Expert Panel: Pricing your Activities
A full run-through of Hoop’s December 2018 panel discussion, where experts from the family activity sector shared their own experiences about what works and what doesn’t with regard to free and paid trials.
On 5th December 2018, Hoop hosted a panel discussion with experts from the family activity sector, looking at the benefits and challenges of paid vs free trials when trying to attract new customers.
In a wide-ranging discussion, the panel shared insights from their own experiences, revealing the things that work and how to avoid potential pitfalls when pricing your activities whatever the types of class you run.
The discussion was moderated by Hoop co-founder, Max Jennings as part of Hoop’s December 2018 networking event.
Read on below for the full discussion, or get all the best bits from our 7 Key Insights on Pricing Your Activities.
Meet the Expert Panellists
Lucy Quick, co-founder & Principal of Perform
Lucy Quick co-founded Perform in 2000 as a new kind of drama school, using specially devised activities to develop children’s confidence, concentration, communication and coordination.
Perform has grown to over 300 venues across London and the South and West of England, encompassing hundreds of weekly classes and holiday courses.
Anne-Marie Martin, founder of diddi dance & franchise owner for SE London
diddi dance aims to inspire children to enjoy learning new skills and being active, and to help families and communities adopt healthy habits for life.
A franchised company that provides action-packed dance classes for toddlers and pre-schoolers, diddi dance is the only pre-school activity class in the UK that teaches 16 different dance styles, including Bollywood, Salsa, Hip Hop, Ballroom and Jive.
Amanda Frolich, founder of Amanda’s Action Club
Amanda’s classes have energy, excitement and an educational element too. Singing, dancing and interactive physical activities are combined to create sessions suitable for children from four months to four years.
Amanda’s aim is to promote physical development in a fun setting from an early age, giving children the confidence and enthusiasm to continue this in later life.
André Moses, Head of Growth at The Little Foxes Club
Launched in 2007 in London, to build community through the unity and love of sports, by organising match-play and training sessions with children from the surrounding areas.
The Little Foxes Club has grown significantly over the last 11 years with an increasing number of children from local neighbourhoods attending their sports club events.They offer football, rugby, tennis, gymnastics classes and workshops, aimed at promoting health and social development benefits.
The Full Discussion: Read the Transcript
Hoop: Lucy, You're running free trials at the moment. Is that something you've always run before?
Lucy Quick, co-founder and Principal of Perform: Yes. I started Perform in January 2000 and we didn't have the online advertising options that you have these days. I think it was Kids Out magazine, that was our main form of advertising back then. We put that Perform is starting January 2000 and we had nobody call us. Then, we ... I can't remember how we did it, but we said we were going to do a free trial and we had ... I think it was like five children that turned up on the first day and four after those five signed up.
In my experience from January 2000, free trials was the way that we started, we got children to come. I think it's important especially if you're doing something slightly different to give parents the option to come and try it. We don't let the parents in the room to watch, but we think it's important that the child feels it's an activity for them and the free trial does that.
Hoop: Just following on from that, is there anything specific that you do or you've refined over the years, to make sure they go from that free trial to actually going on to book?
Lucy, Perform: I think it's just about the enjoyment of the class. It's about giving parents the information when they come to the free trial, so finding out why they want to come to Perform.
What can we help the child with? We call it the four C's, so confidence, communication, coordination, concentration. It's to help the parents understand why Perform can help their child, but also the child enjoying it as well and having the best fun when they're there.
Hoop: Thank you. André, you've recently switched to paid trials. Do you want to talk about your experience since switching?
André Moses, Head of Growth at The Little Foxes Club: We started in 2007 and up until last term, we always offered free trials. It wasn't until we actually realised there was a glitch of our website that we actually might have to offer it, to make it paid. So we switched for the autumn term.
We didn't announce it. We just said, for the new customers going forward, you would have to pay a price of one class. Looking at the data I would say there hasn't been a change, which is quite weird.
On average we'll probably get a 30% conversion rate. Since changing from free to paid, there's not been a change really.
Going forward we’ll look at more data because we're quite heavily data driven, and try to understand ... Is a parent more likely to book if it's free during the summertime vs. autumn time or springtime? I think we just need a bit more time to look at all of the data to make a decision, really.
