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Episode 334

334. Leaving Classpass with Sari Sadhati

Many studio owners have a love/hate relationship with Classpass - Sari and I have an honest conversation about the pros and cons, and why (and how) her studios are leaving Classpass.

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Transcript

WEBVTT

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Welcome to Pilates Elephants. I'm here with, now I'm going to need some help

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with your pronunciation of your name because I'm going to butcher it. I'm sorry.

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Sari Sadati. How did I do?

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Yes. Nice. Sari Sadati. Perfect, Rob.

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And Sari is actually short for, I'm not going to try and say it,

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but it's short for a longer version of your name, correct?

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Yes, it is. You want to try? Want to try to say it out loud?

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Sikarsari. Almost. You have to roll the R a little bit. All right.

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So, Sarri, you're in Bali, Indonesia, and you're a studio owner there.

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And so, yeah, would you just briefly introduce yourself and tell us – we're

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here to talk about your studio in general.

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I actually have a bunch of stuff I want to ask about your studios,

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should I say, because you have multiple of them.

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But particularly ClassPass and why you've decided to leave ClassPass. pass as a studio owner.

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And so, yeah, just give us a quick background on who you are and why we're here.

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So yeah, my name is Sari. And as you mentioned before, I'm from Bali, Indonesia.

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So I started actually becoming a class teacher in 2015 with you,

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Raph, back when you had that 7C red show going on.

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I remember that so clearly. And last year for diploma.

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But then on 2018, I started my first studio in Bali, Saya Pilates.

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And now we're bridging out to four different locations. So we have different locations across Bali.

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And yeah, so I started doing class pass on my second studio in Canggu, Bali.

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So if you're not very familiar with Bali, Changu is like this tourist area where

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we, you know, most of our clientele are from different countries,

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from tourists to expats.

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So, yeah, most of, you know, not in the clientele.

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And did you study with us at Northcote or were you back at Breathe Wellbeing in the city?

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Yes, I was in Melbourne, 2015. How long ago was that? That's a long time ago. Ten years.

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All right. A long time ago. All right.

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And so Canggu, is that the Canggu studio in particular that was kind of the

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catalyst for you deciding to leave ClassPass?

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So firstly, tell me, like, ultimately, firstly, why did you start ClassPass?

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Cause I remember like round about then, maybe, maybe like 2010 or 11,

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we were on, I'm not sure if ClassPass was even a thing, but there was like,

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there was a few different companies doing very similar thing.

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I can't remember the names of them, but there were a few different ones that

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we actually used in our studio in Melbourne CBD,

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but we stopped using it because they basically filled up our class with low-paying

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clients that we didn't want to sell.

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Yeah, I actually relate.

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Yeah. So, yes. It's just different times. It seems like the market has evolved

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and I didn't really keep a big eye on it for a long time.

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Like after we started, I don't think it was ClassPass in particular that we

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used. There was a different brand, I think.

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But they kind of all fought it out amongst themselves. It seems like ClassPass

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won and then I think they're the only big brand that I know of in the market that do what they do.

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And I think they got bought out by MindBody Online, the booking software. Yeah. That's right.

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So tell me, ultimately, when did you start using ClassPass? What year, roughly? Yeah.

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Um what yeah it was um 2000 when

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was COVID 2019 2020 yeah around

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that time so um I survived without class pass for about a year and then because

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back in back back then in Canggu there were only like three studios right it's

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like three of us so uh Pilates wasn't really a big thing back then.

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But then, you know, larger studios starting to come in and this one.

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Large studio which i won't you know i won't tell

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you the name or sound um they started they started

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doing class pass right but i guess it

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works for them because they could have so many

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people in the class per hour so i guess

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that's why they you know consider class pass

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to be one of their booking system so yeah

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so we survived without class pass for a year and then

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my partner starts to um you know get quite

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worried because one by one studio started to

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take on class pass and we started to

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notice that clients um our direct clients starting

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to ask us about why aren't you

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on class pass i'm like oh my god here we go here comes

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the class pass you know the class pass pandemic i would

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say um and so we have

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we have really no choice but

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not to you know other than to join ClassPass because our

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choice are either we're not using ClassPass but we're

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not seen or that we're using ClassPass but

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we can make that into a marketing tool yeah so

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like at least get the people to come in and kind

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of convince them that we're good enough for them

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to buy directly from us but unfortunately that

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wasn't the case so back then ClassPass

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was actually quite okay so uh we

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got a pretty good cut from class bus and

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we we had the um the say.

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To not say yes to a free passes right so they would ask us would you be open.

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Having uh free trials on your studios and clearly we're not no no way we would

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you know take on free pass um but then i think like.

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I think a year ago, they started to change their terms and conditions,

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and I had to sign this new agreement that's stating that I have to take on.

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Free pass right so it's either you sign

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or you're out so yeah the choice

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wasn't really you know benefiting for for us

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either way but um fast forward i think we're on class bus about two years for

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changu and then we had to close the studio because of it so class bus this was

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actually our main one of the main reasons why we had to close changu and i think

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i i told you this I just remember during the mentorship,

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like, wow, I'm really struggling for Changbu.

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It was a very small studio. It was only like six reformers.

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And we couldn't have six class bus users in one hour because we literally...

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Got nothing like literally nothing and it's even

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like we have to pay for the other costs especially for the

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teachers because i didn't reduce my teacher's fee

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maybe i should no maybe i no i shouldn't

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right because it's not fair for them right so um at

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the end the cost is really high and yeah

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and we got nothing so and then also the rent in changu

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goes a little bit higher so it just doesn't add up so

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that's why we closed changu um i to

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two years ago so yeah so and then we moved to a bigger

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place um and hoping that with

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class bus we could survive more yeah right but turns out yeah it's just getting

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worse and worse and yeah and at the end last month we were like this is it i

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mean it's getting out of hand and i think the momentum is really good because

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this smaller studio starting to, you know.

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Like saying the truth about class bus and bringing the facts out there.

