With the advent of the COVID-19 pandemic, the landscape of fitness transformed dramatically. The conventional gym setting was no longer viable, leading to a surge in demand for on-demand video exercise programs. However, providers, including our case study subject, grappled with a significant challenge – how to strategically price their offerings in this evolving market.
In response, in the app they conducted a comprehensive analysis, scrutinizing various value drivers to understand their impact on demand. The outcome was the identification of two feasible price points – $14.99 and $29.99 – for a monthly subscription to online exercise programs tailored for the US and Canada, spanning all market segments. Additionally, there was a long-term vision to elevate the subscription price to $49/month. This pricing strategy not only addressed the monetary aspect but also shed light on the correlation between each exercise program and the customer’s willingness to pay.
Implementing these insights, the company introduced an enhanced version of on-demand video exercise programs, accompanied by a price adjustment from $14.99 to $29.99. The impact was remarkable – a staggering 100% surge in revenue, with a modest 5% decrease in sales volume for half of their offerings. This success story underlines the power of strategic pricing in navigating market shifts and maximizing profitability.