A deal you can’t refuse
Let’s be real, folks, when your main customer base riots after you change your business model, you’ve clearly done something wrong.
That’s right, I’m talking about ClassPass, the latest startup scandal on this side of the internet. While trying to bring in customers in their fledgling years, the fitness class provider offered a deal that they couldn’t quite sustain, and now they’re backing out.
What was the original draw?
ClassPass is based on the idea that you should be able to take any fitness class at any fitness studio in your city without paying proprietary membership fees for each institution. That means barre one day, spin the next, and yoga on Sundays, wherever you want.
Their unlimited option started as a promotion to bring in customers and provided infinite classes to members for a mere $125 a month — a gamble that could pay out for either consumer or company. Now ClassPass has decided to stop taking that gamble, but at what cost?
The backlash
Loyal members are crying out on social media, chastising ClassPass for ripping the unlimited option out from under their yoga mats. While CEO Payal Kadakia has good reason for discontinuing the plan, there has got to be a better way to ease her customers into the idea.
Kadakia wrote a frank open letter on their company’s blog saying that the unlimited plan was fundamentally flawed.
“The promotion was a spark,” Kadakia said in her letter to the ClassPass community. “It didn’t just help launch ClassPass, it helped ignite something truly special in our community. I was so taken aback by the promotion’s success I focused on nurturing that spark assuming we’d figure out the business model as the company continued to scale.”
News flash, they didn’t.
Business models can evolve, sure, but no company can sustain an unlimited anything for very long.
For around 125 bucks, users could go to any participating boutique fitness company for a class, normally worth $35 each. That means power users inspired by the deal to attend a fitness class every day would reap classes by the dozen for around $4. A good deal to say the least, but all the more damaging to take away.
[clickToTweet tweet=”People are pissed that ClassPass has changed business model yet again.” quote=”Companies have changed their business model in the past, and it’s necessary to adjust pricing to make your business work, but this is a PR nightmare for ClassPass. People are pissed, and rightfully so. It’s not our fault they sold us something that didn’t make them any money. “]Teaching moments
Let this be a lesson to all entrepreneurs. You want people to love your business, but you have to love your customers back. When things change, you have to baby them into it, make them see why it will be good for everyone. You can’t just complain that their business wasn’t profitable.
ClassPass thought their unlimited plan was unsustainable, but we’ll have to see if they can sustain their company without it.
