The Boutique Fitness Studio Stampede
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Publisher's Note: Our friends, Stephen Tharrett and Mark Williamson, Founders and Principals of ClubIntel, a health and fitness club industry research firm and consultancy, recently released an in-depth Whitepaper Report on a subject that affects all in the health and fitness club industry: The Boutique Fitness Studio. Given the depth of research provided and interpreted into key insights, we felt this a worthy report for reprinting in Club Insider. With their permission, we presented Part I of their report in our November Edition. Now, for the conclusion with Part II.
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Pricing Approaches and Price Points for Boutique Fitness Studios
When the fitness studio market first emerged on the fitness landscape, its approach to pricing was like a ride back in time where drop-in pricing (pay-as-you-go) was the predominant approach of fitness operators. The pioneers of the fitness studio industry saw drop-in pricing and bundled visit pricing (purchasing more than one visit) as both a means of differentiation from the traditional club industry and as a way of appealing to the purchasing behavior of young consumers. Fast forward to today and fitness studio operators continue to take an innovative approach to packaging and pricing their offering. So, what are these innovative packaging and pricing approaches?
Pay-As-You-Go (PAUG) - The PAUG approach works on the principle that consumers should only pay for what they use or plan to use, rather than pay for a full month of unlimited access when that is not their intention. The majority of fitness studios continue to use the PAUG approach, offering single-visit pricing and bundled-visit pricing. The most common PAUG offerings are packages of five visits, ten visits and twenty visits. Some studio operators, such as Barry's Bootcamp and Soul Cycle, offer PAUG packages of up to 50 visits.
Traditional Subscription Membership (TM) - The traditional membership subscription model (what most traditional health clubs use) is built on the principle that a consumer should pay in advance for unlimited access no matter how often they use or intend to use the studio. This approach is favorable for operators as it offers a more predictable cash flow than the PAUG approach. Earlier this decade, there was a surge in fitness studio operators offering a monthly subscription. Brands such as Exhale (barre and yoga) and Core Power Yoga include these TM offers in addition to their existing PAUG packages, often as a means to demonstrate greater flexibility to consumers and to generate a more predictable cash flow for the business.
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