A Lesson On Pricing for Yoga Studios
One of the highlights from MINDBODY University is our class on pricing. We often hear from yoga studio owners that they don’t know how to price classes, worry that classes are priced wrong, or want to raise prices, but aren’t sure how or when.
In our class on pricing, we go over these questions, as well as dive deeper into the reporting side in the software to make sure everything is running smoothly for your business.
Here's just a brief overview of what we discuss at MINDBODY University.
1. One-time and low-session packages should be expensive:
Keep your pricing simple! Studies show that if you have more than 7 options, customers won’t make a decision. Too many pricing options create confusion, indecisiveness, and reduced sales. If this is not what you already have implemented and you want to transition, keep online prices the same and raise prices at the front desk. Keep the pricing you are getting rid of in MINDBODY business mode (that’s the side you see) and take it out of consumer mode (the side your clients see). It's okay to make changes slowly but remember: if you're close to full capacity in your classes, you should be raising the prices.
2. Memberships and high-session packages should be perceived as a “great deal.” They'll actually make you the most money:
An autopay or membership is any pricing or package that's set up so there is recurring revenue every month or when the package runs out. And most businesses (Pilates, dance, yoga, personal training) overprice autopays, so only high users purchase it. Your autopays will increase revenue because they increase the average number of visits as they encourage more frequent attendance. (Read our guide on How to Build a Membership Program that Drives Recurring Revenue for more tips on autopay programs).
3. Your clients will always purchase the cheapest/lowest-commitment option so don’t make that the one-time option! If you encourage your clients to purchase low-commitment packages by making them the best deal, they'll come less often over time.
You need to price your autopays so that your average user (both medium and high users) purchases it. If autopays are a better deal than your other pricing options, or a “great deal,” they'll be purchased more frequently than your one-time and other low-commitment options (which you'll now price more expensively).
4. You want your clients to buy high-commitment pricing options that make sense for them, as this allows you to earn the greatest potential for revenue for the lifetime of the client.
If you're at low capacity, price it on the cheaper side and more people will buy it. If you have a lot of competition, price it on the cheaper side. If you’re at full capacity, make it more expensive. Clients will only buy a membership if it makes sense and they know how often to come. So your price will determine the average attendance for your membership.
5. Don’t look at what your competition is doing. They are usually doing it wrong.
There are always exceptions to this rule, of course. If your neighbor is a brand-new health club with a spa and only charges $100 a month, I wouldn’t suggest charging upwards of $125 a month. You want to bring in new clients to your business, too, or your revenue will go down. Be careful if you pay your teachers/instructors by the head—as your classes/sessions get bigger, your payroll will go up. In general, you should have a pay cap or a flat rate.
Remember, if classes/sessions are too crowded and you're at capacity, raise the price. If it isn’t selling, lower the price or improve your sales process. Have sales targets, contests for your teachers and staff, or implement a sales position. You must educate your clients on why they need to come more often. It should be part of your overall message.
Reach out to members who aren’t coming in and get them back. Offer to schedule them into classes, send them a “we miss you” email, or suggest a private appointment to increase motivation.