Something in the world of floating have you stumped?
Earlier this year, Float On changed its membership structure along with its prices. It was mentioned on the podcast a little while ago, but it was still too early in the change to extract any meaningful data from it. The guys promised to get back to it.
Before it’s too late, Graham and Ashkahn fulfill their promise to divulge how their single priced membership structure is going.
If you’d like to sign up to ask a question on our two-hour call-in show, November 29th at 3 pm PST, go to floattanksolutions.com/dsplive.
Here’s a look at the old membership structure, when prices were $65/float
This is the new single price membership structure with prices at $77/float
And here’s a collage of cute red panda pictures. The REAL reason you’re reading down this far.
Listen to Just the Audio
Transcription of this episode… (in case you prefer reading)
Ashkahn: Hey everybody, this is Ashkahn.
Graham: And I am Graham over here and we got an announcement.
Ashkahn: Yeah, and the announcement is this is one of our few teary eyed remaining episodes. I’m starting to get a little sentimental. We’re really down there now.
Graham: Yeah, or up there.
Ashkahn: Or up there.
Graham: I’m a guy up there. Yeah.
Ashkahn: So, yeah, we’re wrapping things up here, but we do have one final shabang coming your way.
Graham: Yep. November 29th, 3:00 to 5:00 PM Pacific Time.
Ashkahn: We’re doing a live two hour call-in show.
Graham: That’s 120 minutes.
Ashkahn: That is that number times 60 amount of seconds.
Graham: Crazy, huh?
Ashkahn: It’s insane.
Graham: So tune in, ask us questions live, try to stump us. It’ll be fun. Yeah.
Graham: And in the meantime, we have another question to answer and sent in by your adoring, adoring fan base.
Ashkahn: Yeah. Say it kind of nice and slow, it’s really gonna savor it.
Graham: Yeah. I remember earlier in the autumnal days of youth, we have spring days of youth, autumnal doesn’t work here. Okay, here’s the question. It does start with, ‘I remember’.
Graham: “I remember you mentioning before that you changed your membership structure. How is that going for you?” Yep. So you remember correctly.
Ashkahn: Yeah, we did mention that before.
Graham: Yep. And we did also do it, we didn’t just say it.
Ashkahn: I said we would talk about it later. I’m glad you brought this back up.
Graham: And we’re getting …
Ashkahn: Because I wasn’t gonna talk about it later. It was just a lie.
Graham: Let’s talk about what we did.
Ashkahn: Yeah, what did we do? We have a float center-
Graham: Now you’ve toasted yourself there.
Ashkahn: We’ve got a float center and we have memberships, and we’ve started for pretty much all of the years leading up to this last one, we ran a tiered membership structure that was pretty straightforward. We had a two float a month plan. We had a four float a month plan. We had an eight float a month plan and some years after we establish those, we also started including a full year membership where you get 52 floats upfront for the year.
Graham: Yep. And so, the price range on those was it went down. So our price was also lower back then, we were charging $65 for floats and the memberships just got cheaper per float down to around $42 per float for eight floats a month. And the yearly one was $1,560 for 52 floats. So it worked out to about or that was before our price raise. Yeah. So then we still have a yearly membership now. I got that right. Did I switch myself out there for a second? I got in my head, “What’s going on? Where are we? Where are we?”
Ashkahn: It’s all good.
Graham: Right. So $1,560 was our previous yearly membership? So $30 a float. That’s what that works out to
Ashkahn: Yeah, and our policies were all pretty lenient. Your floats would roll over. They weren’t expiring at the end of each month. You could share them with anybody.
Graham: There was no contract. You didn’t have to stay on for a certain number of months and you’ve got an extra little discount on retail.
Ashkahn: Yeah. And we’d give you two high fives when you left the Float Tank instead of just the normal one high five we give everybody.
Graham: That’s called member retention. And so, what we changed it to was the other most popular model in the float industry, which is a simpler one, which is what struck us about it. We really like simplicity in general. So it’s one float a month and there’s some variations on this. We went with a simple one with our own little twists that I’ll get into, but basically, it’s there’s one membership, you get one float a month, in our case it’s $54 a month and our price of floats now is $77. By the way, we’ll throw images of what our memberships looked like before and after in the show notes. So trying to describe them verbally, it doesn’t drive you insane.
