About 20 years ago when I first got into this industry, my company signed a contract with what was then a small six-location chain out of New York City. I’ll refrain from calling them out specifically, but today they have grown into a high-end fitness powerhouse with locations across the country and internationally. They are arguably one of the most successful when it comes to member service, engagement, social media presence and ultimately non-dues revenue penetration across their population of members. In short, they have been a fitness juggernaut, and many organizations who have come after them have tried to copy what they have done. There is, however, one variable in their business, arguably the easiest to duplicate, that no one has managed to grasp. For 20 years they have stuck to the KISS principle when it comes to the number of membership choices/options/types that they offer.
KISS, an acronym for "keep it simple, stupid" or "keep it stupid simple," is a design principle noted by the U.S. Navy in 1960. The KISS principle states that most systems work best if they are kept simple rather than made complicated; therefore, simplicity should be a key goal in design, and unnecessary complexity should be avoided. No place is this truer than in the fitness industry. I cannot count the number of software implementation kick off calls where our question about how many membership options the company sells or has active in their database has been met with snickers, groans and grunts. It’s often followed by someone (inevitably from someone in sales, marketing or the executive team, ahem!) saying, “What choice do I have?”
The answer is that you do have a choice. The most successful clubs I have seen—and yes there are others besides the customer I mentioned above—have a limited number of membership options that cover the bases. For example, individual, couple or family, or bronze, silver and gold. They place a rack rate on these memberships and implement systems and software that support a promotional hierarchy that in turn can “adjust” the rack rate. The value of this system is that ultimately your organization will have data sets of thousands of members from which to run analytical reports regarding membership stickiness, promotion efficacy and member lifecycle analysis. That compared with what over time can become thousands of membership types, each representing small subsets of people who provide no relational value other than the fact that they are members of your club.
The high-volume, low-price market has implemented the KISS principle particularly well. A visit to Planet Fitness’ website says it all. You can either have A or B. Having said that, I fully appreciate that many CEOs reading this article run much more complicated full-service clubs, and so I’d suggest that you come up with your 10 (heck make it 20) rack options and mandate that all variations or pricing and packaging must start with one of those choices. This includes promotional pricing as well as corporate pricing options.
At the end of the day, you will be able to quickly answer questions that take entirely too long to answer today and perhaps KISS all your crazy spreadsheets goodbye.