Setting the right price for group classes can feel like an important task – too low, you risk cheapening your offer, too high – will anybody come? Finding a price that is fair, that covers your costs and that attracts your clients is stressful but here is the thing – varying the cost of your classes by a couple of dollars one way or the other probably won’t impact your sign-up rate much.
There are so many factors to consider when setting up a price and it needs to be fair not just for your clients, but for you too.
Pricing your services should always be based on market research – see our blog post on that here – so that you can see what types of prices are working for other wellness professionals in your locality. And while this is a good benchmark, don’t feel the need to price-match or even undercut other local businesses; selling your services too cheaply can backfire, so try to resist the urge to be the budget-friendly option.
As well as research, you need to assess your overheads. What regular costs are you paying out? Perhaps you pay rent on bricks and mortar space or pay your monthly fees for online services (website, Zoom, wifi), as well as your liability insurance, fuel costs, and any hardware/software or accessories you need to teach. Knowing the details of your overhead enables you to see how much you need to earn per class as a minimum, and work from there to plan how many classes you need to teach to cover those costs.
The length of your class should be a consideration too – a 30-minute session should be cheaper than a 75-minute session, and how to differentiate that price is all down to you and the rate that you need to earn to cover your costs. Let’s take a look at the most common pricing structures for group classes:
Sliding Scale
Using a sliding scale, or a pay-what-you-can class has really grown in popularity since the start of the COVID-19 pandemic. This is a great alternative to the ‘shall I offer a class for free’ question – it makes your classes accessible, it shows that you are compassionate about your client’s affordability brackets, and listening to our users at OfferingTree, it’s been a successful way to keep teaching throughout the pandemic when incomes have been lost, budgets are much tighter but connection through classes is more important than ever.
Drop-In
This rate should be attractive to clients but slightly more expensive than your other pricing points. Drop-In allows total flexibility for your clients to come to class when they want to, but for you as the business owner, you don’t have the insight into how many clients will turn up for class, and whether (if you have a low turnout) you can cover your overheads for that class.
If a client likes flexibility in their attendance, then you really want to steer them toward the class pass option below, to get more bang for their buck.
Multi-Class Pass
Cheaper than a drop-in pass, offering good value and flexibility of attendance is the multi-class pass. This pass is ideal for anyone not quite ready to commit to a monthly membership, but who likes to come to class fairly often.
From a revenue perspective, you want the client to work their way through the pass fairly quickly to maintain your income stream; a client that buys a 5 class pass and takes two years to use it up isn’t going to help your business stay afloat. So keep classes varied and encourage a commitment to regular practice with ideas like challenges, building community and making class a self-care time that they want to return to. Also, be sure to impose an expiry on the class pass if you do need it to be used within a certain timeframe.
Memberships
If a client wants to attend more than one class per week and is a loyal and dedicated customer, a membership can be a great way to go and can be a steady recurring income for you. You can also offer additional bonuses to your members such as access to online videos on your member site, discounts on other services or products and other sweeteners to reward their loyalty and increase the value of the membership.
Having a membership means you get a regular payment each month from that client. Taking a look at your overheads, you can then figure out how many memberships you need per month to break even on your overheads, and how much profit you can make. So membership is the most solid financial income for your business however it does take work to maintain your relationship with that member. You need to nurture the client relationship, adding bonuses for members and keeping your class content varied to retain their interest – and their membership.
For a price point, consider how many classes per month a client would realistically attend, and make that the price. So if two classes per week are realistic, price a monthly membership at 8 classes per month, and that encourages the client to come more often to class, establish a good habit, reaping the benefits of that regular practice and getting great value for their membership.
Here are some other points to keep in mind when creating your pricing structure:
- Have a clear cancellation or refund policy that clients can easily read on your website; this saves a time on potential misunderstandings.
- Including waiver signing in the payment process can be savvy (there is the option to do this built into your OfferingTree site) as chasing waivers after sign up is time-consuming, and they might fall through the cracks in your admin system.
- Post prices clearly on your website. Visitors want all the info right there, with a call to action, otherwise they might click away.
- Review your pricing annually. Set yourself a goal to review pricing once a year, and it doesn’t hurt to let clients know that this happens. It keeps your market research fresh and reassures clients that they are getting value for money.
- Consider using a payment processing service such as Stripe or Paypal – this makes accepting payments easier, and fees can either be absorbed by you or the client.
Looking for a way to simplify your registration and payment process for your community-based classes or services? Our software for wellness professionals includes the ability to easily offer discount codes or donation-based payments. Come learn more at an upcoming live demo.