Ashkahn: And we’re gonna have also images of red pandas doing very cute things mixed in there.
Graham: So yeah, just to get you to actually go over to the website. And we added on, So it’s $54 per float and you can buy any extra floats as long as you’re a member for that $54. Is the basic gist, again, with some Float On spice.
Ashkahn: Yeah. So the little spice we threw in there was we wanted a way to encourage people. What we liked about the other membership structure was that there was, if you got four floats in a month, there was an inherent motivation built in to float four times that month, and we wanted to keep some of that fire. And so we wanted to have something in our new membership structure that also encouraged people to float more than just the one time for the one float they automatically get charged every month. So what we decided was that after you float six times, your floats just become free for the rest of the month.
Graham: Yep. And so that works out to $324 if I’m not mistaken. And that’s actually more than a lot of centers do for unlimited memberships. So it’s our way of having, actually, an unlimited membership also added into our menu without complicating things. It’s just like if there’s a month that you wanna go unlimited, you can essentially just pay $324 and you can float as much as you want for that month. But it doesn’t break the bank when all of a sudden you have this unlimited membership and you’re not coming in because in that case, you’re just getting a float and paying the $54 for it.
Ashkahn: A couple of other details, you can still share your floats, so you can even share your deal of getting the $54 floats with friends and stuff like that except for the unlimited ones. Those are just for you.
Graham: Yeah. I guess just to explain, I always get questions when I explain the unlimited thing. So just to go into a little more depth there, because you can share them, it’s worth specifying the person holding the membership has to be the one to float six times and only they get unlimited floats. So other people floating on their account doesn’t contribute towards it nor can they share their free floats with other people once they go unlimited. So it’s like your personal super power up.
Ashkahn: Right? But then you can bring your friends in and they pay $54 instead of our $77 full price.
Graham: Yeah. Exactly.
Ashkahn: And we did put an actual three month a minimum on it. So just to stop people from literally coming in, grabbing their one float for that one day with it.
Graham: Because we didn’t have a one float a month option before, it started at two floats. So at least if someone bought a two float package and then canceled that month because we were so lenient, they’d at least bought a bulk number of floats. And in this case, if you can cancel in the first month, there’s just such an obvious path to you wanna float once and pay less for it. And so you can just get the membership and cancel immediately. So even though we didn’t want to, we added a three months minimum and that’s also our way of combining a three float intro pack, which is really common in other float centers.
Likewise just into this single membership. It’s kind of you get the three months spread out over … Sorry, the three floats spread out over those three months, but you’re only getting one float per month. So it’s not exactly the same as the bundle.
Ashkahn: Yeah. And we do still have our yearly membership, so we upped the price appropriately with our price raise, but we kept that around because it was really popular and it’s awesome when people buy it. And I guess other than that, we don’t really have packages. We didn’t before nor do we now. We secretly do if someone really asks and that-
Graham: The secret menu.
Ashkahn: … is exactly what works for them. We know we have some prices figured out for bulk packages, but we don’t advertise them, we don’t push people towards them. So really, our model is full price floats and memberships, and that’s really it.
Graham: So yeah, we pulled up some numbers of how things actually went between our old membership and then the switchover to the new one.
Ashkahn: Yeah. How did they go?
Graham: I think they went really well. I’m not eager to switch back to the tiered structure, at least not the one that we had looking at these and I’m pretty happy with the results, yeah. How are you feeling?
Ashkahn: I feel nice.
Graham: Cool. Thanks for the question and we’ll-
Ashkahn: Before we delve into specifics here, one thing that we have to point out is that we changed our membership structure and our general pricing.
Graham: And our haircuts all simultaneously.
Ashkahn: All at the same time. Yeah, right at the same time. Like while I was getting a haircut, I was changing our website.
Graham: Which makes it a little hard to figure out exactly what role the membership change had separate from our general price raise.
Ashkahn: Yeah. So we went from $65 to $77 a float at the same time that we did this membership swap, and we grandfathered all of our existing members in to this new membership model at the price per float that they were paying, which was like a little bit of a better deal because it was based on our old $65 float price.
