Ten Key Metrics You Should Be Tracking if Your Studio Uses Classpass

I’ve written before about why Maile decided Tula Yoga Studio wouldn't join classpass, but also about how we built a small integration for our customers that use Classpass.

The more I learn about Classpass the more and more skeptical I become that their model is sustainable for independent studios, however I’m also aware studios still use them, and nobody knows better than you whether Classpass is good for your business. 

But whether you think Classpass is great for your studio, or whether you’re considering abandoning the Classpass network, they are a business partner and you should know the impact they are having on your business. If they’re good for your studio, awesome, now you have data to back it up. If they’re not good for your studio, excellent, you’ve identified an area where you can improve. 

Ten Key Metrics

With this in mind, here are 10 easy to gather, simple to understand, key metrics you should be tracking & questions you should be able to answer, for the time preceding and following the adoption of Classpass at your studio. (And sometimes even if you're not).

Total Monthly Revenue: Is it going up or down?

Monthly Member Count & Monthly Member Revenue: By far the biggest risk of joining Classpass in my view is losing members. Did anything happen with your monthly members? Did they go up or down or stay flat? Is that consistent with what you’ve experienced in years past?

Total Revenue Received from ClassPass: How much money total did ClassPass pay you for a given month?

Total ClassPass Attendances: How many total people are coming in with classpass? 

Revenue Per ClassPass Attendance: How much revenue are you on average receiving for each Classpass attendance?

Total Non ClassPass Revenue: How much are you bringing in without classpass? How does this compare to before you started using classpass?

Revenue per attendance of non-class pass students: What’s the average revenue you're receiving for your full price students?

Percentage of attendances by way of Classpass: What percent of your total attendances are coming in from classpass?

Revenue per non classpass, non member attendances: How much less are you getting paid by classpass than you're getting paid for your other drop-ins?

Percentage of revenue received from Classpass: What percentage of overall revenue does Classpass account for?

 

How do things look?

Like I mentioned at the start of this post whether you tend to think Classpass is good for your business or you think Classpass might not be quite right for you, this simple spreadsheet should help you see with data how Classpass is affecting your business. Below is a view of a template with some generic data filled out in one row. Cells highlighed in yellow are formulas driven by numbers you enter in the other cells. Like I said: super simple. You can dowload an Excel version here, a Numbers version here, and a CSV file here.

It's amazing what a simple spreadsheet can do for you!

The thing I like about looking at data this way is you're laying out cleanly a way to see how Classpass has affected various aspects of your business, and then you can compare to whether that matches your intention. 

On Mindbody, Marketplaces, Fear, and Hypocrisy

I’ve been writing about Mindbody a lot lately, with my recent open letter to their customers, and my open letter to their CEO, regarding their new application that competes with Groupon called Mindbody Connect. 

And while I thought I was mostly done writing about how terribly they're treating their customers, I had completely forgotten about the fact that Mindbody worked with Yoga Journal to prevent companies like Tula Software, and other like us, from participating in the Yoga Journal Marketplaces.

The Yoga Journal Marketplaces, if you aren’t aware, are nationwide open to the public events contained within the Yoga Journal Conferences, and are a fantastic way to meet people in the yoga industry around the country. 

Tula Software was told directly by Aim Media sales representatives, the parent company of Yoga Journal, that we were not allowed to participate in their marketplaces because Mindbody had gotten upset when our mutual competitor Front Desk showed up at the January 2014 San Francisco Yoga Journal Conference, which I also attended as we were preparing (or so we thought) to sponsor an event in a different city.

So a short 2 years ago, the CEO that is saying this kind of thing on the Mindbody customer forums:

“A relatively small number of people are caught up in self perpetuating fear. And, if they don’t break out of that negative spiral, their businesses will suffer - not because of us. Because of them.”
— Rick Stollmeyer via mindbody customer forum

And mocking his customers on twitter by saying things like this:

The past two weeks remind me: the opposite of love isn't hate. It's fear. Fear paralyzes. Fear manifests the outcome you fear most.

— Rick Stollmeyer (@stollmeyer) January 6, 2016

Yes, that is the CEO of the company that was actively working with Yoga Journal, the industry's most respected publication with the industry's largest marketplaces, to prevent Tula Software and others like us from participating in the same marketplaces Mindbody was participating in. 

And now that same company is shoving their customers and their students into their marketplace and minimizing the impact that their decision to compete with Groupon has had on your business. 

They can try all they want to lecture you about competition and fear, and I’ll be here every step of the way to teach them about hypocrisy. 

Healthy Studios Are Built with Memberships and Loyalty, Not Deals

I’ve been playing around with our newly updated reports in Maile’s studio, and I’ve been able to visualize more clearly something that 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. 

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. 

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.

Mindbody's Vice President of Marketing is Hawking Free Workouts on Twitter

You can tell a lot from a tweet.

For example, in this tweet below, we see Amanda Patterson, the Vice President of Marketing for Mindbody, (yes, the Vice President of Marketing) retweeting San Fransisco Magazine.

But what she's retweeting, this Vice President of Marketing, is clearly something sponsored. Something that a company paid them to say. And what exactly is it that they were paid to promote? 

How consumers can work out nearly every day for free because "Mindbody online makes it happen." 

