The Unlimited Membership model for class based businesses has been an amazing revenue generator for many years now. As a customer you feel a status connected to being a member and can benefit from many perks or benefits associated with the membership. From the business standpoint the unlimited membership offers recurring revenue where you only have to sell once and then work to retain the customer through your service offerings and great customer service.
The unlimited model now has a different look and feel. For the customer it may mean too much commitment and does not offer the value it once held. For the business it can mean less revenue per visit at a time when each spot in class is prime real estate. Does the unlimited model have a place still? Yes for the virtual offerings where real estate is not at a prime. However for the in person offerings businesses can start to shift away from the unlimited model.
What can be done to move away from the unlimited model?
Option A: Make Gradual Changes
1. Change the membership for new customers. Current members can keep their unlimited status but new customers can only purchase memberships that have limited visits- 8 or 10 per month.
2. Limit the number of unlimited memberships. Perhaps you still want to offer a few unlimited memberships. This would make a great Black Friday deal where you offer twenty unlimited memberships for example. Figure out the number that suits your business and limit the unlimited crew.
3. Allow unlimited virtual but limited in studio. Your contract can have an unlimited pricing option for virtual and a limited pricing option for in-studio. This combines the best of both worlds.
4. Reduce your menu options. Large class packs of 20 or more visits should be eliminated. They reduce the visit per revenue and take away from memberships. Offer an intro offer, drop in, one class pack of 5 or 10 and a couple of membership tiers.
5. Increase your drop in rate. This increase helps to drive customers to your other pricing options and increases the value of your new limited memberships.
Option B: Change your entire business model at once
1. Switch to the credit membership. This is a model where classes have different values- (3 credits, 5 credits, etc) This means you get more revenue per visit and do not lose revenue from unlimited super users. While this is a huge transition it is a great way to increase revenue for prime time slots. The customer has the flexibility to choose how they use their credits. To learn more about the credit system check out Setting up the Credit System.
2. Limit the number of visits for unlimited members. Use this restriction with caution. Making changes to a current customer's membership can be a risk and needs to have the right messaging to ensure you do not have cancel culture hit your studio. This may be as simple as restricting to one visit per day so that super users do not take advantage of the in studio offerings. Before implementing a restriction in the system it would be best to have conversations with those who are attending too often or booking many spots and then cancelling. This only affects a small handful of users versus all of your members.
3. Change the number of visits in the pricing option. The system defaults to 99999 which is not a realistic number. Change it to 30 for a one month period. Over time you could reduce it to 28, 25, and so on. To determine the best starting number tag your unlimited members from the membership report and then run the attendance analysis report for a 30 day period, tagged clients only, filtered by client in detail. This will show you the frequency individuals are visiting in a 30 day time frame and you will see the super users in your facility. If you offer virtual classes you may also need to filter by in studio classes only.
Whether you choose to transition slowly or rip off the band aid and transition quickly it is important to know that any of the above changes can move your business in the right direction. Change is messy and you can never please all of the clients. With the correct message and tone along with a good rapport this can help to ease any transition for your customers.