Let’s talk business: Dinner, martial arts, and Pike13

My husband and I had dinner with a young couple this past Saturday night. They’re in their early thirties, have an 11-month-old daughter, and are three years in business building a Martial Arts school.

The husband—we’ll call him “Brian”—expressed that this was the make-or-break year for them. Hovering around 70 students,and $6000 in monthly revenue, he said that the business needed to fully kick over this year or he would need to consider other work. He feels stuck with his membership growth, and they’re struggling to grow past 70 students.

Here are snippets from our conversation, his primary pain points and some key takeaways that could be useful to your business, too.

First, whenever I speak with anyone running a membership-based business that isn’t yet in a great financial position I always ask:

“Do you have your members on recurring billing?”

This one item can mean the difference in thousands of dollars of annual uncollected revenue. All too often owners of smaller fitness-based businesses, boot camps, and so on., are playing bill collector and reminding their clients to pay each month. If not on recurring billing, people forget their checkbooks, are out of town the first of the month, or otherwise forget to pay on time. Fortunately for Brian, he had that part under control. He has a third-party company that handles his EFT billing and collections. While a great start, the fact that he’s not using a complete solution has led to some other pain points.

Pain point #1: Average monthly billing is too low.

Brian lamented that many of his original students were only paying $60/month, even though he’s now charging $100/month for new students.

Brian: I have a lot of guys that have been with me for a while who are only paying $60 month.

Me: For unlimited classes?

Brian: Yea.

Me: That’s less than $3/class if they are coming 5 times per week!

Brian: I know. I just don’t know how to raise their rates without them leaving.

Me: Why don’t you make the $60 rate a “2 classes per week” rate? Give them the option to upgrade to the unlimited plan if they want to come more frequently.

Brian: We used to do something like that, but it was impossible to track. Each student had a file card, and we’d need to remember to mark off their visits when they came to class. It just seemed so much simpler to make everyone Unlimited.

Of course, at this point I explained the beauty of using an integrated software platform like Pike13. Not only will it handle recurring billing and other client purchases, but memberships can be created with visit restrictions (2x per week, 3x per week, etc.), and clients can quickly be signed into class from the instructor’s phone and visits are tracked accordingly. His eyes lit up—it was something he hadn’t even considered. In his mind, software solutions were for larger “Globo” type gyms, not smaller businesses like his.

Pain point #2: Difficulty expanding client base

Brian: I’m struggling when it comes to branching out and attracting new clients.

Me: Have you tried doing any targeted offerings, like a women-only or beginner workshop?

Brian: Yes, I had a women’s class for a while, but only two women came. And their attendance was sporadic. More often than not the class was empty.

Me: It’s really difficult to target and attract a new demographic just by adding a couple of classes to the schedule. Have you considered offering it as a course or a workshop?

I explained the difference between classes (they’re regularly scheduled, and clients with memberships can choose to come and go to classes as they please) and courses (fixed start and end dates, clients pay and register in advance and are enrolled in all sessions of the course, with no further commitment). And that when attempting to attract new clients the course always wins out.

Here’s why:

Urgency Because of the fixed start date there is urgency to sign up for a course. Especially if there are limited spaces available. Prospective clients want to sign up now to get a spot. In contrast, a new client considering a class can always put it off: “I’ll start next week.”

No commitment Courses give prospective clients the opportunity to try your services (and experience your amazing community) without feeling pressured to sign up for a lengthy commitment. Almost everyone can wrap her mind around trying something new for 4-6 weeks (common course/workshop lengths). If you do a great job with the course they’ll be asking how to become a member. No need for a sales pitch!

Source of revenue Not only are courses a terrific entry point for attracting new clients and introducing them to your program, they can also be a significant source of revenue.

We chatted for over an hour, enjoying some out-of-this-world, gluten-free cookies that his wife made. When we wrapped up, he was excited to implement the following ideas:

1. Implement Pike13 to track attendance and class visits. Visit reporting, revenue reporting, and the ability to track instructor pay will significantly help streamline current operations. Not to mention everything can be done from his mobile device!

2. Limit the folks at the $60 rate to 2 days per week of training. If they want to come more frequently, offer them the option to upgrade to unlimited classes at $100/month.

3. Create and schedule targeted courses. Expose new people to your way of training, get them results, and easily convert them to a membership.

4. Continue to build presence on the business’s Facebook page. Sharing notes about class and course offerings, photos of clients, and so on, can really help increase exposure, leading to new signups and greater membership numbers.

Do you own a micro gym, Martial Arts school, or other service-based business and find yourself with pain points similar to Brian’s? Contact me to find out how Pike13 can help.