More than three months after ClassPass started ticking off customers by raising prices for its “Unlimited” monthly memberships — first on the East Coast and then on the West Coast — the startup fitness company has some more bad news: it’s getting rid of unlimited memberships entirely.
The subscription service for boutique fitness announced today that current Unlimited members will keep their existing plan for a full billing cycle before they’re moved to the Core plan, which offers 10 classes per month (prices depend on your city).
“After much consideration and several attempts to appropriately price the Unlimited plan, I have ultimately made the decision to discontinue the offering to achieve better alignment between ClassPass, our customers and our partners,” said Payal Kadakia, Founder and CEO, in a statement. “While it’s never easy to disappoint some of our most active members, we’ve seen incredible traction on our Base and Core plans, as well as add-on class packs.”
In an open letter to the ClassPass community, Kadakia sheds a little more light on why the company chose to discontinue the Unlimited membership model, noting that it started with a promotion in May 2014 aimed at motivating new members to sign up.
“The promotion was a spark – it didn’t just help launch ClassPass, it helped ignite something truly special in our community,” Kadakia writes. “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.”
That didn’t quite work out, with Kadakia acknowledging that there’s a fundamental problem with the Unlimited plan: for each class that’s taken, the company had to pay studio partners. The more classes taken, the more ClassPass shelled out, rapidly increasing business costs.
“It can’t be a long-term membership option because it doesn’t align our business with our promise,” Kadakia writes. “What kind of business would we be if we wanted our members to work out less to reduce costs? We’d be sabotaging the vision at the very heart of this company.”
As a courtesy, ClassPass will give current Unlimited members an extra 10 free classes a month for the first three months they’re on the Core plan.
by Mary Beth Quirk via Consumerist