When I joined Classpass as a studio affiliate in 2015, the online platform acted as a useful lead generator. Classpass is tip top at branding and marketing — something that a lot of small business studios don’t have a huge budget for. The platform does an amazing job at providing awareness about my studio, a pole dance studio in San Francisco called San Francisco Pole and Dance, targeted at fitness enthusiasts and people with a high likelihood of interest in a service like the one my studio offers.
Back in May 2016, when San Francisco Pole & Dance was brand new, advertising and brand awareness were two of my biggest investments in the form of paid advertising through Google, Yelp, Facebook, and Instagram. It made sense to me to promote through other channels like Classpass that didn’t make me pay out of pocket in exchange for exposure to potential users.
When Classpass first started, the platform limited user’s attendence at a specific studio to a max of just two times per month. If customers wanted to attend a studio more often than that, students had to purchase classes directly from the studio itself. This structure was great because it put me front and center of thousands of fitness oriented people who wouldn’t have otherwise known about my studio. Great.
The way I saw it, Classpass was basically a try-before-you-buy model, allowing potential users to book classes as part of their Classpass fee. They could try my studio so that I could prove value to customers who were looking for something like pole dancing, something a little more outside the box than a yoga class. Early on, a number of students converted from Classpass users to studio members and began buying classes directly from the studio — exactly what I had hoped for.
But over the last 18 months, the Classpass platform has evolved. Most notable (and newsworthy), Classpass’ prices have gone up. Instead of one unlimited membership pricing option, Classpass now offers tiered pricing. They have also made quite a few changes to the platform, including new services such as premium reservations and credit-based bookings.
With premium reservations, Classpass users can now book an uncapped number of classes per month at an individual studio by paying a slightly higher price point through a product that Classpass calls “Studio Direct”. The Studio Direct feature allows users to purchase classes at a studio outside of their core ClassPass membership. The payout rate that Classpass pays studios for these premium reservations is slightly higher than regularly booked credits but still lower than if the customer had booked directly through the studio.
At San Francisco Pole and Dance, a drop in rate for a single class is $30 per slot (definitely a high price point compared to something like yoga, but also the lowest priced drop-in rate of any pole studio in San Francisco). For comparison purposes, Classpass pays me, the studio, just $7.50-$11.50 for each individual slot booked for normal credit classes through their platform. For premium reservations in the month of January 2018, I’ve so far received an average of something closer to $15.83 per class for premium reservations, a little over half of my normal price point.
This would be fine if the premium users were new people trying my studio out for the first time, but instead, I’ve found these users to be mostly repeat customers who have purchased directly from my studio in the past and are now going back to Classpass and booking there instead. This includes one customer who used to have a membership, cancelled that membership and has booked in to my studio 17 times in just 15 days, each time booking exclusively through Classpass. And I don’t blame her. I’d do the same thing if I was a customer dedicated to attending a specific studio. Why pay full price when you can get half off?
As a studio owner, the new premium reservation feature puts me in a weird position of having to compete against Classpass for business from my most loyal customers, people who know what I sell, like what I sell and keep coming back for what I sell.
Additionally, studio owners do not have a say in determining which classes they want to allow premium reservations into the same way we are able to limit normal reservations on Classpass to beginner level classes and new specialty classes like burlesque and gymnastics.
By default, Classpass allows users to book the premium reservations for any class that a studio hosts, including classes that the studio has disallowed normal Classpass users from booking. This small tweak undermines my studio’s use of Classpass as a lead generator or discovery tool. From a user perspective this is great, but for a small business owner paying San Francisco rent and aerial arts liability insurance, it would be impossible for me to run profitably if all of my most loyal customers were paying Classpass rates.
After running the numbers, I decided it wasn’t worth it anymore. I was scared to send the email. What if getting off of Classpass means no one comes anymore? I wondered to myself but it felt right to me to leave. I asked Classpass to take my studio off of their platform. Without the ability to limit which classes people purchase from me through Classpass, Classpass simply became a direct competitor undercutting my own prices. It simply is not in my business’ interest to operate that way.
I immediately received a response from a Classpass representative offering customization of our Classpass offerings in order to keep us on the platform. Note, in an earlier phone conversation with Classpass, they did call to tell me that the premium reservation feature would be rolling out, and when I specifically asked the customer service representative to disallow the premium reservations feature from my studio’s dashboard, she told me I didn’t have a choice.
But after I asked Classpass to remove my studio from the dashboard and cancel, Classpass changed their tune. They told me that while it is not possible for studio owners to manage or disable the premium reservation feature on our end, it is possible for them to do so on their end. That brings the product halfway back to what I wanted initially and so I agreed to continue hosting classes on the platform in the same way I had done before.
As a studio owner, I’m still weary of Classpass and the fact that new students in beginner level classes can still book an unlimited number of classes through the Premium Reservations feature. That said, Classpass does do a lot of good. For one, Classpass provides free-ish marketing. In a San Francisco market where humans are constantly moving in and out, then need for ongoing marketing through multiple channels is essential.
In a recent survey I conducted of my own students, over 28% (!!!) indicated that they had learned about my studio through Classpass. That’s a lot! In just the last month, 147 brand new students have visited San Francisco Pole and Dance for the first time and Classpass is responsible for bringing in many of them.
As well, the services that my studio offers are necessarily expensive. A lot of people who use Classpass wouldn’t be able to otherwise afford a membership or drop in rate by booking directly. Classpass provides people who otherwise wouldn’t be able to afford it an opportunity to try a luxury experience at San Francisco Pole and Dance…and I like that. It makes me feel good. Pole dancing has been transformative for me and my relationship to my body and how I view the world and women’s relationships. That Classpass helps make that experience cost-effective for more humans makes me happy.
Another thing that Classpass is much more effective at than current tools like Mindbody, Yelp, or Google, is that they prompt users to leave feedback and reviews in real-time. As soon as a class is over, Classpass sends an in-app notification for users to leave a review, and the UI is designed so that it is hard to book another class before that user does so. This provides me with real-time feedback about how my instructor team, front desk team, classes and studio are being experienced by thousands of different users. If I were to pay for a less effective email marketing service through something like Salesforce, it would cost me close to $500 a month. Classpass effectively saves me that money.
In it’s June, 2016 series C funding round, Classpass raised another $70 million dollars, which means that Classpass has a lot of cash to continue innovating and building out the platform. This, no doubt, means plenty of new changes like premium reservations in the future. In the meantime, I’ll be keeping a close eye on and posting about the way changes in Classpass’ business continue to affect mine.
Are you a studio owner and use Classpass? I’d love to hear about your experience as a studio on Classpass. Please share in the comments or post on the Facebook/Twitter threads. I look forward to hearing from you!