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So I think the momentum is good for us to step back and really reduce class

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bus hours by half now, more than half.

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Okay, yeah. So that kind of makes a lot of sense with what I've seen kind of

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as an outsider now, you know, for the last few years.

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That, you know, I think ClassPass,

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their business model is such that they attract people who are real bargain shoppers

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because they're kind of the ClassPass is a cheap monthly thing where you get

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to sort of hop between different studios and they...

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And the class pass takes like a substantial, I mean, I don't know if they take

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a cut because it's really hard to work out their actual pricing because they

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have this kind of credit system where they don't disclose the price of the class to their members.

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You know, when you're a class pass member, you get a certain number of credits per month.

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And then, you know, the class, when they come to your studio,

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it might be a certain number of credits to the class or, you know,

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depending on which time of day it is and whatever that number of changes.

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And so it's really hard for the member to figure out how many dollars or repair

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or whatever they spent on that class.

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But for sure, you as a studio owner get something like 40 or 50%,

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you know, or even less sometimes I think of what you would be able to charge

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a full price member for that spot.

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And if you've got a relatively small studio with six reformers,

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which I count that as a small studio,

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well, if you've got half of those places taken up by people paying half price,

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it's like it's basically impossible to make a living.

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Exactly yeah and the rent especially um

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and actually let me just put it out there i

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think like personally as a business owner i think

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whoever invent plus bus this lady

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she is fucking brilliant you know like she she

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could have so many little margins all studios

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across the globe rough like who would have thought of

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that i mean it's brilliant and the way

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they use credits um they kind of disclose

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the price to us the studios and

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also to the members so they could you know the members

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couldn't say to their friends well i paid

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this much how much did you pay because your credit

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is very blurred you know you never know like what's one credit is

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equal to what rupiah or like what dollars but that's

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just amazing and how they use algorithm they were

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saying you know it changes every 10 minutes and

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yeah 10 minutes i think so every time we had complains

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it's the algorithm it's the algorithm you know

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they never had the specific

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reason why such thing happened but

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it's the algorithm and yeah so i

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guess i guess they're really they're really yeah and so like you know i know

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that i've listened to class pass people talk uh and i've read their website

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in preparation for this conversation and you know they do say that Like ClassPass

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is not designed to be like a marketing tool to fill your studio.

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It's designed to be like the cherry on top to get incremental extra revenue

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for classes that you can't fill.

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And that idea does make a lot of sense to me. And that's why we originally got

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on board. Again, I can't remember if it was ClassPass or whatever brand it was.

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You know, like if you've got a class at, you know, 8 p.m.

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That you're finding it really difficult to fill and you can pick up a couple

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of extra people for that class at half price, well, it's better than having no one.

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You know, it's better to have that income than to not have it.

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And so that does make a lot of sense. And back when we were members,

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you could specify like how many places in each class you wanted to make available for ClassPass.

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Class and you could in some classes you could

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say hey we're not going to let class pass people book into this class

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or we're going to make two places available or four places available for

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class pass or whatever it might be um and but

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my understanding is now it's kind of basically it's the algorithm

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kind of does all that for you like you can't really manually drive

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it is that is that correct yeah so

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the first time class bus people um

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came to us exactly what you

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said they were saying that we're going to help studios like like yours fill

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up empty spots and they kept you know kept saying that you know class bus users

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and direct buyers are different clientele so they were saying direct buyers won't ever.

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Switch to class bus they because they're loyal to

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you like why would they right um so i

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guess when they told me that it seems

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like they they were going to help me feeling those

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spots first it sounds great because well yeah

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i mean that makes sense because as you

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said rather than have zero dollars i could have like five

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dollars like the loads um but

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then yeah and then the algorithm keep changing and then

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as we progress i noticed that um

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somehow our rate becomes low lower and

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lower our credits becomes like lower than before and

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every time we ask them you know what's going on why

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are rates going so low now and yeah and

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they kept saying that it's the algorithm and one

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point they were saying maybe it's because your class

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is um slow you know like

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it's very slow and it's as if they're saying like

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my studio does not really sells but then

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if you're talking about that way like we could fill with

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class pass like lots of spots and half

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of it from direct buyers so if you're saying like my studio is um quiet well

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not really you know i mean it's just the algorithm gets so quick that we don't

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have the chance to pick up our own direct client sales because then ClassPass

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would put them beforehand. Does that make sense?

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And the way they made this… Sorry, just to jump in there just to make sure I do understand.

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Yeah. That, you know, the idea of ClassPass, which I think is a great idea,

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like you said, is that you have your members and they pay full price and then

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if you have some part of your classes that are not full,

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well, then you can top that up with ClassPass people paying less than full price.

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And so that all sounds good. Like you get your members and then you get a little bit of extra on top.

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But what seems to have been the reality for you, and I think this is the,

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I've got a few clients that were

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on ClassPass and have transitioned off ClassPass for this exact reason,

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that what happens is those ClassPass people actually book in and displace members from your class.

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Now, the members can't book in because it's full of people paying 40% of the price. Yeah.

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Correct. That's right. because now

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the tricky thing is because it is connected to mind body

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so we were using mind body now we're not but still connected

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um so class bus could see like

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whoever's in basically whoever's in uh you know filling up the spots right like

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how many spots are filled in and not filled in yet so this algorithm that keep

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changing every 10 minutes will read into that and they will keep looking for

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people to come in with ClassPass, right?

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And the tricky part thing is there is no count.

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So there is this button that will say minimum of ClassPass users,

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something like that, which I thought at first it was supposed to be maximum.

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So we put on three. It says like three maximum of ClassPass users.

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But it turns out it's minimum, right? So, which is why we were thinking like,

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why there were like five ClassPass users in the class while we put in the button like three?

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Turns out it's minimum, not maximum.

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So, that was our fault. But that was just tricky for ClassPass for doing that

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because then we don't have the chance to find our direct clients because that was just so quick.

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I don't know if it's misleading or what, but it seems like the opposite of what

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you'd want is you'd want to limit the maximum, not the minimum.

