Pricing 101: How to Set Prices for Your Hybrid Fitness Business
Last Updated on 2 August, 2024
Pricing your services is one of the most difficult decisions. Say your prices are too high, then your sales may drop. And, if your prices are too low, perhaps you won’t earn enough revenue. Now, you add a pandemic into the equation, and your members’ purchasing behaviors begin to change, too. After a year and a half of lockdowns and capacity constraints, many fitness studios and gyms have permanently adopted a hybrid fitness business model—a combination of in-person and online services.
Despite the success of hybrid classes in attracting clients throughout the pandemic, many fitness clubs continue to suffer from financial instability. Industry sales have fallen 58% since 2019, and 17% of clubs have been forced to close permanently. To stay afloat, many fitness studios are raising their prices as they attempt to find a new pricing strategy that works for their clients and their hybrid business model. On average, small studios have raised their prices by 20%.
There are many factors to consider when determining prices for your hybrid fitness services. For those studios still trying to navigate their pricing structure, read on. We’ll discuss the steps you can take when setting your prices to drive membership and revenue growth for your business.
Consider your current pricing structure
Before updating your pricing strategy, begin by auditing your current membership plans and pricing schemes. As your studio has adapted to include hybrid classes, your list of service offerings has likely expanded.
The following is an example of what your current membership and pricing structure may look like.
| In-Person Classes | Price | Price per Class |
| Drop In | $20 | $20 |
| 5 Class Pack | $65 | $13 |
| 10 Class Pack | $110 | $11 |
| Unlimited Monthly Membership | $90 | ~ $7.50 |
| Intro 30-day special | $50 | ~ $6.70 |
| Livestream Classes | Price | Price per Class |
| Drop In | $15 | $15 |
| 5 Class Pack | $60 | $12 |
| 10 Class Pack | $100 | $10 |
| Unlimited Monthly Membership | $80 | ~ $6.70 |
| Intro 30-day special | $45 | ~ $3.75 |
| On-demand | Price | Price per Class |
| Single class | $12 | $12 |
| Unlimited Monthly Membership | $75 | ~ $6.25 |
| Hybrid | Price | Price per Class |
| Drop In | $12 | $12 |
| 5 Class Pack | $75 | $6.25 |
| 10 Class Pack | $110 | $11 |
| Unlimited Monthly Membership | $90 | ~ $7.50 |
| Intro 30-day special | $45 | ~ $3.75 |
Layout all the options you offer to clients and consider whether this variety makes sense. The goal is to find the sweet spot between too many options and not enough. Offering too large of a selection can often overwhelm clients and deter them from joining your club. Whereas few options may prevent you from satisfying the needs and desires of a large client base. For your hybrid business, it’s best practice to offer 3-4 options for in-person, 3-4 options for livestream, 1-2 options for on-demand subscription, and 3-4 for your hybrid/full access membership.
Analyze historical data
To understand what membership and pricing structure you should use, analyze your past data to determine which classes and membership options have the most and least sign-ups.
Using your business management software’s reporting feature, you can determine total sales from each pricing option and download your attendance reports.
Say on average you earn approximately $65,000 in sales per month, your results may look something like this:
| In-Person Classes | Price | Average Annual Attendance | % Total Sales Revenue |
| Drop In | $20 | 20 | 0.62% |
| 5 Class Pack | $65 | 15 | 1.51% |
| 10 Class Pack | $110 | 15 | 1.51% |
| Unlimited Monthly Membership | $90 | 155 | 21.65% |
| Intro 30-day special | $50 | 35 | 2.75% |
| Livestream Classes | Price | Average Annual Attendance | % Total Sales Revenue |
| Drop In | $12 | 30 | 0.56% |
| 5 Class Pack | $30 | 20 | 0.93% |
| 10 Class Pack | $55 | 18 | 1.54% |
| Unlimited Monthly Membership | $54 | 222 | 18.60% |
| Intro 30-day special | $30 | 50 | 3.72% |
| On-demand Classes | Price | Average Annual Attendance | % Total Sales Revenue |
| Single video class | $12 | 25 | 0.47% |
| Unlimited Monthly Membership | $75 | 125 | 14.55% |
| Hybrid | Price | Average Annual Attendance | % Total Sales Revenue |
| Drop In | $12 | 30 | 0.56% |
| 5 Class Pack | $75 | 20 | 2.33% |
| 10 Class Pack | $110 | 15 | 2.56% |
| Unlimited Monthly Membership | $90 | 150 | 20.90% |
| Intro 30-day special | $45 | 75 | 5.20% |
What’s the solution?
Based on these results, you can see that the in-person, hybrid, on-demand, and livestream memberships pricing options are by far the most popular with your clients, as they create the bulk of the monthly sales. In contrast, drop-in classes tend to be less popular.
To optimize your pricing, you could consider eliminating some options under each category that don’t perform as strongly as the others. If you eliminate the low-ticket and low-attendance options, you could use strategic pricing to instead encourage clients to commit to monthly memberships.
Similarly, you could consider slight price increases in some high-performing categories to boost your revenue without discouraging attendance.
Consider your per client expenses
After analyzing sales and attendance data, go in and look at your studio’s overhead and expenses to get an idea of your total costs. Compare what it costs to host a single client in an in-person class vs. a virtual class.
Your results may look something like the following:
| In-person | Virtual | |
| Instructor Fee | $20 | $20 |
| Rent | $60 | $0 |
| Insurance | $3 | $0 |
| Utilities | $2 | $0 |
| Equipment | $6 | $0 |
| Software | $0 | $15 |
| Accessories | $0 | $5 |
| Total | $91 | $45 |
Once you understand the various costs per client, you can adjust your virtual class fees to 40-60% off your in-person classes to balance out what you no longer provide. As per the previous example, if a monthly in-person membership is $90 a month, it makes sense to price your livestream membership at $54 (60% of the in-person cost).
Knowing all your costs will also help you determine profitability for each class type and identify those that are most lucrative to your hybrid fitness business. Comparing profitability to your attendance and sales data will help you isolate the service offerings most valuable to your business and those you could afford to do without.
Keep capacity in mind
Although your in-person capacity may not yet be at pre-COVID levels, that does not necessarily mean your revenue has to suffer. Let’s say before the pandemic 200 clients purchased monthly memberships at $120 each, for a total of $24,000 in revenue.
Even if the pandemic halved in-person monthly membership sign-up, if you could encourage 280 clients to sign up for a livestream membership and 160 clients to sign up for hybrid membership, you would exceed pre-pandemic membership income.
In-person memberships 100 clients x $120/membership $12,000
Livestream memberships 280 clients x $54/membership $15,120
Hybrid memberships 160 clients x $90/membership $14,400
Total: $41,520
With the flexibility of hybrid and livestream classes, your studio can significantly increase capacity and service a larger group of clients at once. Strategize correctly, and your revenue does not need to suffer.
Use your pricing structure to achieve industry growth
As restrictions ease and clients become familiar with virtual fitness, it’s anticipated that the virtual fitness industry will experience a compound annual growth rate of 30.1% until 2026.
To capitalize on this growth, clubs need to find a pricing strategy that works for their clients and their business model. Analyze your data by reviewing reports and sales trends, attendance records, and your current business expenses. Equipped with this information, you can set prices for your hybrid studio in a way that provides value to clients while still turning a profit.
Now that you’ve strategized your pricing structure, do you have the right software tool to help manage the rest of your hybrid fitness business? WellnessLiving’s all-in-one platform supports you with automated marketing, livestreaming and on-demand services, class booking software, payment options, advanced reporting, and much more! Book a free, no-commitment demo today to learn more.
