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3 Ways Fee-based Loyalty Programs Benefit Fitness, Wellness, and Beauty Businesses

By Chris Beer

If I ask you to pull out your wallet, there’s a good chance that you’re carrying a membership card for Costco or another warehouse club. According to Costco’s 2020 annual report, there are 105 million Costco cardholders—consumers who pay $60 or more each year for the right to spend more money at a store. The behavioral economics that has made Costco a success is at the core of any paid membership program, and I believe that it’s time for every fitness, wellness, and beauty business to consider incorporating a fee-based loyalty program.

After a 20-year career in finance, I began to work with fitness and wellness owners to help them make data-driven decisions that propel their organizations forward. A large number of my projects are related to pricing strategy. Numbers are my thing and I’m definitely known as a mathlete, not an athlete. As studios began to reopen for in-person classes after the shutdowns, many businesses struggled with how to organize their pricing options, given that so many things changed in the last year. I like to remind owners that intelligent pricing is so much more than a numbers game, and it’s essential to be nimble with your pricing strategy.

One example of a pricing strategy that excels at both attracting new clients and bringing old clients back to your business is a fee-based loyalty program. Here's how a fee-based loyalty program can be a powerful way to build your brand and drive more profits.

What is a fee-based loyalty program, and does it work for my modality?

Fee-based loyalty programs can resemble traditional loyalty programs with just one small catch: a participation fee. This can take the form of a one-time membership fee or a recurring subscription. Different from your standard recurring limited or unlimited membership, a fee-based loyalty program does not give the client a set number of credits or services. The loyalty program grants the holder access to enticing benefits, such as discounted pricing, early access to certain services or bookings, and other perks.

Here are several examples of fee-based loyalty programs in thriving fitness, wellness, and beauty businesses:

Fitness: bodē nyc (single location, New York City, NY)

Mid-2020, bodē nyc launched their All-Access Membership, which grants their hot yoga enthusiasts a variety of benefits, including priority 10-day booking, 25% off in-studio packages, 15% off all merchandise, and unlimited live stream classes. Their fee-based loyalty program is sold on a monthly basis, at a price of $89/month. With the non-member price of a 10-pack at $310, a monthly 10-pack user will nearly recoup the cost of their membership with one purchase.

Wellness: Restore Hyper Wellness (150 locations in the US)

Restore Hyper Wellness calls their paid loyalty program “Your Gateway to Hyper Wellness.” While Restore’s wellness services (whole body cryotherapy, PBM, infrared Sauna, compression) may be purchased without a membership, Restore members receive up to a 40% discount on the retail price of services. Their fee-based loyalty program is sold on a monthly basis, at a price of $35-50/month, depending on location and number of people on the membership (individual vs. family).

Beauty: Mario Tricoci Spa and Salon (13 locations in Chicago, IL)

Mario Tricoci’s Wellness Club Spa Membership is billed as “a one-time annual purchase that pays for itself with just two services.” The $50 annual membership unlocks discounted pricing on facials and massages, with savings of $25 per service.

Why does a fee-based loyalty program benefit your business?

A 2020 McKinsey survey on loyalty programs found that fee-based loyalty programs generate value by changing customer behavior in 3 ways:

  • Increased interaction: 43% of survey respondents said they make purchases from a brand more frequently after joining a fee-based loyalty program

  • Brand loyalty: 59% of survey respondents said they are more likely to choose a brand over its competitors after joining a fee-based loyalty program

  • Higher spend: 62% of survey respondents said that they spend more on a brand after joining a fee-based loyalty program

How to set up a fee-based loyalty program in your Mindbody account

Contracts are a way to automatically charge your clients for services or access to your business on a regular basis. It removes the manual labor from billing your clients for services and is a great way to bring in a steady stream of revenue.

To set up a fee-based loyalty program in your Mindbody account, follow the steps in this support article to set up your monthly or annual program. If your fee-based loyalty program includes access to discounted pricing, follow the steps in this support article to set up pricing options that may only be unlocked by your fee-based loyalty program holders.

Why should you implement a fee-based loyalty program this year?

After the pandemic shook up our routines, a fee-based loyalty program can help bring clients back to your business while demonstrating value to new clients. Learn more about fee-based loyalty programs and ways to strengthen your business' pricing strategy on B.Well Consulting’s blog.

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About the author:

Chris Beer

Chris Beer

Mindbody Certified Business Consultant

Chris Beer is a management consultant for businesses in the fitness and wellness industries. She lives in Chicago with her husband, two children, and a mischievous puppy. After a 20 year career in finance, Beer became a Mindbody-Certified Business Consultant to further her ability to help fitness and wellness owners make data-driven decisions that propel their organizations forward. Driven to be humble and helpful, Beer’s consultancy, B.Well Consulting, works with small businesses to create efficient processes and gain a better understanding of what drives their revenue. As a well-respected thought leader in the fitness and wellness industry, Beer is a frequent content contributor to Mindbody, FitGrid, and Boutique Fitness Solutions webinars and blog posts. With a strong passion for philanthropy, Beer donates 10% of her annual consulting income to nonprofit organizations that support access to literacy, physical activity and mental healthcare. 

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