Help users get value from a flat fee, or they will leave
Updated: Oct 11
People buy a plan for the person they hope to be.
The study. Two economists from UC Berkeley and Stanford studied 7,752 members of three US gyms over three years.
The finding. Members on a monthly plan paid more than $70 a month and went about 4.3 times a month. That is about $17 per visit. A pass of 10 visits cost $10 per visit. Many members also waited months before they cancelled.
Why it matters. People join with high hopes about how often they will go. Then they do not go. Subscription businesses can earn from this for some time, but users who get no value leave and tell others.
The takeaway. Watch usage, not only payments. Help users who do not use the product, or offer them a plan that fits.
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