ClassPass: Fitness Everywhere, for Everyone
Worldwide access to thousands of top-rated gyms, fitness studios, salons and spas
Fitness Classes for Everyone
ClassPass is a platform that connects end users (i.e. individuals looking to attend fitness classes) to classes at boutique fitness studios. The business model consists of revenue inflows from subscribers and cost outflows to studio partners.
The main product being offered to fitness consumers is a monthly subscription. ClassPass offers multiple subscription levels which correlate with different numbers of class credits / free classes available each month. Membership rates are set based on geography but often range from ~$75/month to ~$125/month. The platform offers a range of classes that vary from yoga to cardio kickboxing to cycling and more. These studio offerings usually cost anywhere from $15 to $45 per class which purchased a la carte from the studios. Based on the pricing model, users experience cost savings if they book ~6+ classes / month through ClassPass.
ClassPass negotiates rates with partner studios (discounted rates compared to the studio’s usual a la carte pricing) and then pays each studio a per class fee for each spot reserved by a ClassPass member. This fee is a percentage of the class’s usual retail price and the fees are scaled based on demand for the class. By partnering with ClassPass, the partner studios not only have increased attendance at their classes, but they can also leverage ClassPass as a form of marketing for their classes / fitness offerings.
Members are seeing gains but will ClassPass?
Though ClassPass has experienced some delays with onboarding new fitness studios to the platform, the overall business model is fairly easy to scale. In order to expand the product offering, ClassPass needs to increase the number of partner studios and the variety of classes / activities available for booking. The lift for these scaling efforts is fairly low because the infrastructure for the website and the app already exist.
Is ClassPass Out-Punting Its Coverage?
As mentioned above, ClassPass has experienced some delays when trying to onboard new studios to the platform, due to hesitations around offering “specialty” classes on a common platform. Many boutique fitness studios view their class offerings as unique from mainstream gyms and therefore do not want to group their services under a common umbrella with many similar gyms / studios in the area. This hesitation tends to slow the speed at which studios commit to partnerships and onboard to the platform. Despite this initial hesitation, by analyzing customer acquisition trends, ClassPass has learned that once a couple studios in a specific geographic region partner with the platform, others are much more willing to join. ClassPass generates increased awareness for classes and studios among local fitness users, and consequently there is a pressure for studios to join in order to compete for local member awareness and attendance.
The platform has also received some push back from users due to the policy limiting each member to 3 classes a month at each studio. The company has committed to this limit in order to protect the boutique studios from cannibalizing their own members. ClassPass creates value for the studio partners by filling empty spots in classes. The fitness users who book through ClassPass pay a discount compared to booking through a studio directly, but the studio uses its excess inventory. This two-sided platform benefits both parties involved and ultimately drives future ClassPass usage and increased adoption of the platform.
ClassPass has established a sustainable platform that benefits all parties involved. This mutual relationship drives a “flywheel” effect for the platform and perpetuates engagement from both fitness studios and attendees. The scaling costs are also extremely low for the platform, which allows for potential significant growth in the future.
With ClassPass “Fitness everywhere, for everyone” is a goal that is both reasonable and achievable.
Thanks for the post, Amy! I was a Classpass customer and love the product. However, I was definitely an expensive customer for them given I would maximize the referral and sign-up discounts, go to the most expensive studios they offered (Flywheel at the time), and then just continue as a Flywheel customer (not a Classpass customer) once my free / promotional credits were used. Although I have not used Classpass in years, I wonder if there is a way for Classpass to fully own the customer experience, instead of just being an acquisition channel for studios.
Hi Amy, super exciting blog!
In Europe, the Competitor Urban Sports Club is very popular – they work with three package models (S, M, L), rather than number of credits. I have a similar point to Manuel – of all the friends I’ve spoken to, they all use Classpass just to “disintermediate” the actual gym, i.e. they sign up to Classpass with ever new emails etc to take advantage of the opening discounts to get discounted tickets to gyms like Barrys. Do you see a trend there? How long do users really stay loyal?