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That's it. That's it, yes.

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So there's no, yeah, there's no solution there. Also, because they...

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So they turn on and off class pass from the class, the title of the class.

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So say I have five classes, yeah?

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So I have A, B, C, D, E classes.

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So if A class is on on class pass, that means all classes, which is A class, will be on class pass.

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Does that make sense? And I would turn off B class, right?

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So then I would have A class on class pass, B class not on class pass.

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And A and B might be like level one and level two or beginners and open level

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or something like that. Yeah, exactly. Yeah.

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So the tricky part is we have to kind of like set our schedules so that the

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classes that are not on class paths is the one that we're targeting for direct bias.

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But it's complicated because then we have to create, like you said,

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like level one, it has to be like on specific hours.

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And level two has to be on specific hours because it's based on the name of the class, not the hour.

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Does that make sense? That's why it's very true. You end up having these essentially two markets.

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One market is your internal members and they're paying full price and they have

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one set of privileges and then there's the class pass people who are paying

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half price or less and they have a different set of privileges and they're in

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kind of competition with each other because the class pass people,

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you know you want to get them in second to fill in whatever's not you know whatever's

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left over but in a lot of the times they end up getting in first and then they're

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competing with your with your internal members.

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Exactly. So what we did was actually, Ralph, we changed, we made a new class.

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We called it the classics.

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So the classics were the only class that was on ClassPass.

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This was a year ago. right the classics were

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taught by one of my instructors my most popular uh

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instructor back then um so we

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could get all of the direct buyers to you know come into those uh to the classics

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right it's available every day but then my schedule will be so weird because

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it looks like 7 a.m to 10 a.m classics classics classics classics classics because

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the other classes are on ClassPass.

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So it's just a weird schedule, right? But our main goal is to have classes that's not on ClassPass.

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And then we realize if we have, for example, the Classics, right?

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We would like to have five classes of the Classics with ClassPass and five classes

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of the Classics without ClassPass.

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If we change one of the letters to small letters, for example, it's a different class.

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So, we kind of hacked that, right? So, we decided to have, like,

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more normal-looking schedules, but with different capitals of letters,

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which is, like, so dumb. But it helps.

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Like, we hacked the schedule right there. So, I feel like, yeah, such win.

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But then, but yeah, but we were still struggling. So, yeah, this is before we

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deduct class perspectives. Yeah.

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And I think another part of the problem, like you said, is that,

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you know, when a lot of studios go on ClassPass, like I understand,

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you know, I understand the technology.

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I think that the positioning of class pass that, well, it's incremental income

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in theory, it's adding to your existing income.

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And so you'd better to have $5 than no dollars, right? For that, for that spot.

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But the thing is that you end up selling half of your spots at $5 when you could

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have sold them at full price.

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And then, you know, we end up training this whole cohort of people that our

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boutique studio, you can get in for $5, you know, and so there's,

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you know, I mean, like you say, the ClassPass, they use credits specifically,

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so the ClassPass members don't know exactly how much they pay,

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but they can kind of figure it out.

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Okay, well, I paid $100 for my membership this month.

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I got a hundred credits, therefore a credit is about a dollar.

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Now, I don't know, that's not how it exactly works.

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Like you might pay $179 and get 21 credits or something, but you can do the

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math and you can figure out how much it cost me per credit.

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And then you can say, okay, well, when I did my class at Saris Studio,

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it cost me eight credits.

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So therefore I can figure out how much that cost me, right? It's not impossible to figure it out.

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And so then they can talk with your regular members because when they're in

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your class every Tuesday, it's like, okay, they're paying you half price,

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but they're basically in all other ways, they're behaving like a member.

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Like they show up at the class, they love your studio, they do the stretches,

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they smile, they sweat, they, you know, they laugh, they cry,

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they, you know, all of those things.

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So they get to know your regular, your, your internal members.

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And they probably talk in, in the change rooms and say like,

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oh, well, you know, I'm on ClassPass and I only paid, you know,

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$5 for this class or whatever.

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Oh, well, I'm, I'm a member of Surrey Studio and I paid $25,

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you know, like, how do I get on ClassPass? You know?

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And so did you find Did you find that you lost any members to ClassPass?

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Was that a substantial thing for you?

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It was because, yeah, ClassPass were saying as if clients don't talk.

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Like, as you said, they talk. And then especially there's this thing called

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the referrals where if I'm a user of ClassPass and then I refer ClassPass to

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you, Rav, I would get like a more discount.

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So the ClassPass users are actually incentivized to actually essentially like

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solicit your members onto ClassPass. Yeah.

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Yes because i started um receiving

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these referrals from my friends um they

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they they don't have any idea what happened to

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studios with class boss they were just users right so i started getting these

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referrals from my friends uh you know try class boss for you know like other

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studios across bali i'm like what are you doing like i don't want to get into

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this and then so that's when i realized I was like, this thing's like, yeah,

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it's like a pandemic, you know, because people are starting to refer to their friends.

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And then what started with Changu, now in Denpasar, so the other location of

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Bali, which my other studio is. And Denpasar is the major city in Bali, right?

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Yes so in denpasar we target most locals

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like 90 i would say 98 percent

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locals um so locals before didn't

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know about class bus right it's only tourists and expats but

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because of these referrals they started to know class bus

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and they started to ask uh my other

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studios which look within denpasar why aren't

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saya renon or saya got to

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have class bus and then so

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they figure it out um and of

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course in changu and umalas which targets the um

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tourists and expats of course my direct clients

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one by one started to shift to class pass

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i mean if i were them like why not it's so much cheaper and it's exactly the

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same class exactly the same quality because we couldn't you know we asked instructors

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we can't say okay you're from class pass you will be having like 30 minutes

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class while the others have like 55 minutes.

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You know what I mean? We can't really differentiate that.

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And it's going to look back on us as well on ClassPass apps and that's not a good thing as well.

