Are memberships right for you? Answer these 5 questions to find out…

There’s no one-size-fits-all way to run your business.

Some gyms or training academies thrive on a membership-based business model, whereas others may most effectively operate on a “pay as you play” structure.

While there are pros and cons to every business model, there’s no doubt that memberships are one of the most reliable ways to bring in monthly revenue. So, are memberships right for your business?

Maybe you’ve read a little about what recurring revenue is, and the benefits it has on sports and fitness businesses. Or, maybe you’re just starting to turn your dreams of owning a business into reality.

No matter where you’re at in the process, we’ve outlined 5 questions that will help you determine if memberships are the right fit for your business!


Are memberships right for you? Let’s find out.

The critical first step is to reflect on your business and current offerings. Start by asking yourself these questions (and answer honestly):

  1. Do you have a hard time planning/ forecasting your revenue?
  2. Does your revenue fluctuate drastically month-to-month?
  3. Do you see the same clients more than 4x per month?
  4. Are there products/ services that your clients frequently purchase?
  5. Are you looking to form long term relationships with your clients?


Answers + Resources

If you answered “yes” to any of these questions (bonus points if you answered yes to all of them), then you will likely benefit from a membership-based business model! Let’s dive a little deeper.


1. Do you have a hard time planning/ forecasting revenue?

One way to help you forecast revenue is to incorporate auto-renewal memberships. Since memberships do not fluctuate in price, you are able to more effectively visualize your revenue, including how much to expect in the future.

Example: If you offer a $100/month membership and you have 10 clients enrolled, you’ve now secured $1000 in monthly recurring revenue. That means a guaranteed $1000 in February, in March, in April, etc., as long as you retain those members.

As you continue to collect membership data, you’ll be able to glean insights into your clients and their purchasing behavior. Using Membership Analytics by Upper Hand, you can view an interactive graph of your membership history as well as a prediction of your recurring revenue in real time.

Why is this important? When it comes to expanding your brand, a strong pulse on your financial health is critical to make decisions. Can you afford to hire additional staff to grow your offerings? Is now the right time to open a facility?


2. Does your revenue fluctuate month to month?

Similar to above, lack of steady income may also result in large fluctuations in revenue month-to-month. Tracking your monthly revenue will allow you to see which months are your strongest, and which months are not as profitable. While revenue will inherently ebb and flow based on the season, your offerings, or other factors, there are ways to minimize this variability.

By implementing a membership-based business model, you can establish a base of recurring income that you can count on each month. As a result, you’re able to stabilize your monthly income, which helps with planning for future growth or other investments.

Example: If you operate on a membership-based business model, you can track your monthly recurring revenue. Using Upper Hand’s Membership Analytics report, you can also visualize these fluctuations. As a result, you keep a pulse on your finances and make smarter, more informed decisions.

Get started with tracking your monthly recurring revenue with this free calculator!


3. Do you see the same clients more than 4x per month?

Seeing your clients consistently is a telling sign that you’ve been building strong relationships. A membership-based business model will facilitate relationships between your clients and staff members. How? Because they don’t have to constantly attempt to sell to your clients.

Not only do strong client relationships benefit you as the business owner, but there are also a number of advantages for your clients. Through memberships, they are able to make one monthly transaction rather than have to make a number of separate ones. Not only does this increase convenience, but it also helps to reduce unpaid balances and outstanding account balances. A win-win!


4. Are there products/ services that your clients buy frequently?

When your repeat clients come to train at your business, do they tend to gravitate towards the same offerings? Or, are there specific offerings that are the most popular amongst all of your athletes? If so, you may consider setting up membership options that incorporate those offerings.

For example, if you typically see an athlete once a week for lessons, consider creating a service-based membership that applies to private lessons. In this instance, members would receive X number of credits to apply toward lessons each month.

There are a few popular options to set up your sports business memberships. We’ve outlined the pros and cons of each here.

event level profit loss download template


5. Do you want to form long-term relationships with your clients?

There are a number of benefits to building long-term relationships with your clients. From a business standpoint, membership-based business models reduce churn and inconsistent, one-off purchases. Additionally, establishing client relationships also has benefits from an athlete development standpoint. Building relationships with your clients helps you better identify their strengths and weaknesses, as well as understand how they respond to feedback.

Memberships help you see your clients more consistently by encouraging them to utilize their benefits. As a result, they become more committed to your business, leading to higher client retention.


What’s next?

Ready to take action and incorporate memberships into your business model? Schedule a demo today. Already a part of the Upper Hand team? Reach out to your account manager to discuss how you can include memberships in your plan!


Should you utilize a membership-based business model? Use this decision tree to find out.



See why studios, gyms, and academies trust Upper Hand to grow their business. Schedule a demo today.
Courtney Kerr
Courtney Kerr
Courtney serves as Marketing Manager at Upper Hand.

Subscribe via Email

We’re committed to your privacy. Upper Hand uses the information you provide to us to contact you about our relevant content, products, and services. You may unsubscribe from these communications at any time.

Don't forget to share this post!

Related Articles