Are Fitness Aggregators Helping or Hurting Your Studio Growth?
There is no getting around it. The boutique fitness industry has changed forever with the introduction of 3rd party booking tools and aggregators. For better or for worse, existing and up-and-coming brands are having to adapt to a customer who is told, “You deserve access to discounted classes.” We are all consumers and we all like a great discount as much as the next person. But when it comes to the brands you love, the brands you are passionate about—you’re willing (and in fact pretty happy) to pay the full price.
Question: How many times in your life did you discover your favorite gourmet food brand, your favorite sports apparel brand or vacation destination because of a special offer?
Answer: “Not many!”
That’s not to say that when your favorite brands are on sale, you won’t spend more money with them. But that is a different business and brand strategy. Read more about price differentiation strategies here.
Consumers Expectations and Your Brand—Which Comes First?
Consumer expectations, preferences, and habits have been changed by aggregators. For savvy boutique brands, 3rd party booking platforms provide access to a new customer base. This helps fill classes and increase brand awareness. In the vacations’ industry, you can find 5-star vacations on 3rd party sites at prices you would never find on the hotel’s website. Indeed, discounts on 3rd party websites or apps can help boutique studios and gyms. When they have unused inventory they want to sell this is a valid way to get extra dollars into your studio.
But if careful thought isn’t applied to why and how 3rd party bookings are used, aggregators can quickly dilute a boutique entrepreneur’s brand. What is the brand story you are cultivating? What are your goals for creating a loyal Tribe who come to your boutique gym religiously? And financially if 3rd party bookings are overused, the revenue they will bring in will be a fraction of regular bookings. Low revenue plus a diluted community will push away your loyal customers.
What Is Bifurcation? …You Got Into The Boutique Fitness Industry for a Reason.
Self-imposed discounting threatens to damage the “boutique-ness” of your brand. In fact, over the last decade, the fitness industry has seen a bifurcation between low-cost and premium offerings, stretching the mid-priced operators’ ability to make a sustainable profit. As the group fitness matures, you need to pick a lane and stay in it. Of course, every market is different. Your city, country, demographic, competitors won’t be the same as others and all this will inform how you succeed. But ultimately if you are a premium boutique your business strategy and growth will be predicated on the success of your brand and a loyal tribe.
The Three Rules of Discounting Like a Boss
#1. Don’t put discounts on your doorstep
Your website is your brand’s digital doorstep. Do you want your front door to be “on sale”? Or do you want it to be the doorway to an experience? One where your class attendees can step away from their work and life pressures to enjoy a third-place. A sanctuary that they feel good about investing their hard-earned dollars in because the class will improve their overall wellness; and will be a beautiful, sophisticated experience.
Any discounting should live on third parties. ClassPass and other aggregators are similar to Expedia. If you look at the Four Seasons Hotel website you’re not going to see big discounts. Four Seasons is cultivating its brand and is engaged in a dialogue with its target market on its website. Sure, you may find some value-adds, “exclusive offers” and other perks. But mostly you’ll be soaking in the stunning imagery and aesthetic of their facilities.
The same goes for boutique fitness. You want your current and future clients to have the opportunity to feel like they’re a part of something special. They work hard and this is how they pamper themselves. Give them the opportunity to invest in this act of self-care. Maybe they can even pick their favorite spot in the room (be it a bike, mat, or bench) and pre-order a protein shake for after!
#2. Limit, Limit, Limit
Think about whether customers coming to you via an aggregator, should only get access to a limited number of classes per day. Or a limited number of spots per class. What kind of classes will you give them access to? These could be off-peak classes, classes taught by new trainers, or classes with a long history of consistently low-attendance. They could be your premium classes too so you get the word out there but if those are appearing on 3rd party sites…you want them to be scarce and in high-demand too.
Since 3rd party booking customers provide you with a fraction of the revenue your loyal clients pay for a single class, their booking experience will inevitably be different. The digital journey will be different. Pre-ordering cleats or gloves won’t be possible. The frictionless check-in of your regular customers will not be the same. These are all good things because in all consumer-service industries there are tiers of experience. Be it flights, car rental, spas, etc. And if you train your staff you can actually use this to your advantage to help convert customers who come in via an aggregator to have a better experience the next time.
Sophisticated studios might set up their schedule release to be available to clients first then aggregator users (perhaps even days later).
Remember to skew the direct bookings to aggregator user ratio within a specific class in your favor as much as possible. To achieve this end we recommend setting per-class limits on the number of aggregator users within a specific class. There is no rule for what the ratio should be. But if discount users represent more than one-third of a classes attendance you may need to restrict the number of spots.
3. Diversify Your Client Portfolio
Think of your client-base like you would a stock portfolio. You basically are aiming to put most of your shares into a stable part of the market and some into a risky part. You may take a loss on those risky investments at first but you only need to get lucky once to justify it.
While aggregators bring the added benefit of free advertising to a wider audience, they still come at a cost. They are risky because users are also exposed to all the other competing studios that participate. Most importantly, these users diminish the class experience and your brand. This is because they are discount hunters so your value proposition will never be enough to convert them. Even worse, we have seen instances where aggregator users brag about their unbelievable discount to clients after class.
Remember, your brand is sacred and to access the fitness temple that is your studio a recommended donation is non-optional. Do you haggle over the price of a new iphone with an Apple Genius? Consumers will get used to the fact that there is no elasticity in your price and your brand will be better for it. At the end of the day, your strategic revenue growth will come from your loyal clients.
In Summary
Aggregators and discounts can be used effectively for inventory and to bring in additional attendees to maximize capacity. But if left unchecked it can damage your business and dilute your brand. We’ve known studios whose client-base is almost entirely sourced from 3rd party booking platforms. They have accepted the fact, lowered their prices, found less expensive instructors, and generally lowered overhead. They let the aggregators determine the value of their classes. Once that decision has been made, it is almost impossible to go back.
Take all this into consideration when deciding why and how to use aggregators and if you decide it’s a net positive to use them, take steps to ensure you build a customer base that will be loyal to your brand and that you can grow your tribe. And beyond aggregators: focus on your brand and sustained revenue growth in other ways—through referrals, loyalty building campaigns, guest invites and more.
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