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Sia Pilates get like five stars which is good but then if we started to you

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know change some things from for ClassPass users our reviews will go down and

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I don't know it's just like there's no win-win there.

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But what I love about… So I was going to say, you become dependent on that income

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from ClassPass because you're filling up these places with half price clients or less.

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And so then your income from members goes down, but now you've got income from

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ClassPass that you now rely on that income because your membership income is not as good as it was.

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And so now you want to get rid of ClassPass so you can raise your membership

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up, but you can't get rid of. class bus because now you're reliant on the income to pay the rent.

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So it's kind of a vicious. Yes. Yeah.

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It is a vicious cycle that's what i said vicious cycle um

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but most of my clients are above

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let's say like 45 years old and

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these client sales which i love they don't have like the urge or the interest

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to go on apps and like figure what class bus what is that because they're just

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not into text right so these clients uh usually they i would just buy it from

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you because it's easier You have the admins,

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and the admins can help me whenever I feel lost on the apps,

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direct booking apps.

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So in that area, I think we're good.

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But it's the younger generation that it's a bit tricky because they're very

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tech savvy, and they know what's new, what's going on, and it's very hard for

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us to convert them to direct buyers.

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While we offer discounts so at

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the moment um my classes are

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you know the price has gone very low from what it was

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because we kind of have to like adjust our pricing based on you know what's

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what class bus is offering so now we're offering you know cheaper way cheaper

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rate like 500 000 that's like $50 AUD for three classes,

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which is very cheap for direct buyers,

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you know, just to make them, you know.

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If you book directly from us with this cheaper rate, you get more from us.

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Like, for example, you get dispensation when you're sick or when the weather's really bad.

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Or if you feel like you need some assistance, you can direct,

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you know, like WhatsApp us directly and our admin will help you out.

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Because with ClassBoss, because pretty much they're AI, right?

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They're like robots. so if you're sick or

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if you can't attend the class you cannot

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talk to anyone they just like cancel cancel it

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out but with direct buyers we studio

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we could you know like ask them oh what's going on

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is there anything that we can help you uh what makes you

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feel better and such so that's how we kind

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of convert the class pass users to

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direct buyers um and also

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i think we had a huge shift there because some clients do convert to direct

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buyers because one of the things that I told you about and also due to instructors

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so if my instructor is really really good and they have followers,

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automatically I will take the classes off from ClassPass because then these

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clients will follow their favorite instructors,

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so yeah they will pay directly.

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No second class. Yeah, so that's interesting.

::

So I want to talk about your strategy there about transitioning off ClassPass.

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So my understanding is ClassPass, they have a seven-day booking window,

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so the ClassPass members can book up to seven days in advance.

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Is that right? Do you know? Yeah.

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Yes, but then we limit that. So now it's only, if I didn't get this wrong,

::

three hours before the class.

::

So that's when ClassPass could, you know, really look for clients.

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But sometimes it's just off and we end up having lots of clients from class anyway.

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So you can set that manually if you want at your end.

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Yeah but it's tricky at the end we have to keep talking

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to the rep from indonesian rep from class pass

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and it takes days and sometimes they don't respond because so

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you can't you don't do it manually you have

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to ask them to do it and they they implement it right yeah so so you you know

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so things that um other studios i've helped sort of get off class pass because

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it is kind of like getting off a drug i think in some ways that you become addicted

::

to that income and you have to wean yourself off it so you don't get withdrawal symptoms,

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you know, like lose your profitability, is to create like more privileges,

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like you say, for members.

::

So make special classes that only members with the most, you know,

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classes with the most popular instructors are only available for direct buyers,

::

that maybe direct buyers can book further in advance, like maybe let them book

::

a month, two months, three months in advance if they're direct buyers,

::

whereas ClassPass people can only book,

::

you know, like you say, three hours in advance.

::

Um, uh, so do you, are those, are those the main strategies that you've used

::

to, to wean off ClassPass or is there anything else? Yeah.

::

Yeah, so the most efficient is the instructors.

::

So we look at which classes are the most popular based on the instructors usually.

::

And we took those classes off for that instructor's classes.

::

So that's why I said before the schedule is weird. Yeah, with big says and little says.

::

Yeah, it's just like a weird schedule. And then so that really helps.

::

And the second one, we realized that most people had gone off to morning classes.

::

So after we ditched all this particular instructor's class off PlusBuzz,

::

and then we started to move on to all morning classes.

::

But with that, we offer a very cheaper rate, as I said before.

::

So clients could get like 500,000 rupiah, which is like 50 AUD for three classes.

::

So much cheaper because we used to be like 200,000, so like 20 to like $25.

::

And if they bring a friend with them, they could get more cheap,

::

like cheaper rate, like way cheaper rate.

::

So I'm kind of copying ClassPass, but do it for my own studio.

::

And also we did this very kind of savage thing so now.

::

Class bus users they don't get wet towels

::

like you know like cold towels that's very like it's very

::

something today they don't get cold

::

towels but only direct buyers do get

::

cold towels and then this actually don't

::

really it doesn't seem very good on

::

hospitality but then the class

::

bus user starts to you know ask our admin why

::

don't i get cold towels like why do they

::

get cold towels and then my admin would you know very

::

nicely very very nicely would say

::

um well because um it's our

::

gratitude for them for buying from

::

us directly so we never say it's because you're

::

from class bus but we kind of turn it around and

::

say because we are very grateful for them for

::

buying from us directly you don't see how the psychology

::

i think the the choice of words

::

or it really matters and then so the

::

class bus uses they never complain about the wet

::

towels or you know yeah they kind of like they now kind of get it okay because

::

those people pay more than they are so um it strikes me that we can maybe learn

::

something from the airlines here that they have you know they sell they have

::

seats on the plane they sell at different prices.

::

You know, on the same plane. And the way that they make, they sell higher priced

::

is, you know, obviously there's a situation with more leg room or whatever,

::

but they also have this very big emphasis on status.

::

And they literally call it status. Like I have gold status with,

::

you know, with Virgin or Qantas or whatever.

