Internet Middlemen and the Fitness Industry
Bonus Article: ClassPass
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Bonus Article: A Deep Dive into the Value Proposition of the Market Leader - ClassPass
ClassPass has a dual brand promise. The first is the consumer promise built around offering incredible convenience, the flexibility to work out at a host of great studios or clubs and do so at below market pricing. The second is the promise promoted to club and studio owners (partners) that involve increased brand presence and brand recognition, increased consumer traffic, potential to garner high quality regular clients, incremental revenue growth, and finally, professional development for studio leadership. So, let's take a look at how well ClassPass delivers on its promises to consumers and studios.
1. The consumer promise. ClassPass does an excellent job delivering on its consumer promise. First, they offer convenience and flexibility. Consumers can go online and reserve space at over 7,500 studios (typically several hundred in a given geographic market) and typically at a time that is convenient for them. Since ClassPass gives studios the flexibility to manage which classes ClassPass members can use, many studio operators limit the number of classes (black-out classes) they open up to ClassPass members that, in turn, may reduce the convenience and flexibility of the program to some consumers.
Second, the price is an incredible value. A month of access is anywhere from $79 to $125 a month, and for most markets, will be in the neighborhood of $99. If you take IHRSA's 2015 Health Club Consumer Report data that shows the average boutique member visits their studio 80 to 117 times annually (7 to 10 times a month), it equates to a price of $9.90 to $14 per visit. This is significantly less than the average price charged by boutique studios according to AFS' 2015 Fitness Studio Operating and Financial Benchmarking Report, where the average reported price charged by studios for unlimited access to group exercise classes was $111 a month and $159 per month for small group training classes. Furthermore, the charge for a single group exercise class or small group training class, according to the AFS report was $24 and $34 respectively.
As the numbers reflect, consumers pay considerably less using ClassPass than if they go directly to the studio (cost per visit could be anywhere from $10 to $20 less using ClassPass). In an August 31, 2015 article that appeared on Mindbodygreen.com, the author highlighted 10 things only ClassPassers understand. One of those was, "Paying the regular fee for a class not on ClassPass seems insane." We have to give ClassPass a score of 9 out of 10 on delivering their consumer promise with the only thing preventing it from achieving a 10 being the fact that many clubs and studios limit class availability, which may be perceived by some consumers as limiting the program's convenience. If class availability erodes, then it may become harder for ClassPass to effectively deliver on this promise to consumers.
2. The partner promise. The promise to studios has several elements, so let's look at each separately and ascertain how well they are delivering on each:
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