Like it or not, your business has had to change as it has moved into the digital era. To keep winning in the yoga space, your pricing strategy will need to change as well. Every Yogapreneur wants to run a successful yoga studio that is capable of changing people’s lives for the better. But if your pricing is “off”, it can get in the way of your sales, and ultimately achieving your dreams.
In order to keep up with the times, you’ll need to optimize your pricing strategy for the digital era so that your pricing works for your business, instead of against it.
Moving your yoga business into the digital era
Even before the pandemic, we were moving into the digital era, so most businesses had to rely on their digital offerings because of restrictions and lockdowns. This includes yoga businesses too.
Whether or not your yoga business has digital offerings, the eyes of your audience are on the digital space more than ever before. So the way you communicate your offerings and pricing has to be done in the right way, both online and in-person.
Your business can now have 2-3 different product lines:
- VOD (video on demand)
It’s important to get clear about the purpose that each product serves. This will help you to price them, sell more yoga, make more $$, and ultimately, change more lives. After all, that should be the main goal of any yoga studio.
In-person classes are generally the main product line of a yoga studio. You should aim to keep the pricing structure of your in-person classes fairly simple and easy to understand.
There should be minimal options, making choosing one an easy thing to do – rather than overwhelming potential students with too many options, they simply decide to choose none. Your in-person classes should be the keystone of your goal membership i.e. your number one bestseller and the ultimate goal for any client.
Livestream is generally thought of as a complementary product. It helps to increase the perceived value of a goal membership. Your all-inclusive membership should include this offering and can be combined with VOD for clients who would like to sign up for your online membership.
While Livestream is a valuable added extra, it’s not generally a keystone offering.
VOD (video on demand)
VOD can be a complimentary added extra or a product that acts as a stand-alone. It is also a huge value add for those who opt for your goal membership (all-access membership). It gives you the opportunity to down-sell or upsell as needed – if someone can’t afford your goal membership, suggest your online membership.
VOD should be part of your retention strategy. Rather than losing members during tough times, simply downgrade their membership until they can afford to be an all-access member once again. Video on demand is a great product to combine with your live stream to create an “online membership”.
Why is it time to optimize your pricing?
Your yoga studio more than likely has a few members that are still paying “legacy rates”. These were rates that were implemented before the pandemic hit. Optimizing your pricing now is important to survive as a yoga studio, you need everyone to be paying you what your product is worth.
Most people are buying online before their first class. This gives you the opportunity to tell them what your goal is for them (becoming an all-access member) and allows you to be upfront about what your different products cost.
With the costs of running a yoga studio every year increasing, it’s important that you are making sure that you are covering those costs by increasing your prices. Inflation also plays a huge part in this.
If your studio is running at a decreased capacity (or may have to during the future because of lockdowns), you need to make sure that you are still earning the right amount per session – which does lead to an increase in the cost per class.
Old pricing principles that still apply today
- People don’t buy your pricing, they are buying the benefits that your product offers
- Your pricing should promote the behavior you want – a regular yoga practice
- Don’t compete with yourself (having too many options, or options that are too close together in price)
- Competing with your competitors based on price is a “race to the bottom” – you should rather be competing with the value and experience that you provide
- Value wins over price
- Policies and terms are often more important factors than price – people will often opt for the option that allows for less commitment, even if it comes at a higher price
- You should have significant jumps in “price per class” – this aids in not competing with yourself (your goal membership or all-access pass should offer the best price per class rate and this should be made clear to your clients)
- Avoid analysis paralysis – try not to present too many options. People will not purchase anything or will opt for the lowest commitment option simply because they’re overwhelmed!
- Funnel toward 1 option per client group, with a maximum of 7 pricing options (even less is better)
Out of the box ideas that fit in the digital era
- Sell drop-ins (Livestream) – while this is not optimal for creating new clients, it might help your members to practice more regularly when they can’t make it to the studio
- Low monthly subscription w/ self-cancellation for VOD members – to keep students who move out of the area, or gain members in a different geographical area
- Self-cancellation – less admin (easy for member and studio)
- Market to outside your geographical area (VOD and Livestream)
- Weekly memberships – to create flexibility and allow new clients to test out your studio
- Eliminate everything but memberships – if you are looking to streamline your business
- Direct to autopay – you could offer a discounted first month
- Annual autopay for a discounted monthly rate
- Credit-based system – purchasing credits that can be used to pay for classes or watch online for fewer credits (this allows you to charge more for classes that are often busy and less for classes that tend to be quiet)
Optimizing your pricing for the digital era
While you may think that the digital era means the death of the all-access membership (because those members are paying so little per class), that doesn’t necessarily need to be the case. As long as you are pricing it correctly. Members shouldn’t be paying any less than $10 per class (absolute minimum) – if you start working with this figure, your studio should still be able to run optimally.
The digital era does require Yogapreneurs to reanalyze their pricing structure to make sure that it still makes sense for the times. Ideally, you want to make sure your business is profitable while still offering great value to your members! Need some expert advice on how to optimize and update your pricing? Book a free strategy session here!