Graham: Yep. So people who were our eight float members I think get $42 or $42.50 is what they pay, but they only have to commit to one float and they can buy as many other floats at that $42.50 is they want as long as they don’t cancel their membership. Yeah. I was just gonna mention that one too. Always grandfather, like always treat the people who have been with you for the longest the best. I always think it’s worth taking a little bit of a hit on the business just to not charge people more. And especially if it’s something as weird as floating, just embrace the people who embraced you early on, were those weird early adopters. Treat them as, as well as you can.
And as a result of that, actually, during this price raise we grandfathered people in who had been around for the previous price raise that we’d done three years prior. So we-
Ashkahn: So they’re getting a really good deal.
Graham: Yeah, they’re getting a great deal and that we’ve now had certain members for over four years, which is crazy for a length of membership. Anyway, that’s what happens when you treat people well and I’m sure that they’re some of the best advocates for us and create just amazing word of mouth too. So, in analyzing the data, we looked at eight months leading up to the change and then eight months after the change to get a representative idea of how it had gone. And we’ll just start with the overall numbers. Beforehand, we were a little under 100. So I feel like we would fluctuate between around 80 and 90 at the time that we were switching.
Ashkahn: And that was we definitely had the most people on our two float a month membership.
Graham: Yeah, it was about … I think it was two thirds that were on our two float a month membership.
Ashkahn: Yeah, and then respectively less on the four float a month then-
Graham: Yeah, about two thirds of the remaining were on the four floats a month actually. And they really broke down very-
Ashkahn: Two thirds of the remaining of those are on the eight float of the month. And then two thirds of that last remaining were-
Graham: So yeah, so we had around 80, 90, mostly two floats a month. And after the change, it really quickly went up to around 250 and that’s where it’s been hovering. It didn’t get up above that during the months that we’ll be looking at, but right now we’re at around 265, 270, so it started climbing up on average a little bit higher as well. And that alone is awesome. Even if it means that people aren’t floating as much, maybe they’re just getting in one time a month instead of two, that’s still so many more people who are making floating part of their habit and the can actually say that they’re a Float On member, which is cool advertising to have out there in the world and again, generating more word of mouth.
Our churn before was really high and a lot of that came from people who just had our memberships for one or two months. So, although we had people who stuck around and treated us fairly for not having any cancellation contract with the memberships, we also had people who would just hop on for a month or two and bail, and treated much more like a package kind of deal. And that has gone down. We still have a decent number of members who leave each month. But the average member lifetime has also extended just along with having that three month minimum as you’d expect.
Ashkahn: Yeah, and we still see a lot of trial of our numbers only move a couple of each month. We may go from 260 to 263 members. What that usually looks like behind the scenes is that 23 people signed up and 20 people canceled their memberships.
Graham: Yep. And overall it’s been more months in the positive for since we switched our membership. So if we look at just the eight months beforehand and the eight months after, the net gain on average beforehand was about one per month when you look at the average, and the net gain of members for the eight months afterwards was 10 on average that we’re gaining even with the months that you lose things. And afterwards, there was only one month where we met lost members and beforehand, there were three during that eight. So it was almost half of the eight that was a loss.
So immediately that’s 10X improvement in terms of member growth versus just retention. And I’m sure some of that has to do with converting regular floaters over to our new now that it’s just one float a month.
Ashkahn: Yeah. It’s a much easier kind of ramp.
Graham: Yep. So there’s the stats on that one and then the other really big one that I think is worth looking at is just what did this mean for the bottom line? How much revenue are we pulling in for these different membership models? And there’s a couple ways to look at it, and one is just how much money are the memberships themselves bringing in? So on average for the eight months before the price raise, so for our tiered memberships, it was about $13,000 a month brought in from members from actual membership money, and afterwards, it was about $13,000 brought in from membership money. So very, very similar in terms of the averages there, but-
Ashkahn: There’s a twist.
Graham: There’s a twist!. When you start not counting just the membership revenue but how much money members spent outside of just spending money on their membership, there was a pretty drastic difference. So there, it went from $13,600, so very similar to what the full price was. Basically, members beforehand weren’t buying a lot of extra floats on their membership.
Ashkahn: As you can imagine, which makes sense.
