Case Study: Yoga Chain Ups Revenue With Perkville Loyalty Program
At Charm City Yoga, a chain of six yoga studios in the Baltimore area, co-owner Chris Blades says he brings in $2,000 extra each month because of his loyalty program, which rewards frequent customers and sends automated reminders to clients who haven’t come back after 30 or 60 days. By integrating his loyalty program with his online scheduling and payment processing systems, Blades has been able to create a hands-off program that he can use to reward customers without having to keep track of mobile check-ins or redemptions.
What makes Charm City Yoga different from other yoga studios in Baltimore?
We have is a dedicated yoga advisor who calls every new student and makes suggestions of classes that would be appropriate. At the end of the month, [the advisor] tells students what they can move on to, in terms of being a member or buying a class card, and suggests classes and trainings they can take. The second thing that’s unique is that we have a very vibrant teacher-training program. After practicing with us for a year or two, quite a number of our students choose to do our teacher training. And from that, a small number end up teaching for us. We’re very active in trying to bring in new students and also reward students who practice with us. We’re definitely unique in having our own rewards program. We use Perkville. The program tracks every time a student comes to class and gives them points. It [also] tracks if they Facebook us or tweet about us, and gives them points. After collecting, I think it’s 150 points, they can redeem [those points] at the studio for classes or retail or whatever they want. That actually has created quite a buzz, especially on Twitter.
Have you seen an increase in people talking about your business on Facebook and Twitter since you started using Perkville?
Yes. It’s a difference between nobody talking and lots of people talking. We have three to five, sometimes seven tweets a day from students who are tweeting about us, so this has really created quite a buzz. From one perspective, I wasn’t sure how to use Facebook and Twitter. As a studio, we could be sending uplifting ideas or [saying] “Come to class today,” but I was never convinced that was a good way to connect with students. With Perkville, our students are tweeting about us and talking about us on Facebook — sending photographs and liking things — so it has made sense for me. As a business owner, it’s like, “Wow, that’s why those things are really useful.” It showed me how we make those connections.
Can you walk me through how a student at your studio might use Perkville?
It’s really easy. We tell our receptions to give new students a heads up that within a day they’re going to get an email from Perkville. We [also] use a company called MindBody, which is our point of sale software. MindBody Online does everything. It keeps the class registration sheets, it keeps everybody’s credit cards, it shows the schedule to all the students. There is a huge database, and I guess every day Perkville interrogates the MindBody computer to find out all the emails of students who attended classes in the previous 24 hours. Then it says, “This is a new email, so this is a new student. I’m going to send them a welcome email. If it’s a regular student I’ve had before, I’m simply going to give him or her five points because they attended class.”
If I’m a new student, I come in and I’m told about Perkville. I get an email the next day from Perkville, and I say, “Yes, I was to join.” You simply click the link and you go to the Perkville site, and it shows you how many points you’ve gotten. Then, every time I come to class, I can go and look at how many points I’ve got. They accumulate, and then at some point it will tell me, “You’ve got 100 points and you’re ready to redeem.” If I really want to tweet about [the studio] after a class, I go back to the Perkville site and find the place to send a tweet about my experience at Charm City Yoga. I write the tweet out, and then Perkville puts it on Twitter.
What happens when a student is ready to redeem his points?
They print out a coupon or they show their smartphone at the studio and we say, “You’ve got 150 points, and that translates to $15.” We simply put $15 onto the member’s account. It’s as simple as that. Basically we’re giving them cash, but we’re putting it onto their account. As a business owner, this is fantastic because I don’t have to do anything. I’m not keeping track of these rewards; it’s all being done by the computers. It’s a really clever way to reward people, and it’s self-managed.
What kind of value do you see when you compare the costs you pay out to the extra income you generate because of the program?
What Perkville also does is after 30 or 60 days, it sends an email to every student who hasn’t come back and it gives them a Groupon-like offer. “We’d love to have you back. If you want to buy a five-class card at this discounted price, you’ve got two days to buy it.” Many people buy that, because they didn’t not like us, they just stopped coming for whatever reason. And another thing is that students can [earn points] by referring their friends. So now Perkville is basically monetizing me. I’m bringing in about $2,000 a month, which is significant, from either returning students or brand new clients that I would have never really had. I typically pay about $55 a month to Perkville. Because I have six studios, I’m a fairly expensive member. That $55 in user fees is bringing me about $2,000 worth of new money and giving me free advertising on Twitter and Facebook.
Then on the other side of the ledger is how much I’m redeeming. When I ran the figures six months ago, I was redeeming $1,000 [in rewards] a month. But those dollars are not right, because I’m not giving anything back. I’m not paying the full money on that $1,000. For example, it’s like if I sell water for $1 and it only costs me 35 cents. So that $10 [in reward dollars] I give out is not what I spend at the studio. The value is only about half of what it actually costs me.
Why are loyalty programs so important for small businesses, and yoga studios in particular?
We spend a lot of money in getting new clients through paper ads, radio ads, and putting fliers out. We spend all this money, but then we forget the client that becomes a loyal customer. For me, giving that loyal customer a reward is fantastic. The biggest thing you forget in having done all your marketing is to love the clients that keep coming back, because they become your raving fans and they’re using your facility the most. The fact is that this rewards program keeps students loyal to our business. I’m touching every client who comes back, and I touch them every time. I really think it has created quite a buzz for our business.
It’s the same with frequent flier miles or credit card companies that give you miles. It makes you loyal. I think that’s a very powerful way to reward loyalty and to thank you for the business. I was excited about Perkville because it [gives] me, a little small business guy, the power that airlines and credit card companies have to thank people. No matter how small the business is, I think computer-generated rewards programs are really effective and modern, and [they] take very little effort.
Stephanie Miles is an associate editor at Street Fight. This interview has been edited for length and clarity.
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