::

And you get, you know, a little gold thing to put on your luggage and your luggage

::

comes out from the carousel first and you can skip to the head of the line when

::

you're checking in and you can, you know,

::

board the flight first through a special, you know,

::

a queue that is, you know, shorter and is fast, you know.

::

So, and you get a little gold, like your boarding pass has this gold thing on

::

it and, you know, so there's a lot of status there that is, you know,

::

it's like, of course, boarding on the plane first. It's like,

::

well, everybody arrives at the same time because you're on the same plane, you know.

::

But there's just – so boarding first doesn't actually confer any real benefit.

::

It's just the status of going to the front of the line, like at the nightclub

::

if you go to the front of the line.

::

And so I think you're onto something with the white towels there.

::

And I think if you could really –.

::

You know, mine that idea of status,

::

like just, you know, like even, it didn't go beyond gratitude and just say it's

::

like, oh, well, our silver and gold members, you know, get the hot,

::

the cold towels and they also get the little key fob and they also, you know, whatever,

::

they get to enter their class first and choose their favorite reformer, you know.

::

So ladies and gentlemen, the 7 p.m. class is about to start.

::

I'd like to welcome all of our gold and silver members to, you know,

::

select their reformers first.

::

Okay. If you're in bronze or class pass, you know, please just wait a moment. And so I think.

::

See, that's funny.

::

That's, that's, but that's literally what the airlines do.

::

I mean, you fly, so you know that if you're in the cattle class,

::

the economy class or whatever, you wait until everybody else has boarded the aircraft.

::

And if you're in gold or silver or platinum or whatever, you get to get on first, you know?

::

Yeah, exactly. And I think it's the small things here.

::

It's just the thing that we cannot change is the quality of the teaching.

::

Same as pilots, you know? You know, the fellas can't just say,

::

okay, follow me, we drop it here.

::

And then this is close, we drop it here. Here's your parachute. They just can't do that.

::

Yeah, here's your parachute. Bye. You can't really say that.

::

So, yeah, so it's absolutely the same thing. Exactly the same thing. Perfect.

::

So it's like, so we can't really negotiate on the way we reach, right?

::

What we can do is those small things that, you know, it actually matters.

::

Yeah, you're right. I think the status thing is a real thing where like

::

I can imagine where like I'm

::

trying to translate it into my mind of like if I was in some

::

kind of like if I was visiting a hotel

::

like because I travel a bit I'd stay in a hotel like

::

if I could go and stay at like a really nice hotel like

::

the Western or the Hilton or whatever for half the price

::

by doing it through hotel pass or

::

whatever it's like sure i'll do that but then when i arrive at the hotel and

::

i realize i have to wait in the slow line to check in and then i don't get upgraded

::

to the king size suite i get the like the crappy room you know down the end

::

of the hall or whatever and you know i feel like ah yeah okay,

::

this this seemed really cool but it's not the full experience that i wanted

::

like i don't feel like i'm an honored guest as much even though they're very

::

polite and every i don't have all of those kind of extra kind of status markers

::

there that as kind of part of the experience.

::

So I think there's something in that. I think you could, I think that the white

::

towels are a really good thing, but I think if you just emphasize that it's,

::

it's a status thing, not a gratitude thing necessarily.

::

I mean, gratitude's great, but I think status is more important.

::

Yeah, I think you're right. Yeah. I'll look into it.

::

I think you should even, honestly, I think you should experiment with letting

::

people into the studio, like into the literal reformist room first based on their membership.

::

Like, okay, I'd like to welcome our gold members and just call the internal

::

membership gold membership, right? It's just the same price here. We just call it gold.

::

I'd like to welcome our gold members into the studio. They'll just show you,

::

show me your key fobs, you know,

::

as you come in and they show their little membership card or whatever,

::

and they get to choose their favorite reformer because everybody knows that

::

the clients have their favorite reformer that they like to be on.

::

Yeah. And so if you get to elbow your way into the studio first,

::

you know, and choose your personal favorite reformer, well, that's a real status thing.

::

Yeah. Yeah. That could be really cool.

::

Should we ask the direct buyers not to clean their reformers? I will do it for you.

::

And the glasses. Too much, yeah? I don't necessarily think so. I mean….

::

Yeah, I think it's worth – It's like just an extra thing. Yeah,

::

yeah. I think it's worth experimenting with that kind of stuff.

::

Yeah. Combined with an email and text campaign to the ClassPass users to invite them to upgrade,

::

you know, to show them that you do value having them as customers and you'd

::

really appreciate and welcome them to upgrade to gold status,

::

you know um and what are the privileges of gold status so you get first access

::

to the class you can book six months in advance you get the white towels we'll

::

clean the reformer for you you know,

::

um yeah uh you you know like you get whatever you know extra two late cancels a month for free,

::

um you know i think those kinds of benefits are really um might be very attractive to people.

::

Yeah and also parking i think that's one of the most,

::

do you have parking on your premises parking yes

::

but always the problem we have not we

::

don't have enough space sometimes so we could

::

say like park only for only for members

::

only for gold members you get you get a park you

::

get you know access to the parking it when you remember yes

::

seriously i i highly recommend you implement

::

some or all of those things uh and

::

i i i think uh you know give a

::

couple of weeks notice and say your members are going to love you for it they'll

::

appreciate it you know yeah yeah it's a really good idea um yeah the parking

::

thing especially i think that

::

is something people will value very high yeah i think Because in Bali,

::

sometimes we have to pay for the parking to just a local guy.

::

So we could just say, like, if you're direct by from us, we'll cover your apartment.

::

Parking space yeah and so like

::

again i'm thinking i'm putting trying to put myself in in

::

those shoes of those people like if i'm a if i go to a

::

local restaurant and i'm with my wife and we pay full price and then i see some

::

kind of coupon where i can go for half price to the same restaurant like let's

::

do it right but then i get there and like some do you ever go like in fact they

::

they literally do this at the restaurant right so they have in australia like

::

you know specials during the works,

::

I might have like Palmer and Pot Tuesdays or Steak Thursdays or whatever,

::

where it's like you can get a steak for half price on Thursdays, right?

