If you’ve been in the fitness industry long enough, you would’ve seen a few different ways software developers charge for their services. Today, we’re going to take a closer look at the most common ways software companies make money from fitness professionals and why we at The Bright App takes a different approach.
This is by far the most common way for modern software companies to charge their clients. In the tech industry, this is called SaaS (Software as a Service). This is great for the software companies, because they get a predictable, recurring revenue stream, every single month. Most times they offer a discount if you pay an entire year up front, which is even better for the software makers because they get a whole year’s worth of revenue on day 1. Some gyms offer memberships this way too… for the same reason.
Monthly fees, however, in most cases work against you, the fitness professional. Even in the best case your revenue will tend to be the most during January when everyone makes New Year’s resolutions to lose weight, and the least during December when everyone is away traveling. Paying the same fee, whether or not you make money means your profitability can vary widely from month to month. Even worse, if the software doesn’t work as well as advertised and you’ve already paid for the year, good luck getting your money back.
Per Feature Fees
This is also known as bundling, and many times work in conjunction with monthly fees. For example, you’ll get feature A, B, and C for $19 per month, or features A, B, C, D and E for $39 per month. This is also great for software companies because they can capture more value from their customers. This is why airlines sell first class tickets costing 10 times more than economy tickets, even though you’re both on the same airplane. Most commonly, there are three bundles. The first bundle is the cheapest and also gives you the least number of features. The last bundle is the most expensive and the middle one is what they expect most people will choose.
What if you really need feature D? In the example above, you’ll have to pay twice as much for essentially the same software. And you’re forced to pay for feature E, which you probably don’t need. And worst of all, the features are already built, and the software developer purposely disabled some of them for the lowest tier bundle. I don’t know about you, but that doesn’t sound like they’re on the customer’s side.
Per User Fees
This is also very common and like per feature fees, they often show up as monthly fees as well. An example is if you use a software with 10 clients, you pay $19 per month, but if you want to go up to 100 clients, it’s $99 per month. This may seem reasonable at first. If your fitness business is bigger, maybe you should pay more. But think again!
The real secret is that for software, an additional user costs virtually nothing more to the software company. It costs about the same to serve 1 user, as it does to serve 1000 users. And not all users are the same. If you have 10 clients that pay you $100 per month, or 100 clients that pay you $10 per month, your revenues will be exactly the same. But as soon as you add the 11th client, your fees go from $19 to $99, regardless how much additional revenues you made. Again, the software company actually spent time to create this artificial limit, not to help you, but to make more for themselves.
This is by far the worst, and software companies that do this, you should avoid like the plague. They purposely hide the fees in small prints, and force you to sign complicated contracts. When you make a sale, you’ll have no idea how much your actual cost is until the end of the billing period when you get a nasty surprise in the bill. Cell phone companies used to do this a lot, and if you remember that, you’ll also remember how hard it was to budget for it.
Software companies that does this is usually on their last legs. They’re under pressure to increase revenues any way possible, but it’s always a lose-lose. The customers that flee, never comes back, so the company usually ends in a death spiral to oblivion.
Why The Bright App is Different
It should come as no surprise that The Bright App does none of those things. We don’t charge monthly fees. Ever. We don’t bundle our features. You have all of the features we made the moment you download it from getbright.app. We don’t throttle you based on number of clients, instructors, or managers. And we don’t and never will have any hidden fees or contracts.
Because we’re on your side, we charge a 4% application fee for every transactions (on top of the usual ~3% fee for credit card processing). Our philosophy is we don’t deserve to be paid unless we make you money first. Since we don’t take the fee until you get paid, you always know you can afford it. On slow months you’ll pay less. If you go on vacation for a few weeks and make nothing, then you automatically pay nothing.
We do things differently here at The Bright App because we’re 100% committed to the fitness professional. We want to make your business grow because when you grow, we grow.