A little while ago, Float On changed from a tiered membership system to single priced memberships. There’s a lot of debate in the float industry as to which one is better but there are clear and valid arguments for and against. We even did a podcast episode about this very topic.
So here’s a little bit to explain our memberships before the change, what we changed, and the effect that we’ve seen from it overall. Some of this will be a repeat of the information shared on the podcast episode, but I’ll try to keep the summary brief.
The tiered membership structure we had before at Float On was a little complicated. Not incredibly so, but just enough to clutter up our menu a little.
The tiered memberships had:
- no commitment
- customers could purchase additional floats at their membership rate
- floats were shareable and giftable
- Floats never expired.
It’s important to note that we raised our prices for our floats at this time as well. Prior to this change, our 90-minute floats were $65 and our 2 ½ hours late night floats were $75.
How our membership offerings used to look
Our lowest tiered memberships were 2 floats a month at $110 ($55/float). We would often have customers kinda “try out” this membership for a cheaper float for two people and then cancel the following month. About 67% of our members were on this tier of membership.
Next tier was 4 floats a month at $190 ($47.50/float). This accounted for roughly 22% of our memberships.
Following tier was 8 floats a month for $340 ($42.50/float), which was
pretty much our remainder of the memberships, with the exception of a
handful of those who had joined our yearly membership or had custom
memberships with us.
Our yearly membership is actually a package. It’s 52 floats bundled together. Prior to our price raise, it was $1560 for the package ($30/float).
As with most tiered memberships, the discounts were better as more floats were purchased. Our goal was to get members to commit to floating as often as possible. We also enjoy making the floats shareable as members will bring new customers in and introduce them to floating.
Now, to get to what we changed and why.
First off, we started considering a membership change because we knew we were going to have to raise our normal prices. We were going up to $77 per float. No difference in price regardless of whether it was 90-minutes or late night, 2 ½ hour floats.
Instead of a tiered membership program, we wanted to simplify our menu and make things more accessible, not just for our members, but for our other customers as well. Instead of this giant clunky menu with different memberships and certain levels of discount, we wanted a single membership option. So if you’re a member, you get floats for $54 a piece.
We included a minimum 3-month commitment to our membership given that the potential for abuse was much higher when you only had to commit to a single float.
If a member floats 6 times in a month, the rest of their floats for the month are free. So someone could (and people have) come in during the first six days of the month for $54 each, and float every day during the rest of the month for free. This was our way of incentivizing frequent floating and letting customers know that it’s normal to float that much. It also let us bundle an unlimited membership option into the membership. It comes out to $324 to go unlimited.
Okay, now some things we kept.
We kept our yearly membership package but priced it a little higher. It went from $1560 to $1820 ($35/float). It’s still our lowest price for floats and our best deal. After having one to two people a month buy one of these packages, it seemed crazy to let it go. So we didn’t.
We also made sure that member floats were still shareable (although shared floats don’t count towards the member’s unlimited goal).
The other thing we kept was everyone’s old membership prices. We have some members that have been floating with us for 4 years or more, and we wanted to make sure we rewarded them for that.
We decided to compile data on our membership sales, total dollars brought in by members, and compare eight months before and eight months after the change.
Here you can see the total members we gained and lost. The membership change took place in December. For processing our numbers, we essentially removed all our members and re-added them in the same month, creating that massive spike in December. The more significant metrics to pay attention to are the before and after numbers.
While you can see that retention is generally better with our new system, that’s somewhat to be expected with a new type of membership, especially one with a 3-month commitment, compared to our tiered membership structure, where no commitment was required. It is nice to see that the only month that we saw an actual reduction in memberships since the change was immediately following our changeover and summer sale.
The most noticeable change is our monthly member averages. We went from averaging between 80-90 at the end of every month without much fluctuation. In our new membership model, that number has increased to about 250 at the end of the month. Nice, but not surprising. Previously, we used to have members “share” a membership with multiple floats, kinda like a family plan. Now that there’s no incentive to do that anymore, each member gets their own membership.
Show Me the Money!
What’s perhaps more interesting to look at is how much money our members are spending. Now that there’s no minimum requirement for the number of floats, are members less inclined to spend more money?
We’ve tracked all the money our members spend in total along with how much they spend on other things, which includes floats for non-members with their membership discount (along with all the other cool things in our shop like books, supplements, and color therapy glasses)
All membership revenue before and after the price change. It’s important to mention that the significant uptick in sales in June has a lot to do with our very successful Summer sale that occurred at the same time.
We already know that members share floats with non-members. In the tiered membership structure, it was very much encouraged! If all things were equal, we would’ve seen only a marginal increase in sales offset by lower overall membership costs. However, what we’ve seen is the revenue from memberships has gone up AND the revenue that members spend outside of memberships has increased as well.
The only month this didn’t happen was in November, where our members spent less than membership costs.
So you can see that not only are we earning more out of our memberships, on average, our members are spending more money in our shop overall.
As for our unlimited membership, it hasn’t had a negative impact on our business much at all. We only have about 3-4 people take us up on it each month, and of those only a couple usually do more than 10 floats. And when they do, it’s more like taking up a challenge. We get to be there cheering them on as they strive to do the most floats they ever have in a month.
The end result
All of this is interesting, but it does leave some questions unanswered that were too complicated for us to parse out with our current methods of tracking. It’d be nice to see things like the average number of floats purchased per member or a clear conversion of past customers who eventually become members, but right now there are too many things confounding those numbers to get a clear answer.
Additionally, it’s still too early to be looking at “total lifetime membership” between the two models. As you did see, at our 3-month point, we did experience a drop off in membership, but even with that, we’ve experienced a lower churn rate (so far) than our previous membership system.
It’ll be interesting to check back on all this when our membership has reached a point of stasis and we can track yearly trends with memberships from both models, but even in the short term, I think the results have been positive.
Of course, none of this matters if it’s a disservice to our members, but so far the feedback has been good as well. It seems like our members like the simplicity and recognize that membership at Float On is about so much more than the bottom line, we really do go out of our way to make them feel special.
To all you cool cats down this far on the page, thanks for reading! This has been a very informative process for us.
For those of you that have tried messing around with your memberships and packages, how did it work for you? What did you start with and what did you end up with? Let us know!