Also, I was there when my friend at the gym asked if they could be found on classpass, the receptionist seemed very pissy and stuttered around, you could clearly see she didn’t want to say it. I think it’s a similar phenomenon as being advised in the store and then ordering the product online at a cheaper store…. The studios are losing their credibility…why would I pay more locally when it costs half as much on class pass? I am curious to see how this dynamic will develop and if both consumer and luxury gyms will stay on board, or only use it to get a first interaction going..
Thank you for the post Amy! I like the concept of being able to try different studios by having this subscription as you might not know if you end up liking that studio after committing to a monthly pass. I also agree with your point that once they manage to onboard a certain number of studios, it gets easy for them to scale. If I were a studio, I do not want to miss an opportunity to be a part of this when most of your competitors are on the platform. On the other hand, I would love to learn how incumbent studios react to them when it comes to their own monthly pass. Are they adding different benefits? Are they making it more affordable? Perhaps it’s interesting to see those reactions!
Great post Amy! I echo the sentiment on how customers feel frustrated that there’s a limit to the class/month at the same studio, this was one of the things that I didn’t like when I was a Classpass customer. Additionally, I felt like it seemed more expensive when they transitioned to booking classes by credits and assigning more credits to the most popular classes – which as a monetization strategy seems reasonable.
I think its also played to their benefit that they have been able to get popular studios such as Barry’s Bootcamp onboard their app to also keep customers engaged on the platform. A big question is whether customers will end up churning more to be part of a specific studio they feel targets all their fitness needs such as Barry’s (which has developed a culture in itself) and leave the platform.
Hi Amy, thank you so much for your post! I enjoy reading about this new way of visiting different gyms, fitness studios, salons and spas in different locations. It is really convenient for people who often need to travel a lot but still want to stay healthy. However, I wonder if it is convenient and motivating enough for people who live in one place often enough that they want to get into a local gym nearby instead of traveling long distances to a new place to try a new class. Also, if they keep the same options every time with slow updates, does their loyalty remain as other studios are creating monthly passes as well?
Thank you for an interesting blog Amy! Classpass has definitely created a very interesting business model and has build a flywheel that is commendable. But while I was reading it, I could see the main lever for value creation that classpass is providing fitness service at a lower price through subscription model compared to if the customers go directly to the particular studio, or providing referral or sign up discounts which I think will create the adverse selection problem for the business. Such that only price sensitive customers will be attracted to classpass which will in turn cause a bigger issue of customer retention. I’m really curious to know how ClassPass have addressed that issue, cause this flywheel only work if there is customer stickiness but if the business is attracting the wrong price sensitive customers that can cause the flywheel to break in no time.
Great post, Amy, and you inspired me to write my blog post about a similar fitness marketplace (Gympass, like Classpass but for the B2B market). I find it interesting that there is such a push around bundling disparate fitness and wellness experiences, given consumers already do this in their everyday lives (e.g., SoulCycle class on Sunday, Barry’s on Wednesday, yoga and skincare on Thursday…). But, this becomes really hard to replicate unless EVERYONE participates from a partner perspective, as consumers have high discretion on which brands they want to use and when. So, I think you hit the nail on the head in mentioning that their success relies on signing up more high-quality partners.
I, for one, used ClassPass in SF to go to the Crunch gym without having to pay a monthly membership fee since I was only there for a short time. However, when I moved to LA, I churned from the platform due to extreme scarcity of gyms or classes I was interested in. So, I think density of studios/services offered is also important.
Thanks for the post! I love ClassPass. It is such a great way to make new friends in new cities while keeping helathy. However, the value fo the variety of the offering, quickly decreases. Once I find the class I like, I don’t really new to pay for the option to go to other clasess. For this, I wonder how sustainable ClassPass is.