Hoop: Building on that, because data is really important when you're thinking about that conversion, how do you think about how you value a customer over the lifetime that they're with you?
André, The Little Foxes Club: Definitely. Generally for a parent ... say their child's in Little a Foxes class, on average for between three to four years. So if you're looking at it from a trial, they might pay £10 where they're actually then staying another four years. So you do have to look at it, and think, what is the long term value of that customer, and also what additional business that customer may bring ... Especially if you offer different services like birthday parties or if they work at schools. I think it is important to look at the actual lifetime value of a customer rather than just focusing on that trial price, or if it's free or paid.
Hoop: Amanda, you do a lot of different things with your pricing. Obviously, you're focused on a slightly younger age bracket as well. Have you tested trials before? Or you've always been dedicated to making this open and as easy as possible for people to drop in?
Amanda Frolich, founder of Amanda’s Action Club: Many years ago, we used to offer free trials, but it just seemed that everyone was turning up for half term and summer holidays. When we found that, we decided to switch to paid trials. It's absolutely fine. It's better. We can control it.
Hoop: How do you ensure that people are coming back to you class?
Amanda, Amanda’s Action Club: I just think as an instructor if you've got that enthusiasm and you're very sociable, you can work well with the parents, you make it fun for everybody. I just hope that it's engaging enough for them to return week after week. It really comes down to the quality of work … and also the quality of the teacher who's teaching. I'm such a control freak, that's why I'm still working in my business rather than working on the business.
Hoop: Anne-Marie, you cover a similar sort of age bracket to Amanda. You also run free trials. Do you want to talk about your thinking behind that?
Anne-Marie Martin, founder of diddi dance: I think the same as Lucy. When I started diddi dance, that was 15 years ago. It was a very different feel then. That was the done thing. You did a free trial and then you booked up for the sessions. Now, because I franchised the company, I'm not thinking geographically just in my area which is southeast London. I have to think about my franchisees in Aberdeen. I have to think about them in Plymouth. For me, that one size doesn't fit all.
We look at different dance styles every half term, so we explore 16 different dance styles, and we hope that that creates that wanting to come back. They're booking because they're going to develop over the weeks. They're going to really get a sense of that dance style that they're learning, and then the following half term we hope that they rebook because they get a whole different dance style for the next half term.
We are toying with going from free trials to paid trials or a three-week trial block, because as we know under fives, you can't always get a feel for it in one class. I see toddlers, 15 years ago, come running in, not a care in the world, big and confident. Then nowadays they come in clinging on to mum, and they can't get that valuable experience in one class, so you're trying to then convince them to come back and try again. Really, two to three sessions is about the time when they're really developing, if it's something that they love doing or whether it was just a barrier to confidence.
(lastly on) free trials … You might get a child who comes for a free trial and doesn't sign up, but they're on your database so on your mailing list. So sometimes a free trial is good because people might not commit straight away, or they might buy a birthday party from you or something like that.
Hoop: How much do you all think about your pricing? It's interesting hearing you all talk about ... the wealth of opportunity for parents. So much incredible stuff going on, do you set your prices based upon the local competition?
Anne-Marie, diddi dance: Well again, that's very regional. It's about making sure that it works for the business ... We're all business owners at the end of the day. We're not just doing this as a hobby that I think a lot of our parents think, "Oh, that's very nice. Your husband must be very rich." No, actually it pays my mortgage and pays for my children's clothes. I'm not just doing it as a hobby.
It's about analysing your profit margins and then it's looking at each franchisee's area. So I might spend £30 to £35 for my venue for one hour. Some of my franchisees spend £8. So the value has got to be relative to what your expenses are. What you're paying your teachers, or if you're doing it yourself.
You've got to do your market research, so make sure you're on par with everybody else in your area, but I make sure I tell my franchisees, do not go in there and undercut anybody else. That's not the business we're in. We're not out to do that.
Also, don't devalue what you're doing. Believe in what you're doing. There is a price involved to this and there's the benefits of this. There's the research and the evidence that we've done to support why we're doing this and the passion that we're doing this for. Don't undervalue that.