In a multi-activity fitness club, many factors need to be considered when choosing your business model.
Your revenue model is critical but you also need to consider:
- External environment (competitive environment, market fragmentation and potential catchment remaining)
- Existing value proposition (what you offer for your membership and what is part of your core product mix). Consider if your cycle offering is something your staff recommend (or should recommend) to meet most member needs? Or, do you have a core of products to meet your members’ value needs, and cycle is just an optional alternative?
- Internal environment – Is your gym at capacity or do you have room for more members? What other competing programs do you offer against cycling? Are they included in membership or add-ons?
There is no black or white answer. Without an in-depth analysis of these elements the temptation may be to consider a ‘pay-per-class’ model.
There are some very specific circumstances where this may be appropriate, for example if your club meets one of the following sets of criteria:
- Your membership pricing is considered to be at the low end of the market and cycling is not part of your core value proposition
- You have a big membership, a small studio (and therefore a small supply capacity) and a solid take-up of your cycling offer. In this case, charging a booking fee specifically for your peak time classes and rock star instructors might be the right model
- You have no more growth potential in terms of membership and attendance, and the only way to generate further income is via secondary revenue.
In all other circumstances, which is the vast majority of case scenarios, multi-activity clubs should strongly consider including the cost of classes in their core membership. You might decide to increase your fee by an a few extra dollars, but still offer maximum financial benefit.
The financial benefit to the club through increased engagement of your member base, and its subsequent effect on retention, will outweigh the financial benefit of the ancillary revenue from charging per class.