There’s been a lot of debate recently about online offerings, and specifically what the pricing strategy should be for these moving forward. With gyms around the world having offered large volumes of online content for free during lockdown – and with plenty of fitness influencers continuing to do so – can a price tag really now be applied? How will that go down with people?
These challenges notwithstanding, our view is that online content can’t be free forever – that it has to be monetised. But what are the considerations when doing so?
The starting point, of course, is to have a white label platform – such as the Wexer Web Player – where you can own and monetize the experience. Once those foundations have been established, you might like to consider the following five questions.
#1 – Are you adding your own content?
The value a customer or prospect sees in your online offering – and with it the price they will be willing to pay for it – will be directly impacted not just by its quality but also by its uniqueness.
How bespoke is your online offering to your brand? Are you offering an experience people can’t get elsewhere, all packaged up in high production values? Are you producing your own content, with signature programming led by rockstar instructors who don’t work for anyone else? Is the experience customized to the member, with recommendations based around their habits and needs? If so, you’ll be able to charge more than if you’re offering only third-party produced content – however good that third-party content is.
#2 – Will you offer digital as an add-on?
One option is to view your digital offering as an add-on and price it as such. While an easier change to implement in the business, this is probably the harder conversation to have with your members. You’ll need to be ready for questions from members along the lines of: ‘Why are you charging me for something I’ve enjoyed for free up til now?’
If this is nevertheless the route you choose to go, note that we’re seeing US$3–US$10 a month emerging as the typical price range.
#3 – Are you incorporating digital into new membership tiers?
Our advice is that offering digital as an add-on will limit your creativity. Far better to take a step back, view all facets of your offering as one coherent ecosystem and adopt a fresh approach to pricing – one that combines digital support and physical attendance into new membership tiers. The more a member pays, the more personalized the service becomes online and the more human elements there are to the offering.
#4 – What proportion of your memberships will have digital built-in?
If you adopt a tier-based membership structure – and especially where members commit to contracts – you once again have predictable revenue where the digital element of your offering is concerned.
If digital is built in to a large proportion of your memberships, not only are you providing an all-important hybrid offering to as many members as possible – something that will be critical to retention and recurring revenue moving forward – you’re also maximizing the yield of your digital offering.
#5 – What is your digital-only offering?
Will you adopt a different pricing structure for those who aren’t members of your physical facilities? Will bundled tiers of membership in-club mean those buying into more of your services effectively pay less for digital (even though it isn’t broken down that way) than those who opt for digital-only?
Or will you see the huge, non-geographically restricted potential of digital – with minimal additional cost to roll out at scale – as justification for a comparatively low digital-only price tag?
For more information, please contact us at info@wexer.com