::

And you go, huh, well, normally the steak's $50. I'll get a steak for $25. That's amazing.

::

You know, I'm going to come on Thursday and get my cheap steak.

::

Then you come on Thursday and you realize it's an inferior cut.

::

It's half the size, right?

::

You don't get it. Different expectation. There's no side vegetables or salad included, you know.

::

And so it's like huh well it kind of sounded like

::

a really good bargain and if you were like a super poor

::

like university student who's like you just didn't have the

::

money like that would be a good plan but if you can actually afford to get the

::

proper one like i'd rather just pay full price and get the proper experience

::

you know exactly so yeah and but like yeah i mean but the the thing with the bad quality cut,

::

it kind of gives you the taste of the real one,

::

right? Like, oh, this is pretty good.

::

And as you said, I want the real thing, the better thing.

::

So yeah, that's how we can do it. Yeah, so I think all of those things,

::

like you say, you can't give people a different class experience inside the actual class.

::

Although you can say, well, if you want

::

to do classes with this particular instructor, I'll see you next time.

::

Gold members only, you know. But then I think those other things like the towels,

::

the parking, first access to walk into the studio, booking for a much longer booking window,

::

couple of extra free late cancels every month, you know, no charge,

::

you know, freezing your membership, those kinds of things, I think will be highly

::

desirable to people, both because of the status and I don't think we should

::

underestimate status. I think it's very important for people.

::

And also the convenience and the flexibility of like, oh, I've got a much better

::

chance of finding a parking spot if I'm a member because it's members only parking.

::

Yeah. Yeah, that's actually a really good idea. I'll do that.

::

And also I want to just share with you what else I did. This one's quite savage.

::

I realize if we're the only studio who leave Class Pass and then so then the

::

users will go to other studios who still.

::

Offer class bus right but i know

::

for a fact that all studios feel the

::

same thing as i as i did so me and

::

my fellow instructor we actually

::

gather everyone together all the owners of

::

uh you know studios uh pilata studios

::

across changu and umalas those regions

::

we actually did sit together and

::

we kind of you know let's do this together

::

because if if it's only one of us who do it it doesn't really affect anything

::

because people would still you know go to other places um and so all of us owners

::

we decided to you know slowly leave class bus and made a post together,

::

why we leave class bus with all of our

::

logos so i think this becomes a community

::

thing you know like it's it's making our

::

community stronger than class pass and it actually

::

it makes us owners kind of

::

like even though that we're competitors but we

::

understand and we you know we feel the same thing and we um kind of struggle

::

the same fight so why don't we all gather together and let's fight this together

::

so it actually really you know it kind of brings me more hope you know,

::

that we can actually come with this, you would say.

::

So yeah, that's also another way. So now you're 50% off ClassPass, correct?

::

In Bimbasat? Our morning classes are not. No, in Changu only.

::

So none of my other studios. Ah, okay, great.

::

Okay, and so like you had four studios and then you closed Changu.

::

But then you opened another one. Sorry, Umala. Thank you.

::

So the one that's using ClassPass is only Umalas. So one out of four studios.

::

ClassPass did ask me whether I wanted to have ClassPass for the other three.

::

You know, the ones in Denpasar. But I actually called the owners of these studios because I know them.

::

So I called them, hey, you know, did ClassPass call you?

::

And they ask you, yeah, you know what? I think it's best if you don't use it.

::

And then they said the same thing. So we kind of have like unreaded agreements

::

across the Bazaar of not using ClassBoss.

::

So, yeah, good thing. Again, the community really matters. Okay.

::

Because if it's strong, then they won't get into us. So I think that's a good

::

segue into just more generally talking about your business.

::

So you have from memory and also from what you just said, you have different

::

partners in each studio, true?

::

Yeah. So you've got four, you're kind of part owner of four studios and each

::

of those studios has a different person who is on the ground in that studio.

::

Is that right? How does that, can you walk us through how it works?

::

Yeah, so I have four studios. Me and my partner, this one partner, her name is Indira.

::

So we own all four, but we also have different partners for each of the studios.

::

Um so basically it's me and indira owning say aquaris as a whole and other partners

::

yes and what is like so and they're all group reformer right.

::

Yes so except for our flagship which is in denpasar and renon we also have a

::

room for private um private gym, also reformers, yes.

::

So we have multiple classes going on at the same time.

::

And so what is your approximate monthly revenue at the moment across all four?

::

Oh of course all four like one studio is different from the flagship it's about,

::

300 million i don't know aod it sounds so much what you say in repair,

::

yeah i'm so rich like 30 000 i think yeah 30 000 um and the smaller one Yeah, 30,000 was it?

::

Is that 300 million? I don't know. You know rupiah. I'm going to check on Google.

::

Yeah, check on Google. I think it's 30. We keep having this issue with rupiah, you know, so many zeros.

::

But the other ones are just slightly under, yeah.

::

So, yeah, it's about 27,500 Australian dollars according to Google. So let's call it 30.

::

It's close enough. which is uh probably like

::

18 000 usd um roughly

::

kind of sort of maybe um all right

::

and so let's call it like 30k a month and then maybe like a little bit less

::

for the other ones did you say yeah yes yes i'm sorry way less for umalas because

::

of class pass and so what is so what It is the differential there.

::

So, all my last, like, have you got another studio that's roughly the same size

::

that's not on ClassPass that you can compare?

::

No, actually, I have a number with before and after ClassPass.

::

So just this September, we were on 53 million per month.

::

So that's very, very low.

::

That's just, I think, 5,000 AUD. Yeah. So really bad, right?

::

We didn't get any owner diffident or any profits whatsoever.

::

It's just for us to cover the costs, especially for instructors and rent.

::

And then October, we decided to take all morning classes off ClassPass.

::

And then it ended up being like 100 million.

::

So you doubled. 10,000.

::

Doubled, yeah, doubled. We doubled, actually.

