Ultimately, boutique fitness businesses are hospitality businesses. From marketing strategy to the service experience, here are a few key items that studio fitness owners can learn from the hotel industry.
It’s all in the (marketing) mix
Which marketing channels are you using to drive bookings? Hotel companies leverage everything from Google Ads, Facebook’s ad platform to even advertisements on Snapchat. They also use Online Travel Agencies (OTAs) such as Expedia or HotelTonight to expand their marketing reach and sell rooms.
Fitness brands can use many of the same tactics to generate brand awareness and demand. The first step in determining your marketing mix is considering your budget. How much do you have to allocate to marketing? Do you know what the lifetime value of one customer is? The availability of this type of data can help you back into what an appropriate customer acquisition cost would be, which in turn can help you determine a marketing budget that makes sense for your business.
Next, you need to consider which audiences you want to reach and where you can find them. Which demographics do your brand and class offering appeal to? Understanding your target market can also help you select your marketing channels and define your marketing strategy. You might generate your frequent visitors through word of mouth or by encouraging your instructors to serve as influencers. You may discover participants brand new to boutique fitness and wellness, as well as “variety-seekers” by partnering with ClassPass. You can find new customers through both organic content and paid marketing on social media, and you could also connect to new customers through in-person events or by developing brand partnerships.
Make sure your price is right
The concept of revenue management has been prevalent in both the hotel and airline industries for years. Like hotel businesses, fitness studios should aim to lower costs and maximize profitability by building a revenue strategy. One impactful way to do this is by implementing dynamic pricing.
Hospitality businesses capture excess demand and lift revenue by dynamically yielding hotel room prices or seats on a flight. Modern technologies leverage algorithms that factor in historical data and present demand factors to recommend an optimal price between a base rate known as a “floor” and a maximum rate called a “ceiling.” When demand signals shift, algorithms adapt and updates prices so a hotel, a flight or even a boutique fitness class can be as full as possible for the most profitable rate.
Hotels benchmark this type of data using multiple metrics, most notably revenue per available room — a figure commonly known as “RevPAR.” RevPAR is calculated by multiplying the average room price times occupancy. If boutique fitness classes were to adopt this metric and track revenue per available space, they could see the impact of dynamic pricing over time and gain the ability to use data to drive key business decisions.
High-tech for high-touch
Implementing the best technology and taking a strategic approach to filling a class could help studio fitness owners generate more revenue. From website design to the implementation of booking and pricing technology, studios need to consider how the digital experience sets the stage for the physical experience.
When it comes to booking and pricing, ClassPass helps studios capture additional demand. Unlike the OTA model in hospitality, ClassPass partners with studios without taking a booking fee or detracting from their direct reservations. ClassPass SmartTools — spot allocation technology SmartSpot along with dynamic pricing engine SmartRate — help studios drive incremental bookings in two key ways:
- Determining excess capacity — shows studios how many spaces to place on the platform so they’re not cannibalizing direct demand and can discover new revenue-generating opportunities
- Dynamic pricing — helps price each class to increase occupancy and revenue potential
Dynamic pricing and spot allocation technology like ClassPass SmartTools essentially automates profit maximization — helping businesses save time and make more money.
At your service
Like any hospitality business, the goal of boutique fitness should be to deliver memorable experiences on a consistent basis — this is what creates repeat customers that ultimately help a business stay in business. Consumers don’t buy what you do, they buy why you do it — the hospitality experience is grounded in the core value propositions of your brand and your ability to consistently deliver on them.
Service businesses from vertical to vertical share a lot of common factors — namely perishable inventory and the emphasis on the customer experience. It’s essential for fitness businesses to welcome new customers in a way that is cost-effective and also provides for a great end-to-end experience at every touchpoint, from booking to post-class follow up. Learn more about how ClassPass can help you grow your business.