Blog / LearningWednesday, July 15, 2020
A story from real life – that ended in revenue loss…
Once there were (and still is) a Danish company – more specifically a chain of gyms. Our chain of gyms, let’s call them Fitness X. They were successful. Things went so well that new centers were opened at a rapid pace. Both turnover and membership numbers increased rapidly and the coverage rate of a subscriber was good.
At least for some of them…
In order to recruit new members to new centers, they had an opening offer. A “giveaway” offer for the first 3 months of training. It should not cost more than DKK 25 a month for the first 3 months, after which you switched to the normal subscription price.
The customers loved it: They signed up, were excited about their new fitness center during these 3 months and were ready to continue their engagement despite the somewhat higher price they had to pay for their continued membership.
But something went wrong ... so bad that Fitness X lost otherwise expected revenue.
And why did they do that?
The handling of the opening offer could not be automated ... Fitness X's software was simply not flexible enough to handle different pricing models. This meant that the task of converting subscribers from DKK 25 monthly to normal subscription price became a manual task - a manual task that was forgotten…
It was only discovered 4 months after the offer expired, which meant that all subscribers in the new center had lost 4 months revenue on one's otherwise happy members (except the DKK 25 monthly).
How could this be avoided?
By having a Subscription Management Software that can handle a sea of different pricing models as well as converting to other pricing models within predefined ranges.
We've helped some companies with that already - should we help you?
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