In the past 5 years, I have participated in three indoor cycling studio launches. All studio owners invested heavily in their studios, purchasing new bikes, new sound systems and various needed amenities. In addition, they invested heavily in recruiting instructors and staff. Then, their schedules were posted on their websites. Invariably, within six months, all three studios had to pare down the number of classes, had to release instructors and generated significant losses instead of positive revenue. As a veteran indoor cycling instructor, I knew that the launch excitement and enthusiasm clouded the studio owners’ outlook. I also knew that the necessary research was not properly done; that is, the research into the studio’s geographical area, demographics, commuter patterns, proximity to mass transit/major highways, easy access to parking and subscription packages/offers.
I wanted to share the following five suggestions with anyone who is contemplating an indoor cycling studio launch or has launched a studio but is currently struggling to attract riders and generate revenue:
1. Scale Up not Down
One of the studios I worked with launched with 4 classes daily and on weekends. The owner hired 12 instructors. So, that’s 28 classes per week. Then the owner proceeded to schedule some of the classes back-to-back. For example, she scheduled a Monday 7pm class, followed by an 8pm class. She also scheduled 8am, 9am, 10am and 11am classes on Saturday. What happened was that there were not enough riders to fill these classes. So the 8pm class on Monday had “zero” attendance because riders went to the 7pm class. Similarly, weekend classes were heavily attended in the 8am and 9am slots but not later simply because riders had family obligations, children activities, etc. As a result, the owner, had to cut back on underperforming classes – now, she offers 2 classes per day and only 5 instructors remain. This caused a strain on her relationship with instructors – not only many instructors had no attendance, but the owner did not readjust the schedule to re-distribute the workload. Therefore, scaling up after launch is far better and more cost effective then scaling down, canceling classes and letting go of instructors.
2. Avoid Heavy Reliance on Social Discounts
Think about it: if you just launched a new studio and offered a Groupon discount package, then you have just defined what your classes are worth – it is called impression of value; and, unfortunately, the impression is of a discount. In other words, customers who purchase that “deal” will have established in their minds a baseline price for your services – which, in effect is the discount price. Now, let’s look at this from the angle of a well-established studio. Such a studio has existing value (or price per class). When they offer a discounted packaged, customers will compare the discounted price to the baseline price per ride and then purchase it based on the fact that it will save them money. The point is that you devalue your studio when you attempt to attract new riders with a social media discount package. Wait until you have a loyal following and a solid reputation; then, and only then, offer a discount package, it at all.
3. Location, Commuters & Demographics
If the studio is not near a major commuting hub or if it is not in a very large city, attracting riders to early am classes (5am) or late pm classes (8pm) will be difficult. If your market is Los Angeles or New York City, there are enough people who live in these locations to have sufficient traffic/riders to come into your studio. If you are in a small town, look at commuting patterns and your studio’s proximity to mass transit or major highways. These are factors that will play a critical role in increasing ridership and directly contribute to the success of your studio.
4. Simple and Clear Price Packages
When you launch a studio, you will be tempted to offer a variety of price packages: student price, senior citizen prices, teen price, 5-pack prices, 1 year subscriptions, and so on. With so many price points, you will create confusion and possibly lead to misunderstandings with customers on what they purchased, when it expires, when to use it, etc. You do not need this headache when you launch. Instead, focus on three price points – for example: single ride price (walk in or online reservation), 5-ride packaged and 10-ride package. These are just suggestions – just try not to create too many packages. Keep it simple and add packages as you become more established.
5. Avoid Competing With Yourself
Many indoor cycling studios launch with several offering such as TRX, Yoga, Personal Training, Nutrition Classes, etc. While this strategy may pay off when you are in a major city or metropolitan area, it probably will not if you are in a small town. Having so many offerings will likely backfire. You will have a few participants in each class, thus creating the impression that your studio is not attracting enough members. Instead, have a laser-like focus on your core model – providing fun, safe and effective indoor cycling workouts. Then, as your business gains traction, you can start looking into other types of exercise to explore the possibility of adding them to your portfolio.
If you need further advice on bike platforms, sound systems, ventilation, studio setup or other startup help, please contact me.
Bonus: Don’t Be Like Them
Your studio should a be a reflection of your vision: what indoor cycling represents and how it benefits the individual. The temptation is too strong to imitate what national chains do or what your competition is doing. Instead, keep it real, keep it you!! There will be a time to do what other are doing, but for now, as you launch your indoor cycling studio, just be YOU!!