When Mike Sellars reduced the price of his highest EFT membership, including UV, spray and spa services, to $69.99, he and his wife “were scared to death” about the potential results. That’s likely how most tanning business owners feel about the idea of giving away everything in the house for one low price.
But, it turned out to be one of the best decisions he’s ever made for his business. Sellars and numerous industry leaders are now structuring their menus around all-inclusive, high-value packages, and selling more memberships at a higher rate, with better retention.
“We were a little apprehensive about doing I, but we tried it, and it worked out well,” Sellars says. “Here recently, we’ve gone pretty much to all-inclusive is all we sell. We have met a bit of resistance, but when you look at the numbers, you’re going to lose some because they’re just not going for it, but you’ll make it up just because of them staying on longer.”
The rationale is no different than the reasons the majority of tanning businesses now operate on EFT-centric models in general. It’s worth it to accept less money in return for the guaranteed, consistent revenue of a membership. The next step up is realizing that it’s worth it to provide the additional value necessary to drive a majority of your customers to more expensive memberships.
The strategy isn’t much different than offering your highest level of UV membership, or coupling it with unlimited spray, at a great value, but the spa services can be the icing on the cake. On a larger scale, Dennis Ligon has embraced the all-inclusive spa membership approach in his 21 Sundays Blue Box locations. He invested in a range of spa equipment, from which he primarily only generates income from the all-inclusive packages. He knows tanning is still the primary selling point, but people like having more options available.
“It goes back to just like when you go to a buffet, you pay $20 or whatever, and it may be 150 items, and let’s face it, you’re going to eat maybe 10. You’re so overwhelmed by the thought of ‘Wow, I paid this and I get all of it.’ If you order off the menu, it feels like you’re not getting as much, even thought you probably eat the same,” Ligon says.
“Some people want a low-end membership, but most people would rather pay one set price and have an array of whatever they want when they want it. For $20 more, if you use it a little, it’s well worth it, so that becomes very popular and probably our most profitable membership as well. It’s served us very well since we’ve had it.”