What would you think if I told you there’s a studio owner out there that grew their bottom line by 30 percent, without adding a new program or service? You’d probably think there was a catch, right?
Take Terri Fry, the owner of Bikram Yoga Chelmsford in Chelmsford, Massachusetts, as your proof of concept. The owner achieved the feat of increasing her bottom line by 30 percent thanks to one, simple move: She streamlined her billing process through MINDBODY.
Prior to partnering with MINDBODY, a studio management software company, Fry managed her studio all on paper. “I was a true punch-card person,” she said. “I knew I needed to get a computer system and I wasn’t sure which one I was going to go with.”
Fry began researching, and after looking at a handful of software technologies, decided on MINDBODY due to its multi-functionality. “Everything I wanted the software to do, MINDBODY does,” she recalled. “The other softwares I looked at were good, and there were certain features they had that I really liked, but they didn’t have all the features MINDBODY had I was really looking for.”
One of those features included the ability for Fry to capture students’ credit card information, store it and automatically bill students monthly — something that took quite some time when Fry used a paper-based system. “Now it is so seamless,” she said.
How exactly did this lead to an increase in Bikram Yoga Chelmsford’s bottom line? According to Fry, because it’s easier for students to pay for classes or other items in-studio and online, she’s able to capture dollars that otherwise she would have missed.
To illustrate, Fry recalled this past Valentine’s Day, when she ordered holiday-specific T-shirts featuring the Bikram Yoga Chelmsford logo. That very day, “Half a dozen students wanted one and asked if I could put it on their account,” she said. “Because I had their credit card on file, I could charge it to their account. Right there, I sold a couple hundred dollars of t-shirts in just a few minutes, all through MINDBODY.”
In fact, Fry stated over the past 12 months, she’s sold $5,400 worth of water, mats, towels, t-shirts and more. “I know a lot of those dollars would have just been lost,” guessed Fry. “People often come in and forget their money, but they want a water or mat. We just put a balance on their account. All those little nickel and dime things, it’s just so easy to do having that [credit card] information captured in MINDBODY.”
Although MINDBODY automates monthly billing for Fry, the studio owner prefers to take a hands-on approach when managing credit card charges that fail to process, which can occur for a variety of reasons.
Every couple of weeks Fry runs a report in MINDBODY to see which student accounts are past-due. She then personally calls the customer or sends them an email stating, “Hey, your credit card didn’t go through. Did you happen to get a new card?,” she explained. “I never say it was ‘declined.’ I never want to assume it’s monetary. Nine times out of 10, people say they got a new card and you can resolve it right then and there.”
Some businesses outsource past-due accounts to third-party billing and collections companies, but Fry advised against this practice. Instead, she leverages the positive relationships she’s developed with her customers to bring the accounts up-to-date.
“It’s very much a personal relationship we have with our students,” continued Fry. “You can’t be afraid to have conversations about money, because it is a business, but yet those conversations can be done in a way that is very friendly. Truthfully, I would never consider outsourcing [collections].”
As a final billing tip, Fry said charging her students for the upcoming month versus the previous one prevents students from taking classes they haven’t paid for. “Because it bills the month coming up, if a student’s card was declined and I wasn’t able to get payment, they just wouldn’t be able to take class,” she explained. “And for the people who have monthly memberships, we see them all the time, so it’s easy to have a conversation about resolving a past-due charge.”
Considering software like MINDBODY can be an investment for most studios, due to the ease of billing customers and other features, Fry explained it’s been well worth the purchase.
“My Earnings Before Income Tax (EBIT) has gone through the roof,” said Fry. “You can have great sales, but you could have crappy earnings. I’ve not only grown my overall sales by 20 percent, I’ve grown my bottom line by almost 30 percent. I consider MINDBODY an integral part of my business.”