In our guest post series, we’ll be bringing you advice and tips from industry experts on the other, sometimes non-marketing-related issues affecting local business owners. Today’s post comes from Andrew Wicklander, the Founder of Tula Software.

I regularly look at the reports in my wife Maile’s studio, and these enable me to visualize something we talk about a lot: That the path to a healthy studio not through deals, but that it is by building a solid member base and loyal customers.

Of course, it’s not just the revenue from the members that matters. Certainly that’s important, but it’s not just about the money. It’s that when you’re able to build a successful membership base, this is also a signal that what you’ve built is important and valuable and worth paying for.

What’s fascinating though is the degree to which the idea of memberships matters. In this chart below, I’m zooming in on a handful of the most popular passes at Tula Yoga Studio in December of 2015.

Fitness Marketing

You can see most of the revenue was generated from the sales of ten packs, followed by a number of singles and introductory 3 pack offers. Lower down we see the sale of ten memberships, generating about $1,000 in revenue.

So if you’re looking solely at December, you might reasonably think that these 3 pack intro offers could potentially be even more important than memberships.

But that’s not the whole story.

When we look out at the whole year, we can see that the memberships generated almost the same amount of revenue as the ten packs and far more revenue than the singles and the introductory 3 pack.

yoga studio more revenue

Are the introductory offers important? Absolutely. Are they anywhere nearly as important as monthly memberships? Not even close.

What’s so striking though is not just the revenue difference. It’s the number of times a purchase decision was made in order to generate that revenue. Because of the nature of the memberships, there’s a compounding effect. The first month, you sell 10 memberships. But then when you sell 10 more the next month, you have 20 memberships going. Of course some people will cancel, others will join up, etc. So you might sell 170 membership passes all year and have 120 active members at any given time for example.

But if you’re always only looking at your monthly numbers, you’ll never get the whole story of how important memberships are.

Another way of thinking about this is that one membership purchase, has many payments, but there’s still only one purchase decision being made here. So the reality is that 183 purchase decisions generated far more revenue than over 1,500 purchase decisions of single classes.

The other benefit is that memberships are the exact way people can usually get the best deal on yoga. So the way you talk about memberships matters too. When people ask if you have any discounts, say “yes!, we have an unlimited pass for $99/$108/$125—whatever your case may be, so if you come 3-4 times per week you get your yoga for $6 or $7 dollars per class.”

The flip side of this is, of course, to wonder how much value discounted classes are really brining you? What matters is the degree to which people who buy your introductory passes end up becoming regulars at your studio, not the number of deals you sell.

Something to think about as you gear up and set your sails for the year ahead, and hopefully these charts remind you to zoom out now and then to see what’s helping your studio the most.

CRMs for Yoga Studios

Andrew Wicklander is the creator of Tula Software, a hosted web application that yoga studios around the world use to run their businesses.  Andrew regularly gives talks around the country about how lessons from yoga can be directly applied to business, and how yogis already possess all the wisdom required to succeed in their entrepreneurial ventures.