Graham: And afterwards, that went up to $17,200. So as expected, just having one float a month, a lot of members are taking advantage of buying some extra floats to go along with that, several thousand dollars’ worth per month. So.
Ashkahn: And that’s really the most like apples to apples way to compare these two numbers.
Graham: Yeah, yeah, I’d say like raw numbers of members plus, yeah, that revenue is the two big things to look at. And sure, I guess all of the ones we’ve covered so far are good to look at, but yeah.
Ashkahn: But yeah, in terms of trying to see how much money’s coming in from memberships, like with this new model, you have to count the extra floats people are doing that’s part of their membership.
Graham: Otherwise it just doesn’t make sense.
Ashkahn: It doesn’t make sense.
Graham: So, $17,200 on average over the eight months after the membership change as opposed to $13,600 beforehand. So I’d call that a pretty clear win. Again, we could keep going on endlessly looking into a lot of these details. Oh, there is one more, there’s one more, I didn’t put it on my spreadsheet. I had one more I wanted to mention. How is our unlimited thing going? That’s a weird thing that we did, right?
Ashkahn: Are we out of business now?
Graham: No, we’re just out of podcast. Not that many people take advantage of it.
Ashkahn: Surprisingly not month after month after month.
Graham: Yeah. There’s some people who are like, “This is gonna be my unlimited month,” and they’ll just do it for that one month and that’s it.
Ashkahn: And it’s awesome when they’re doing that because they’ll hit it like six days or something like that. They’re like really on a bender trying to do as many floats as possible. And you get to see them coming in everyday and you’re almost like encouraging them. It’s like handing the little cups of water when they’re running a marathon, you’re like, “Yeah, you got it!”
Graham: So over the last many months, it’s been about three or four people that go unlimited and typically about two of those are really taking advantage of it. They’re doing between 15 to 20 plus floats per person, and that’s just two people who were using it that much. And the other one or the other two, typically, are just getting two to four free floats. It’s like they floated enough just to take advantage of it and usually buy late in the month, and then they get some free floats on the house, and that’s it. Out of 250 plus members, really not that many people are going unlimited and like Ashkahn said, I’m stoked when they do. I think it’s awesome.
I’d feel differently if it was like 30 people are just taking up all of our float tanks every day. But clearly, that is not the case.
Ashkahn: It’s kind of self-correcting just because it’s a very time consuming thing to do.
Graham: Yep. And because we don’t require them to subscribe that unlimited thing month after month, I think being able to decide when you go unlimited and then just revert back to normal member status also helps us retain those members and yeah, not make it too crazy. So I’m really happy with it. Like I think it was a huge success. I like that it’s simpler, like there’s one main option or a yearly membership, 52 floats once that people are presented with. And I think it makes it easier to convert members. I think we’re seeing that both in the amount of new members coming on being higher and general retention being longer as well. So.
Ashkahn: And in both models, our year membership has been doing well.
Ashkahn: We put it up there because we just wanted to have really great price anchoring and have just this one giant price that made all the other ones seem extremely reasonable in comparison, and then people started buying it. Like someone just spent like $1,500 and bought a year’s worth of floats with us and then someone else bought one, and those are great.
Graham: We’ve sold about two a month. When you look at it, we’ll have about 24 active yearly members during a year, which is wild. Again, totally unexpected, but if you haven’t played around with a really high price, big bulk option, like 52 floats a month, and now it’s $1,820 is what we charge, so $35 per float.
Ashkahn: Still a pretty good discount off of the $77.
Graham: Of $77, yeah. Less than or more than 50% off, yeah. Oh, I see. Yeah, that too.
Ashkahn: You guys should be members at our place, right? We’ve not convinced you yet?
Graham: Cool. Well, that’s been fun. It was actually really nice going through all of these stats too. I hadn’t looked at as in depth before going into the podcast. So yeah, thanks for the excuse to dive into those live on air.
Ashkahn: Yeah. And if you guys have more questions, you can go to floattanksolutions.com/suckit because we’re not taking any more questions.
Graham: Yep. You have to ask them live on the call-in show 29th, 3:00 to 5:00 PM. That’s your last chance, Pacific Time, Pacific Time, Pacific Time.
Ashkahn: I’ll see you later.
Graham: See you later. Pacific Time.
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