Welcome to our new series, ClassPass Partner 101. We’ll dive deeper into the topics you care about most, so you can learn how the platform works for partners, gain insight from ClassPass and hear directly from other partners. This is part three of our series — read part one here and part two here.

As we’ve outlined in our series, ClassPass is expanding the health, wellness and fitness industry. Both by introducing individuals brand new to boutique fitness to their first workouts, as well as supporting businesses by bringing new faces in your door, driving incremental revenue by filling excess capacity and providing tools and resources for increased insight into user behaviors for more effective business decisions. ClassPass is directly revenue aligned with our partners — the only way we can grow is if your business grows.

Goal alignment

We shifted our business to a ‘credits’ model in order to create a true marketplace where inventory can be priced variably and dynamically, to reflect varying levels of demand for different kinds of class spots. Unlike competitors, ClassPass doesn’t rely on a breakage model (i.e. the less people work out, the more we make) — we actually want people to go to class and use their credits, so it’s in our best interest to ensure they can find studios and classes they like. So how does it work? 

Jeff Bladt, Senior Director of Pricing and Inventory at ClassPass, explains: “ClassPass makes money when users buy more credits. There is a direct relationship between how many credits a user consumes (by attending classes or appointments) and how many they buy. To this end, the best-case scenario for ClassPass would be 100% of users using 100% of their credits each and every month. This is very different from competitor models where they only make money when users don’t go to class. These users would buy more add-on credits, upgrade more often, invite more friends and stay on ClassPass longer.”

In addition to working toward the same goal of getting more people into more classes, ClassPass technology like SmartTools takes out the guesswork, effort and administration tasks — so you can spend more of your time and energy doing what you love.

Technology to move the industry forward

We developed ClassPass SmartTools to help you maximize the use of ClassPass for your business, so you earn the most for your busiest classes – and fill the empty spots in your less popular ones, all while ensuring your direct members have ample space. SmartTools include dynamic pricing engine SmartRate and automatic spot allocator SmartSpot — our platform is always evolving in order to help our studios maximize the experience. 

Bladt breaks down how it works. “ClassPass looks at the impressions (how many users view a schedule and its credit price) and conversions (how many reserve or ‘purchase’ — at that credit price). For dynamic pricing, we use machine learning to iterate through different price points (and the corresponding studio payouts) for each class — such that we strategically develop a data set that allows ClassPass to determine  the likely conversion (and expected revenue) for each price, relative to class start, for each class a studio offers For studios with limited data, we use aggregate data to build these demand curves, allowing ClassPass to revenue maximize partners that don’t individually generate enough data to build their own curves/data set.”

“I like the ease of the platform and the ever evolving-tools, like dynamic pricing and algorithms used to fill high- vs. low-demand classes. I think SmartSpot is really fascinating, I love how it fills unused inventory,” recalls Olivia Young, CEO of box + flow in NoHo, NYC.

In addition to optimizing for growth, SmartTools optimize for efficiency. Asi Shoshan, Managing Director of Big Hit in Toronto, ON, says, “We noticed our teams have become more efficient, as the technology-focused on the things that our studio leaders had to do manually in the past.”