Costly Activities

Costly Activities

When should you charge for a class?

My editor here at Club Industry told me that at his former club he paid extra for Spinning class. At his new club, Spinning is included in the cost of membership, but if he wants to reserve a slot, he has to fork over $5.

A Spinning fanatic, I have been shut out of Spinning at my old gym and have come close to it at my new club, but would I have paid for the class or a reservation for the class? Not on your life. In my nearly six years as a member of various New York City health clubs, I have paid for two services: massage and personal training.

Now I may pay for a third. At my new club, boxing is on the schedule-for a fee. Because the wonderful trainer I recently left turned me on to the discipline (and I have a lot of Big-City hostility to vent), I am contemplating signing up for a block of boxing sessions.

All of this raises an interesting point: When should a club charge for a group exercise class? More to the point, should a club charge for group exercise classes? "If members are paying a lot for membership-meaning in most areas more than $50 a month-then they feel as though you're trying to rip them off if you charge for classes," says Fern Pessin, president of Retention Resources, a consulting firm in Long Beach, N.Y.

Adds Laurie Cingle, wellness director at The Maryland Athletic Club and Wellness Center, "I'm not really for or against charging for classes. It depends on what works for a club. Our group exercise classes are part of our offering to membership. We wanted to offer members the experience and flexibility of different types of classes to help them realize their goals."

Though the decision to charge for classes is an individual one, the experts I spoke with stress that the decision to charge should be made carefully. Here are some important points to bear in mind before placing a dollar sign next to the offerings on your group exercise schedule.

* Is the class highly specialized or educational? Most experts agree that if a class meets these criteria, you can justify charging a fee. But there should be a beginning, middle and end point. And the member should feel she's getting something extra out of the class: For example, she is taking yoga with a visiting instructor from New York City or she is going to lose weight.

* Is the class ongoing? "If it is, in most cases members won't understand why you're charging for it, unless your pricing is structured in a different way," says Pessin.

Facilities that charge a low buy-in rate often offer unbundled pricing. "Your membership gets you in the door and gives you access to equipment and you buy everything else," says Pessin. "If you're presenting your club as a 'pay-as-you-go' facility, it's fine to charge for all those different things."

* Is a guest instructor leading the class? If so, you can probably charge a little extra for it, explains Pam Germain, director of the National Association for Fitness Certification and a group instructor. For example, classes that are highly specialized and new, such as Pilates, may have a narrow appeal. To cover the cost of the instructor, and even equipment or materials, you may need to charge.

But there is another side to this issue: A lot of club managers rationalize that, because they have to pay a specialized instructor more than they pay their regular instructors, it costs more to service the members who take the instructor's class. Thus, a fee. "It doesn't mean members will be happy with this," says Pessin. "They may feel: 'I'm already paying dues. I don't want to add to my dues every week to come to a class.'"

* What is the size of your club? "Each club has to assess what it can and can't afford to include in membership," says Germain. Smaller studios, she says, tend to charge per class. "But sooner or later, if you want that new Spinning equipment, you may want to raise the dues $1 per month, instead of charging per class, just as you would do when the cost of running the place goes up."

* What will your market bear? "In our community [Sierra Vista, Ariz.], we have a lot of retired people who aren't extremely excited about handing over extra money for a class," says Germain. "They want to get the best value."

* Have you surveyed your members? The club where Germain teaches is small, so she can ask members how much they'd be willing to spend on a class. For larger clubs, Pessin suggests a more scientific approach: a focus group.

Say you were to do a focus group on group cycling. Gather a cross-section of members, including those who are active in group exercise and those who spend time on the stationary bikes, and contact a local cycling club and invite some of its members to join in. Then ask people how much they'd be willing to spend for a class, be it $1, $2 and so on. Also ask if they would pay for advance reservations. "Give them all the different options," says Pessin. "Every single market, every single population is different. What works in one area won't work in another."

* Are you going to offer the class for free at some point? Typically a club can justify charging for a class if it's short-term and if it's testing the waters to find out if there is sufficient interest in the class to add it to the schedule. There is one drawback. Often when the class is suddenly free, members who didn't take the class when there was a fee show up. Naturally, the members who had paid get upset that something that once cost them money is now gratis.

* Are you charging for the class to cover the cost of equipment? If so, Pessin suggests you recoup your investment by allotting some slots to people in the community who can pay to take the class as nonmembers, and later be given the opportunity to convert their class fee to full membership. If you take this route, limit the number of classes a nonmember can take. Otherwise, you may have members who only want to take that class, drop their membership and take the class as a nonmember, notes Pessin.

If you are worried about equipment costs, you can let members bring their own-if your club is small enough. Germain takes this approach. She encourages members to buy their own gloves for a kickboxing class and allows members to bring in their own weights and store them for free.

"As people get stronger, they want to move up in the size of their weights," explains Germain. "For people who always want to have a certain size weight available, I give them the option of storing their weights at the club. We don't have to deal with asking management for money." Of course, she acknowledges, "That's a small-town solution."

* Is your staff willing to recruit class members? "Often when a club starts charging extra, management asks the staff to recruit people for the class," says Pessin. "Most staffers don't like asking people for extra money. They're the ones who will see the eyes rolling and will have to explain why you're charging more. You're putting your staff in an uncomfortable position."

* Should you sell a block of sessions? It's not a bad idea. "With a block of classes, people know they're going to progress the whole time," says Germain. Selling a block of sessions also "makes good sense monetarily because you don't have to take the money every night." It also makes sense to offer a discount to people who buy a block, though not everyone may take advantage of the opportunity. "In a metropolitan area where people are dropping in before and after work, you have to offer on a per-class basis because these people can't commit," says Pessin.

* Are you willing to risk losing members if another club offers the same class for free? Of course, whether you lose members may depend on factors besides money. If you have an incredible instructor, if your member is satisfied with your facility and likes everything about it, if your club is clean and has a wonderful reputation and the member's friends all go there, the rival club that gives away the classes won't get your member, according to Pessin. "But," she adds, "if the member thinks your locker room is dirty, if his friends are joining the other facility, and if the other facility has services you don't, then he will leave.

"In order to leave, a member has to feel he's always being taken advantage of. If you charge for only one class for a short period, nothing will happen. But if a member feels you're nickel-and-diming it, he will leave."

Reservations Over Reservations?

So you have a popular class. In fact, it's so desirable that some members complain that they get shut out. Should you implement a reservation-for-a-fee system? "The rationale often is we'll charge so people will show up and we won't have empty slots," says Fern Pessin, president of Retention Resources a consulting firm in Long Beach, N.Y. But the flip side of this picture is: "I'm already paying for membership, so why do I have to pay extra to reserve a space?" says Pessin.

On the other hand, signing up for a slot on a first-come, first-served basis makes sense. But if you're a member who can't get out of work in time to reach the gym and reserve a slot 15 to 30 minutes before a 12:15 class, there goes that system.

Pessin's solution: Allow people to make reservations. And if they don't show, charge them $5. "Members who are on a waiting list or who show up at the last minute can then get into the class, though they're taking a risk," says Pessin.

And to spare members the stress of rushing to get to the gym early to sign up, let them make reservations up to 24 hours in advance, ideally on your Web site. "Let people log on at work, make a reservation or check to see when slots are full," advises Pessin.

- C.W.

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