10 class pass $160 (in person only - $16 per class)
Drop In $20
Don’t rush, plan it out.
Take some time to plan out your pricing strategy. Clients look for stability in their yoga or fitness studio, so you don’t want to change pricing too frequently. Hire a consultant for help, or do your research (and math) to develop a solid plan that you know you can stick with.
About the author
Teresa Zanardelli is a Certified Mindbody Buisness Consultant, E-RYT® 500, and YACEP®. She specializes in helping health & wellness business and studio owners with pricing structure, sales process, retention, staff management and customer experience strategies – all resulting in business success and growth. Teresa work with clients one-on-one and facilitates operational training in group settings for owners and their teams.
Learn more at https://www.teresazconsulting.com/
