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Give people too many options and they won’t pick any, which is why it’s best to keep it simple with a flat rate membership, rather than using surge pricing or yield management techniques. It hasn’t changed in 40 years and I doubt it will. The subscription model is the best in any business and especially for our industry. Price is rarely the real reason people don’t buy, says Mathias If it’s used at product/service level to reward greater numbers of participants as part of a shared service – ie, more people share the same cost – then I think it can increase transparency and trust. If it’s used at membership subscription level, and/or at a frequency where prices change too sporadically, then trust will erode. On this basis, dynamic pricing should be approached with care, to ensure it’s used to enhance transparency and trust and never in a way that risks that.
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The gym sector is one that could be better trusted than it currently is, and pricing is always an influencing factor. If members need more flexibility, then that should absolutely be an option too, but it may need to be a premium option so it stays viable for the business, as well as the member.ĭynamic pricing is something we may start to see, but we would need to employ it in a way that best serves our members. Members benefit from a lower monthly subscription, and gyms benefit from surety over future revenues, giving a more solid foundation from which to invest back into their products and services, from which members benefit again.
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The subscription model is still the best for the industry. We see the recovery as a steady climb rather than a bounceback and it’s my personal hope and belief that by the second half of 2022, most markets will be adapting to live with COVID-19 and the trajectory will steepen. In all parts of the world we can see people placing a higher value on health, so there’s an underlying impetus which will assist the trajectory of the recovery in the coming months. This is something we’ll continue to do as we recover. These are all challenges we have to deal with, however, pre-pandemic we undertook measures to widen our appeal, with a range of new prices and a lower entry point based on utility. The relative lack of government assistance – such as furlough schemes and job-keeper programmes – also means some have tightened the purse strings for a period, compared to other parts of the world, where significant government assistance has preserved spending power to a larger degree than in Asia. This has meant some customers have de-prioritised their return to the gym through an abundance of caution. Some families live with three generations together in Asia, so there’s concern for children and especially elderly relatives. Providing the customer with a choice is usually the best approach, rather than just a binary buy/don’t buy decision Several factors appear to sit behind this, specifically governments placing us last in the queue to reopen, which indicated an implicit concern over gym safety, despite evidence to the contrary. In Asia, post-lockdown confidence is varied and seems to be lower than North America, Europe and Australia. Some of this is born from a few operators offering very attractive price-based incentives, which tends to mean others will need to follow suit to maintain market share – in this scenario, strength of brand is a big factor in being able to hold onto yield while also driving volume. It does seem illogical to offer a discount to overcome consumers’ hesitancy over safety, but we have seen evidence that it does play a part in the extrinsic motivating factors to get people back to good habits. However, at the present time, peak-time spots in central business district clubs are not as premium as before the pandemic, due to the work-from-home hybrid pattern. In general, in Asia, where capacity restrictions still remain, the ‘effective value’ of a spot in busy times has risen significantly, so measures that reflect value through yield optimisation will be even more important. Presenting good-better-best options, such as a pay-as-you-go and pre-paid, is a great way to look at it.ĭynamic yield management models are absolutely the golden chalice if they can be implemented intelligently in order for operators to generate maximum returns on investment. Having said that, providing the customer with a choice is usually the best approach, rather than just a binary buy/don’t buy decision. From a business perspective, a subscription model is still highly desirable, due to its high visibility, the relative consistency of future revenues and the relative simplicity of automatic billing.