Using Tula Software to Create Your Own Demand Based Pricing System

First, Some background:

Image via blog.wiser.com

The primary thing happening in the fitness industry and it’s relationship with technology right now is that software companies are aggressively moving to do to three main things:

1. Turn service providers (gyms, studios, salons, etc.) into commodities that provide them with "inventory" (class spots, appointments, etc.).

2. Build a relationship with consumers, so that consumers purchase their services through the software company, instead of through the service provider directly, so that the software company can make money processing credit cards.

3. Mine the data obtained through the above process, because in the new economy, data is the new oil. (Important: you have the oil!)

The problem with this approach for the independent business owner, is that it extracts an extraordinary amount of value from their business, while providing little value in return. Whether it’s Groupon, ClassPass or Mindbody’s Deals Engine, what they are ultimately offering you is an attendance at a discounted rate. Nothing more.

That they have consumers is not evidence of effective marketing on their part, for which you should be willing to turn over your schedule, attendance data, student credit card data, student email addresses, etc. in exchange for the magic marketing sauce they’ve made. 

No, the only thing happening is that basic laws of economics are at play: If you lower the price of something, demand will increase.

It’s critically important to understand: if companies such as Groupon and Mindbody were increasing demand for your service, they would be able to pay you MORE for your services than you are able to command on your own. That they ALWAYS pay you less is the only proof you need to know they are simply not able to provide you with more value than you can provide for yourself. Or more simply, you do not need them to sell your services for half price. You can do that all on your own.

The newest trend in the industry is that companies are working to build algorithms to determine when “inventory” (class spots) is available and adjust the pricing in the same way that uber does surge pricing. It’s called "Demand Based Pricing" or "Dynamic Pricing". 

Startups such as Lymbr and Dibs are doing this with the belief that they can eventually become "the uber of fitness", and Mindbody doesn't mind because they make money when these companies access your inventory through their system, as they charge a partner API fee. 

Mindbody announced yesterday on their quarterly losses call that they’ll be both “expanding their offering on the Mindbody connect app to go beyond intro offers” and that they’ll be partnering with Under Armour to give them access to “our inventory of fitness activities”.  The promise will be, as it always is, that they’ll increase demand for your service.

But you can rest assured it will once again be nothing more than a path through which a discounted attendance comes in through your door.

That's what all of this always amounts to: discounts.

Build your own system. Strengthen your own business.

I provide this background because I want our customers to understand how much power we’ve put into their hands with our updated credits system, and that it is yet another example of how we are the only technology company in the industry that is truly dedicated to empowering our customers. 

If you believe your business would benefit by occasionally altering your price for specific classes based on popularity, you can leverage the updated credits system we announced earlier this week. Maybe you’ll want to try making your early morning classes a half a credit. Maybe you have an evening class that is always sold out, all the time, and you want to see what would happen if you made it cost 1.5 or 2 credits. Or maybe you often do one on one privates, and you’d prefer to charge a higher price when appointments are scheduled on evenings and weekends.

I’m not saying you should do any of these things. What I am saying is that a lot of money is being spent, and a lot of talent is focused right now, on how to obtain data that you yourself have at your fingertips, and sell to consumers at different prices based on that data.

If you own a studio, and you use Tula, you can now build your very own demand based pricing system based on the reports already available, combined with your knowledge of your own business and your own community and our variable credits system.

And if you don’t use Tula, this is just the latest in a long string of examples of how we're different than any of our competitors, and you should definitely check us out.

Introducing variable cost class credits

I'm excited to announce today one of the biggest changes we've ever made to one of the most fundamental components of Tula: Our credits system. Beginning today, you can now choose to have regular classes cost any number of credits you like!

Previously, regular classes would always cost one credit, so that when you checked a student into a class, we'd always remove a single credit from the student's account. Now however, in addition to indicating that a class should cost one credit, you can also indicate that you'd like a class to cost 2, 3, 5 or even .5 or 1.5 credits.

This new functionality, combined with the existing ability to create special events where specific passes are tied to specific classes, gives our customers more power and flexibility than ever before. Of course, like everything we do with Tula, the final implementation is easy to use and simple for our customers to set up.

Why the change?

We've long advocated for simplicity and ease of use in our system, and always removing a single credit from a student account when they were checked into a class was one of the ways this philosophy made it into our product. As with everything though, there are tradeoffs.

Sometimes, this simplicity made things more complex in other areas. After numerous conversations with our customers though, it was clear that some people had to use special events as a work-around to charge more money for a class even though they would have preferred for it to remain a regular class.

The result was that for some people, their studio setup was more complicated that it ought to be because they had to use special events more often than they would have liked. This in turn required them to have more passes than they wanted. So a yoga studio that also offered a meditation class for example might have wanted to charge less money for that class - but that required them to make a special event and corresponding pass. This then required people with credits on file to still purchase a separate pass.

Now however, you could simply make that meditation class cost a half a credit if you wanted to.

With this latest release our customers get the best of both worlds: The ability to make individual events remove as few or as many credits as they like, AND the ability to create special events for the times when you truly do want to have specific passes for specific events for things like workshops, retreats and other one off events.

How it works

Like everything we do with Tula, we spent a great deal of time making sure that this new feature was easy to use, and that the interface remained instantly clear when investigating an individual account.

Now, when you create a new event, you'll notice a new field: Class Cost. We default this to one credit, but you can put in anything you like, including half credits.

Once you've created your class, you'll of course be able to see the cost of the class on the main event page / check-in page.

When looking at an individual student account, you'll also be able to see a few new pieces of information. On the attendances tab you'll see the exact cost of an attendance and which pass or collection of passes paid for the attendance (a 3 credit class might be paid for with 2 passes for example) and we now also show on the individual passes exactly how many credits remain on each pass.

More power, more simplicity

With this new feature we've given our customers more power than ever before, while also allowing them to keep their class and pass setups as simple as ever. It's our favorite kind of update and we hope you like it as much as we do!

Early Summer Updates!

For our customers that have been with us a while, you know we're constantly updating things with Tula and always working to make the product better. Coming off the release of the retention center, we've spent a bunch of time the first part of the summer working on a slew of little improvements all around the system. In no particular order, here are a bunch of updates we've recently pushed out:

Browser Updates

• Loads of performance improvements on Retention Center and Student Filtering. Filtering your students and sending off emails should be faster than ever.
• When credits are on reserve for classes that require payment, view which classes are reserving credits from the student profile page.
• Fixed a date issue on the people by passes report
• We now periodically update campaign stats to prevent customers from having to refresh the page
• Numerous inbound email enhancements so reply's from campaigns are handled more effectively
• Give customers the ability to manually unsubscribe people from receiving emails. Just click on the menu in their profile.

• Bring in the ability for customers to view open, click and unsubscribe information on campaigns once sent

• Give customers the ability to view open and click information on individual profiles for the email's they've been sent.

iOS Updates

In addition to the updates above, we've also submitted a number of enhancements to the iOS apps. These updates are still pending review by apple but should be available shortly:

• We've now enabled multi-tasking on the iPad app. Super helpful if you use multiple apps at once.
• email is now optional when adding new students, just like it is in the browser.
• When people have a check-in flag on their accounts, we'll now show the check in flag in the iOS apps.
• If people have negative credits we'll highlight the row in red to call it out more loudly - just like we do with special events if a student doesn't have a pass to that event.
• When preventing people from de-registering from an event that requires payment, we'll now pop a friendly message explaining why they can't deregister.

We'll be announcing all sorts of updates all summer long, and have a lot of great things in store for the months ahead. We hope you like some of these updates and we'll have more announcements soon!