::

Um but i wouldn't say

::

it's because it's only because we're off

::

plus plus there are other factors of course

::

um but i would say like the

::

most one of the most impactful um you

::

know it's because we're off plus and we were able to

::

sell you know the short-term memberships because

::

we used to have like 10 packs eight packs four

::

packs now we can't really do that because people likes to

::

you know like hop into studios because of class

::

pass they they're used to it now so we are

::

offering like shorter terms only like three sessions

::

two sessions so much cheaper and if they bring in you know their friends they

::

got cheaper rates than the cheap so yeah i guess it really helps with the revenue

::

and what is your ultimate goal like with the business do you want to open more

::

studios or where do you want to take this.

::

Funny enough, so I remember I was talking to you, Raf, during mentorship,

::

and I said to you, I remember this clearly, I said to you, I wanted to have

::

as much studio, Saya Pilates studio, as much as possible across Bali,

::

and later on in Jakarta, and, you know, across Indonesia.

::

Show and then you told me like would you rather have lots

::

of studios but an average quality or even like

::

bad quality because it's too much or a few that have you know better quality

::

and so actually thought of it really deeply and now um in my current position

::

i would like to just have face force studios um and just make sure that the

::

quality is top notch that because you know.

::

Bigger but cheaper studios start to pop up

::

in denpasar so we really want to make sure

::

that our quality you know amongst the best

::

um and i actually wanted

::

to start a mentorship program for group teaching in bali so i hope that works

::

um yeah because as you know a studio pilates these days are a lot like you know

::

it's just like selling peanuts we call it in indonesia it's a It's very cheap

::

and very easy to open studios.

::

I think we need to have a shift on our business strategy and kind of pivot to have a bigger impact.

::

So you want to focus now on quality and profitability per studio.

::

And I kind of have a simple life with only four studios. Yes. Yeah.

::

That's it. Simple life. Simpler life.

::

So aside from the obvious one of ClassPass, which we've already talked about,

::

you know, what is the biggest challenge there?

::

It sounds like, you know, there's lots of competition coming into the marketplace.

::

That's a big thing for you. uh and so what you know what do you when you say

::

like quality you know like what do you mean by that.

::

Um i think what i do in saya pilates i'm very big on mentoring um so usually

::

if when i take on new instructor they have to gone through like several hours

::

or even like this takes like weeks and then turns into months of mentoring with me personally.

::

So I would ask clients about, you know, the reviews of them teaching,

::

maybe like take a peek from CCTV or whatever, you know, that I could get review

::

insights about the way they teach.

::

And then so I would, you know, have a conversation

::

with each and one of them and then kind of like

::

review their performance and

::

basically you know if there's anything that

::

needs to be um elevated then i would

::

help them to do that so i don't think

::

all studios do this especially those studio who you know employ cheap rates

::

instructors and then the owners is not a palace instructor so they don't really

::

know how the business like what's quality you know i mean like what's a good class and what's not a.

::

It does not feel good for the client, so they don't get the details of it.

::

So I make sure that all my instructors perform really well each class and also

::

ask the clients directly, like one by one.

::

Hey, have you done Pilates before? How are you feeling today?

::

Any injuries? Sort of like that. So we make it feel personal.

::

So my goal is to make group class feel personal.

::

And the maximum the bigger

::

class we uh the biggest class we have is only nine informers

::

i think um you know those strategies pretty much um possible yeah for us to

::

come into clients and how's your marketing and sorry how's your marketing like

::

getting you know getting do you

::

have a process for getting new clients and turning them into members Yes.

::

Yeah for marketing uh i think

::

one of my benefits is that say a

::

lot has been around for a pretty long time so we've

::

been around for eight years now um first and

::

foremost our marketing is like we're one of the the

::

first here like we're the uh what do you call it like the

::

older studio you know we have better quality uh

::

so you search you search rankings high you

::

you show up the pioneers the one of the pioneers

::

in bali so i think by just saying we're

::

one of the pioneers we get trust from the clients and then um and you were saying

::

about the status before so somehow our clients feel if they're going to saya

::

pilates their status is higher than kind of the cheaper studios because.

::

Um yeah i mean our rate is probably higher

::

still and then do the quality that

::

we're offering and also those simple little details that

::

we give out to clients they kind of get it

::

that we do extras you know compared to

::

the cheaper studios so that's marketing itself also we

::

also have a marketing team that's do

::

uh videos photo shoots every month um

::

good thing about indonesia it's not as expensive as australia i assume so we're

::

able to do that you know hire an entire you know marketing team dedicated just

::

for that um and also we do flash sales we don't call flash sales now we do something like um.

::

Something more fancy i've got the english

::

word sorry but um something more fancy but basically we're

::

saying like if we have classes that's not

::

full we you know we cheapen

::

the rate and then they're able to book last minute

::

just like class class so i basically copy class class and you know make it into

::

my own marketing strategy like to direct buyers so i think yeah those are top

::

marketing strategies yeah and is there anything is there anything else that you'd like to share,

::

you know you've got this platform now is there anything we've missed or anything

::

that you want i mean could be on the class pass topic or any other topic related to studios.

::

Yeah i mean these days rough as you know like so many um cheap and really fast um certifications,

::

they're just everywhere you know three-day certifications i remember

::

when i took your certification it took me like what six months and

::

then we had to go through lots of tests and

::

exams um yeah but nowadays like

::

certifications getting shorter and shorter um and it's getting cheaper i mean

::

it's not a bad thing but then cheaper right it doesn't give you as you know

::

as better quality as the one you

::

know like uh more expensive but what i'm saying is that maybe as a owner.

::

It's better to kind of this is tricky um i guess pilates in some sense is very,

::

oh you know i mean there's i don't want to be the pilates police here but then

::

what you feel pilates is getting pilates is getting really different now you know what i mean like,

::

um i mean i'm just gonna say this what

::

i see in indonesia like instructors don't

::

know how to teach you know i mean they don't

::

know why they teach certain movements they

::

don't know why um you know this

::

certain movement targets the specific muscles they don't know biomechanics they

::

don't know like how to cue you know they just look on textbooks and then after

::

they look under this textbooks and they just say what's on the textbooks straight

::

to class you know they don't understand the skill,

::

what it takes to become Pilates instructors, to be a good Pilates instructors.