So while the CEO is hitting their customer forums telling their customers how the new mindbody connect app is going to supposedly be good for their businesses, the Vice President of Marketing is out there buying up ads to promote how your students can work out for free. In January. Your busiest month of the year.

Because somehow more people working out for free is going to be awesome for your business, just like Groupon was.

On a personal note I want to acknowledge we've spent a good amount of time talking about mindbody this past week. We don't love talking about them, but we feel what they're doing is both wrong, and also a big opportunity for Tula to show how we're different. We won't be too obsessive about this for much longer. In the meantime, did you see how in between all this we lowered our credit card processing rates to 2.3% + $.30/transaction? 

An Open Letter to the CEO of Mindbody Online

Dear Rick,
I’m taking a moment follow up on my open letter to mindbody's customers, with an open letter to you, regarding the subject of you introducing a Deals Engine to the mindbody connect app. As you know, in this app you now introduce your customer’s competition to their students, and importantly, you allow consumers to immediately connect their credit cards to other businesses.

Before going on, I’d like to remind you that I’ve often spoken positively of you as a person, and of our competition with mindbody in general.

My words are not personal. They are competitive.

I’m writing you in the open because I don’t think it’s proper that you are not holding your own company to the same set of standards you hold your customers to, and they deserve to know where your words about how they should run their companies are incongruent with the way you run your business.

Specifically at it relates to the notion of competition.

According to the comment thread in my open letter to mindbody’s customers, you wrote a lengthy letter on your customer forum to address your rightfully angry customers. 

In this letter you outlined what you believe are false perceptions by your customers. While there’s not enough room on this blog to address each of your points, there are a few in particular that need to be called out so that you understand how the way you operate your company is different than the way you talk to your customers about how they should operate their businesses.

Your words below, talking about what you believe are false perceptions.

Perception #1: Competition is inherently bad and must be avoided..
—> We don’t agree. The presence of competition indicates a vibrant market. Healthy competition brings more awareness and more buying into the ecosystem. It is the principle reason shopping malls, downtown business districts, theme parks and the Las Vegas Strip exist. It’s the reason all the medical and dental offices in my town are in the same area

Wow. Considering the fact that mindbody is so concerned with people knowing about your competition, that your company literally hijacked a Quora thread to take over the question “Does Mindbody have any competitors? Who are they?”, you sure do have a lot of nerve scolding your customers about the importance of competition.

And that was a Quora thread, something designed to answer these questions.

So let’s be 100% clear here: You don’t even want A QUORA THREAD to contain information about your businesses competitors, and yet you have the nerve to try and educate your customers about the important notion of competition WHILE TRYING TO EXPLAIN TO THEM HOW IT’S OKAY THAT YOU INTRODUCED THEIR STUDENTS TO THE GROUPON STYLE DEALS OF THEIR COMPETITORS.

Unreal.

You go on to say:

—> In this spirit, we will change our policy about removing posts that name competitors. (“Touché” indeed!) To make up for that, here are the best MINDBODY competitors: www.zenplanner.com, www.booker.com, www.wodify.com, www.vagaro.com, www.motionsoft.com. www.appointments-plus.com. I know the CEOs of each of these companies, and they are all talented, decent people running reputable companies. If you truly don’t embrace the “marketplace of wellness” we are creating, and their software can meet your needs, check them out.

It’s convenient how you leave out the fact that you hold your customer’s credit card data hostage for a ransom of $600. Data you tell them they own on your pricing page. Data that you know is so valuable you've given your customer's students the ability to instantly transact with any of their competitors. 

So again, let’s be clear about what you’re doing: You’re pretending to hold the door open for your customers, all while the customer remains chained to the wall because you’re still holding their credit card data hostage.

Because you love competition so much.

The simple fact of the matter is that unless and until you are willing to let your customers take their credit card data without a $600 penalty, everything you say about the importance of competition smacks of unwarranted self righteousness.. The credit card data portability standard is something that any decent company that embraces competition adheres to. As you know, mindbody has as of yet still not joined the data portability alliance even after our call for you to do so.

But good news, later on regarding your false perception #4 you say something where we agree completely:

Perception #4: That you are somehow all playing a zero sum game, fighting over a fixed number of clients in your communities.
—> This isn’t even close to true. On average, less than 1 in 5 eligible adults in your communities are engaged in ANY organized wellness activity. Your biggest competitor is the couch and television. 

YES! We agree! See there can be harmony in the universe! I wrote this blog post about competition all the way back in October of 2013 where I say “Your competition is Facebook, the internet, TV, couches, beer, cupcakes and movies.” 

Hey wait a minute, that post came about because it was me talking about competition in relation to that whole Quora thread incident. So wow that’s super weird. 

The root issue you don’t seem to understand is this: There’s a difference between operating in a free market competitive landscape and having THE COMPANY YOU TRUSED WITH YOUR CUSTOMER DATA INTRODUCING YOUR CUSTOMERS TO YOUR COMPETITION’s DEALS.

I could go on and on but I think the point is made. You simply don’t expect your company to operate under the same environment you’re putting your customers in.  If you did, you’d free your customer’s credit card data, you’d stop hijacking internet threads about your competitors, and you certainly wouldn’t have built Groupon 2.0.