How to Increase Studio Revenues During Covid-19
| May 12, 2022
In the wake of the pandemic and heavy restrictions in 2020, the fitness industry has changed drastically over such a short period. But this is not a time of despair. The boutique fitness industry is expected to be worth $22.1 billion by 2022, up 4.63% from its pre-pandemic levels of $21.1 billion in 2019. As with any time of great change it is also a time of great opportunity if we prepare correctly for the currently changing trends. “Fail to prepare, prepare to fail”.
We at Bsport along with many of our clients have identified some of these current trends to increase profitability and have compiled a list of them for your benefit. We hope to share these trends with you in the hopes of helping you increase your business profitability.
Several methods can be used when trying to increase the profitability of your business in the fitness industry post-covid.
As we now know, increasing the marginal value of a studio's classes is to be expected by clients after such strict lockdowns. Developing a pricing model which helps the gym profit whilst also keeping clients happy, is crucial at this period.
Another method is limiting the number of future bookings for unlimited passes. Certain gyms and boutique studios offer unlimited classes to some of their higher-paying clients. While this is beneficial for recurring revenue it can sometimes be counterproductive as certain classes are more expensive and have a big demand for them.
In this modern tech-savvy generation, the use of a hybrid studio model is almost crucial for a business’s survival. Strategies like a mix of in-person classes and online streamed classes.
The process of upsells towards clients that are interested in classes within the studio or gym is a proven method of increasing studio revenue.
Increasing your studio's marginal value
Increasing your studios' marginal revenue is probably the most important factor when it comes to increasing your overall profitability. There are various methods to do so and all of them require you to reflect and analyze what way your business is currently operating. To increase marginal revenue you usually either have to up prices or cut costs. But perhaps there are ways to do so using the resources you already have. This includes analyzing how you manage all of your variable costs and activities as the manager/owner.
Pricing structure change can be hugely beneficial for expanding your takings throughout the day. Things like giving 50% off to your most unpopular class times and charging your regular higher price for your more popular time slots is an effective way to spread your revenue throughout the full day, in turn not making you dependent on any particular time or class. A similar business type that implements this strategy is the cinematic industry which charges separate fees for movie times.
Payroll is another way to increase your revenue. Incentivising trainers and teachers to make an effort for their clients to show up more frequently could be done through a bonus structure implemented for how many people show up. This is almost like your employees taking on a sales role by putting more effort into their classes and enthusiasm towards clients meaning they and the studio can benefit more.
Space utilization can, like time management, be an excellent strategy to use the physical resources and space you already have. Perhaps rearranging equipment in a studio or gym to create space for new equipment. And also the rearranging of class locations and sizes so that there is no a need to create more space or turn away clients. Rather lean towards the solution of trying to utilize existing space as efficiently as possible.
The final thing to increase marginal revenue and perhaps bring new clients into your business is to conduct online and physical surveys with your existing clients if there are any improvements that they would like to see.
Use of the hybrid studio model
The integration of online training and teaching practices along with in-person classes is vital in this modern tech-led age. Especially post covid when there is so much uncertainty between lockdowns and restrictions. A strategy most of our clients are implementing is the integration of zoom classes and recordings into their business model. The value of monetizing zoom classes and recorded studio content is monumental for providing a new revenue stream for formerly brick and mortar studios just focusing on in-person classes and training. Along with the introduction of a new revenue stream, this process of transitioning to the hybrid online/in-person model is very easily outsourced and pain-free as it provides more availability to clients who previously had to work around strict class schedules.
Upselling clients through e-commerce practices
Upselling through modern e-commerce practices is an excellent method for gyms and studios to increase their profitability. Unlike the implementation of the hybrid model, it doesn't introduce a new revenue stream but rather helps maximize the sale of the products you already have. This would include merchandise, passes, and memberships that the gym or studio in question offers.
The method of upselling through e-commerce practices comes into play by creating a page or online store for your products and services on your company's website. Once the store and products are available the true upsell comes during the customer journey. When a client tries to book a class, which will likely be the primary function of the website/app, the prompt to buy products and upgraded subscriptions during this process has proven to be a method to substantially increase sales and profits.
In these are some of the trends and methods that we at Bsport Solution have noticed and received feedback on from our clients. Implementing these strategies is at first sometimes challenging, but hugely beneficial when the process starts to give studio and gym owners huge noticeable returns. If you wish to know more about implementing these strategies into your business model with our help, feel free to contact us here at Bsport where we would be more than happy to guide you through the process pain-free.