Cryotherapy Business Pricing: Membership or per Session?
One of the hardest business decisions you're going to have to make when establishing your cryo business is setting prices for your services. Generally speaking high prices discourage customers from visiting your premises while low pricing will cut into the business profits, rendering it unsustainable.¹
Membership vs. Session pricing: what works best?
The main dilemma in cryotherapy business pricing is whether to use the membership pricing model or the per-session pricing model.
Membership pricing allows the clients to pay periodic fees, after which they are entitled to receive your services through the period.
Per session pricing, on the other hand, is where the clients pay before or after a session for the cryotherapy services rendered.
So, which pricing model should you use for your cryotherapy business?
Benefits of Membership Pricing
Membership pricing has been growing in popularity in businesses worldwide. Research by Manifesto Growth Architects shows that 70% of businesses believe that membership and subscription models hold the key to future commercial growth and expansion.² Below are the key benefits of implementing membership pricing.
Predictable Cash Flow
Predicting the amount of cash coming in and that going out is a very valuable business advantage. Membership pricing allows you to estimate your revenues and costs accurately based on the members subscribing to your services in a given month. You can then plan for the cash and material requirements of the business during this period, making it easier for you to budget.
Upfront Payments
Subscription payments require payment before membership is renewed. This ensures that the business is always at an advantageous cash flow position.
It also reduces the chances of customer delaying or defaulting payments.
Improved Customer Satisfaction
Memberships allow you and your staff to interact with your clients over a period of time. This helps you to understand their likes and dislikes, enabling you to serve them better. You can also add and charge additional services to your members based on their preferences, adding a revenue stream, and improving customer satisfaction.
Opportunities for Upselling and Cross-Selling
If the client information is captured online, subscriptions offer your business opportunities to market your other services to the existing customer base.
Benefits of per Session Pricing
The price is usually set at the overall cost for the session, plus a mark-up. The XR chamber uses about 3-4 liters of nitrogen per session, or about five dollars. Everything else in your pricing after overhead is profit.
Price Set per Service Rendered
Prices in the subscription model are usually set as an estimate of the number of sessions and the additional services a customer might use over the membership period. This comes with risks such as the client failing to get value for their money or your business undercharging for the service. Per session selling is priced at the client's exact services, which is more accurate.
Higher Total Revenue per Service Offered
The per-session fees are generally higher than subscription fees when broken down to the actual services rendered. If the same services are offered during a particular month, you will likely earn more revenue in per-session pricing compared to membership pricing.
Clients Are More Likely to Explore Other Services
If you are offering various services, your clients are more likely to try the different services when on per session pricing than when on subscription pricing. Assuming you offer partial and full-body cryotherapy services, a client who has subscribed for partial body services will most likely not try full-body cryotherapy during the subscription period.
Which Pricing Model Is Best for Your Cryotherapy Business?
Choosing the right cryotherapy business pricing model is as important as getting a cryotherapy machine. It is beneficial to your business in terms of value addition, customer satisfaction, and revenue accumulation. Both pricing models have their pros and cons, so it's up to you to choose the model that suits you best. You can also create a hybrid model to get the best out of them while minimizing their shortcomings.
Founded on facts: for peer-reviewed articles, scholarly journals, and articles cited above please see the below sources.
Develop a pricing strategy - https://business.gov.au/Products-and-services/Develop-a-pricing-strategy
How To Make Money From Membership Economics - https://www.globalbankingandfinance.com/how-to-make-money-from-membership-economics/
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