Is it time to take your memberships to the next level?

While plenty of tanning businesses are still thriving by focusing on driving the majority of their members to all-access memberships that showcase exceptional value, others are now starting to push the limits on membership pricing. Some of the major tanning franchises are now offering UV-only memberships that exceed $100 per month, and smaller, independent operators are also starting to migrate toward more premium pricing, including all-access options up to $150 and above.

As the tanning business model changed over the years, many operators began to focus their efforts primarily on their most expensive membership option. It became practical and profitable to try to push virtually everyone to all-access memberships that provide value that’s almost too good to be true. But equipment technology, operating costs, and consumer expectations continue to evolve. We’ve now reached a point where, if you have a stellar equipment selection, offering $79 or $89 all-access memberships might be selling yourself short.

Raising the Bar

These days, everything is getting more expensive, so it stands to reason that tanning should too. Your business expenses have certainly increased, and the cost of living is also on the rise for your customers. That could be viewed as a double-edged sword: Less disposable income could mean more hesitance to spend on luxuries like tanning, but people are also growing accustomed to seeing prices increase across the board.

Still, more than anything, new equipment technology has changed the possibilities for pricing. In the last few years, new, the technological advancements found in new, premium tanning equipment place it in a class of its own and easily justify an increased cost for access. Even without the latest tanning equipment, there are new ways to substantiate higher prices. More salons are also embracing higher-end spa and wellness services, which can greatly enhance the value of all-access memberships and perceptions of the quality of a business as a whole.

Whether you’re in a position to make a significant pricing adjustment or not, it’s a good time to take a comprehensive look at your membership structure, with particular consideration of the role of every level, and how each level might impact the success of the next. By elevating the cost of top-tier memberships, you can leave more room for a highly attractive and lucrative second tier. With an even more significant majority of your revenue coming from the upper levels, it’s then sensible to increase entry-level pricing as well. In turn, charging more for the base level only makes the middle tiers with better equipment and more value that much more appealing. It all works together.

 Of course, If you’re going to charge more, you need to offer more, but that can be accomplished with minimal additions by condensing five or six levels of tanning into three or four. If you’re concerned that your loyal customers won’t be able to stomach such a drastic change, you might be right. But that’s easily remedied by “grandfathering them in,” letting them stay at the same price as long as their membership is active. That might sound like a major hassle, but it also comes with a great benefit: There’s really no better strategy for membership retention. Members are going to be far less likely to cancel when they know they’ll have to pay more if they want to come back. And today’s salon management technology makes the price variations more manageable.

Click here to read the entire article in the latest issue of Smart Tan Magazine online.