::

And these super fast certifications don't even teach them textbooks, you know?

::

They just teach them a very, very, very short course on how to move on reformers.

::

And so because of these cheap rate certifications, these instructors don't expect a good pay, right?

::

Because, yeah, they don't, they don't, yeah, you know that.

::

And then so studios, the new studios, they could just pay these instructors

::

very low rate, which makes the studios are able to sell really cheap rates.

::

So at the end we have these big

::

studios with a very you know standard I mean below standard instructors giving

::

out super super cheap rates so aside from ClassPass that's our main that's our

::

other problem dealing with super cheap studios,

::

and Pilates these days is so booming right it's so popular right And these new

::

clients who just got into Pilates, they don't know what's quality and what's not.

::

All they care about is what's cheap and what's not.

::

And what they can pay and what's too much for them.

::

So they ended up doing this Pilates, this so-called, with no Pilates movement.

::

Is that, you know what I'm saying?

::

And every time I see these videos, I feel like, oh, I really want to get them

::

to my studio, but I cannot pay my instructors that cheap.

::

So it's like, it's just like my personal battle.

::

I actually have a solution for that, by the way. What is the solution?

::

It's just, what is the solution? So I pay my instructors pretty good.

::

50 AUD per hour 45 to 50 For Bali, that's insane Yeah, that's insane Please

::

tell my instructors that Your instructors,

::

Well that's Australian wages In a country where The average annual income Is

::

like a quarter of The annual income in Australia,

::

Really?

::

What's the average annual income in Bali?

::

I'm going to look it up 50, 45 to 50. Maybe that's why most Australians come here.

::

Because we actually pay them really good. We pay our instructors really well. Yeah.

::

So what's your solution but um yeah but

::

aside from that they're senior instructors yeah so i think they um i'm happy

::

to pay them 50 that you know that much um but the thing is we have these new

::

clienteles right who's very new to Pilates and is not willing to pay uh you

::

know our standard class rate.

::

Sorry, I just Googled it.

::

According to Google, the average annual income in Bali is about 213 million

::

rupiah, which is $19,600 Australian dollars.

::

Is that the wage? That's the average annual wage.

::

For Indonesians? or for Pilates? No, for Indonesians. For Indonesians. Ah, no, it's tricky.

::

Because Pilates instructors were like higher. Right, right.

::

But if, I mean, if you're a native of Bali and you think, okay,

::

what job will I get when I grow up?

::

It's like, well, if I go work for Saria and I get paid 50 Australian dollars

::

an hour, it's like that is like literally four times what I would get paid if

::

I worked in a regular job.

::

No, because most studios are paying the same thing, especially in Canggu.

::

So studios in Bali pay pretty much that rate.

::

But in Enpasar, it's slightly lower. Because it's locals, yeah.

::

All right, so I'm sorry I interrupted you. What's your solution?

::

That's okay. So I had to do a negotiation with my instructors.

::

You know, here's the thing.

::

Our rate has to drop because of these new studios popping up.

::

And you know offer really cheap pilates so we have

::

to kind of get their client self as well otherwise you know

::

we're we're just going we're gonna just go

::

down so i negotiate what if we make a 45 minutes class and you don't have to

::

teach too complicated movements like there's no like roll downs or it's just

::

like a simple you know push and pull like um like squats or lunges you know,

::

some pretty basic movements, only 45 minutes.

::

And I will pay you $350,000, so $35 AUD, $35.

::

First, I would like, no, that's too cheap. Yeah, but then your class isn't very full.

::

And so which was better, having zero or 35? No, I sound like class class.

::

But it works rough. It works really well because then we have this 45 minutes

::

class we charge way less I charge the instructor way less it's only 45 minutes

::

and we get the new client sales from these new studios,

::

So it's a win-win solution. And then I ask my instructors during these classes,

::

the 45-minute classes, they have to upsell.

::

So if they see clients doing really good and keep popping up to this class,

::

just tell them, you're doing so much better.

::

I think you need to learn more movements or new skills that could only be available

::

on the 55-minute or the signature classes, which is the premium one.

::

So, again, I'm making those, I think, levels or what you call it, the status.

::

I like it. Yeah, that's a big thing. Well, I'm a big fan of 45-minute classes

::

back-to-back anyway because you can actually fit in 1.5 times the number of people in the same.

::

Like if you do two one-hour classes versus you can do three 45-minute classes

::

in almost that same amount of time.

::

So you can just fit more people through in the popular times when it is peak.

::

This has been a really valuable conversation. I think there are probably a lot

::

of people out there, studio owners who are working with ClassPass.

::

And maybe there are, I mean, dear studio owner, if you're listening to this

::

and you're working with ClassPass and you're making amazing money and you love

::

working with ClassPass, I'd love to hear your story.

::

And so reach out to me on social media, you know, and let's get you on the podcast.

::

But I imagine that there are a lot of people out there feeling pretty similar

::

to how you felt and just really worried about their business and for independent

::

on ClassPass, but at the same time, they kind of can't get off it.

::

So, yeah, I think what you're doing is really, I think it's the right move for you.

::

I think it's probably the right move for a lot of people to wean off ClassPass.

::

And I think giving privileges to members and restricting the privileges of people on ClassPass is,

::

and basically what you want to do is incentivize them to

::

get off rather than just kind of asking them to get off you want to actually make it

::

attractive to them to you know to to become members and so i think all of those

::

things you're doing are great um yeah it's been really awesome having you on

::

thanks so much sorry thank you raf thanks for having me so much fun thank you so much.

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Pilates Elephants
No-BS, science-based tools to help you become a better, happier and more financially successful Pilates instructor

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Raphael Bender