Ever since branded group cycling programs came out 15 years ago, it was a mystery to me as to how clubs and studios could justify the cost of third-party licensed programs.
Especially since they don’t generate additional revenue. And, even if there was no license fee, there’s training, certifications, accessories, etc. So, in the end, third-party programs created new overhead, yet, were always complimentary to the members.
Don’t get me wrong. I love group programming. And, I totally understand the “value proposition” of what a group program like Zumba or Les Mills can bring to a club. But, being a nuts and bolts guy, I kept going back to the math. The margins. For me, it just didn’t add up.
But, Then I Met Mr. Creative
Mr. Creative recently showed me how he not only justifies and actually offsets all the cost — but creates significant new sales revenue with his group programs!
So, once again, I am eating my words… and take back every negative thought I ever had about licensed or branded group programs.
Good, Better, Best
Here’s how Mr. Creative generates sales revenue with his Zumba Dance Class. He created 3 different packages by adding the MAP System and Personal Training. It’s a classic “good, better, best” type strategy. As a result, he’s totally offset the cost of all programs and licensing fees.
- Program 1 – Zumba: Basic Zumba program (FREE)
- Program 2 – Zumba Weight-Loss Plus: Basic Zumba plus MAP System (+$49.99)
- Program 3 – Ultimate Zumba: Basic Zumba + MAP + 6 Pack Training (+$299)
While the Zumba Basic Program is free to all members, the next two “value-added packages” are an additional $49.99 and $299 respectively.
In all “Good, Better, Best” strategies, the middle “value proposition” is almost always the winner.
Over the last 24 months, Mr. Creative has sold 726 Zumba Weight-Loss Plus packages at $49.99. That’s $36,292 in gross sales. He’s sold 173 of the Ultimate Zumba Package at $299. That’s another $51,727 — although he incurs much more labor cost for the training. Nonetheless, that’s a total of an additional $88,000 of gross revenue!
The “Value-Added” Approach Works
with Any Group Program
And, it’s not just Zumba. Mr. Creative has up-sell packages for all of his group programming including yoga, aquatics, cycling and other programs including his off-site boot camps.
Live Pitches, Video & Flyers
As part of his up-sell initiative, all group instructors are required to talk about the importance of nutrition during the “cool down” periods. They do NOT have to actually pitch or sell any value-added programs. But, they DO need to cover topics like hydration, recovery, blood sugar, etc. This is an easy talk for most instructors who totally understand the importance of proper nutrition for recovery.
Then, all participants are handed a “value-added program” flyer upon exiting the group room.
In some groups, during cool-down, they actually play their 5-minute branded weight-management video.
Brilliant. Just brilliant!