Dear Rae Community and Fellow Students,
In February, we celebrated our 12-year anniversary of serving our community with the gift of dance and movement — and we couldn’t be more excited and grateful. As we continue to grow and move past the COVID-19 set-backs within the dance, wellness, and arts industries, we are looking to include our community in important discussions around our small business and ways we can continue to grow.
As many of you know, our goal at Rae Studios is to create a safe space for dancers of all levels to learn, grow, and educate themselves in the field of dance. Additionally, our underlying mission with both Rae Studios (a local dance studio) and Rae Agency (a talent agency representing models and dancers) is to provide job opportunities for working artists who live and work in the Bay Area. We have instructors from San Francisco, Oakland, and San Jose, and special guest teachers coming from Los Angeles and New York.
We believe in transparent communication and including our community in ways that benefit and support them and Rae Studios. With that, we ask you to review the following information with a neutral mindset to understand the point of view from a small business.
Today marks the launch of “The ClassPass Removal Initiative” — an initiative to inform and educate current and future students on how ClassPass affects Rae Studios and other like-minded small businesses, while creating accountability and transparency.
For some background, we have been partners with ClassPass since their launch in San Francisco in 2014. In the beginning, it helped us grow our business, but we began drifting away from it as classes began to pick up prior to the pandemic. When COVID hit, we needed the support of ClassPass and opened the majority of classes to attract new and returning students — ultimately to keep our doors open.
Now, it’s time for us to move away from ClassPass again to continue to build a sustainable business and best serve our community.
With this article, we want to inform our students of the benefits and detriments of ClassPass and other discount-driven apps and what you can do to support small businesses.
WHAT IS CLASSPASS? -
ClassPass’s goal is to get its clients to try new ways to stay active by allowing them a discounted price on various activities at gyms, yoga studios, dance studios, spa’s, and more. The intention behind ClassPass was to serve those who may have moved to a new area and are looking for activities, fitness, or wellness; people who travel a lot; people looking for a new place to work out; and people who are looking to get (more) active.
While all this sounds amazing, ClassPass did not seem to have taken into account how their model would affect other businesses, teachers, artists, and those behind the scenes.
CLASSPASS FACTS -
Classes are offered way below market value, with ClassPass offering discounts between 50% - 90% off.
Their introductory offers of free-month trials even mean zero revenue for businesses.
Our drop-in rates are $23. ClassPass students pay anywhere from $3 - $10 per class — making it hard for studios to pay their teachers and staff, while ClassPass takes most of the profit.
Beyond that, these low rates also impact a business’ ability to cover overhead costs, such as insurance, payroll tax, rent, electricity, and more.
When booking a class or service, ClassPass students only see the discounted price but not the effects it has on the business involved.
GENERAL QUESTIONS: (If you have more questions, please send them in, and I, Jessica, will be happy to answer them.)
Q: How does ClassPass (CP) affect small business owners (in both a positive and negative way)?A: A positive effect is that CP helps attract new customers into the business. However, most CP members do not wish to turn into a regular customer and make full-priced purchases directly from the business. On the contrary, CP students often call or email the studio management team asking — and at times demanding — to “open more seats” for them and complaining that popular classes are not offered on CP. We have had many experiences where CP students will bring a negative attitude to the studio and towards our hosts and management team when it comes to paying our regular studio rates.
Q: How does the effect of ClassPass trickle down to the instructors?A: Since CP’s direct payout to Rae Studios starts at $3 per person, this is not enough to cover our general overhead. Therefore, we have created a base rate + split for instructor compensation. Specifically, Rae Studios pays teachers a flat base rate depending on the instructor's experience in addition to a 50/50 split rate per attendance from full-paying customers. Our long term goal is to double our teachers base rate and increase their overall revenue in order to properly compensate for their time, travel, creativity, and knowledge.
Q: Are all the classes at Rae Studios offered on ClassPass. If not, why?A: No, we only use CP to support classes that need more advertising or during our slower seasons. Our ideal situation is when classes do not need the support of CP or other discounted ticketing sites.
The ClassPass Removal Initiative — ACTION PLAN:
Step 1: If you have been introduced to Rae Studios from ClassPass, welcome! A suggested timeframe to use discounted apps is 1-3 months. This way you can try multiple classes to see if we are a good fit for your dance journey.
If you have been with Rae Studios for over 6 months, please comply with this initiative plan and buy directly from the studio. Discounted offers are available solely for first-time students.
Step 2: Visit our New Student Page and fill out our New Student Survey so we can make class recommendations tailored to you.
Step 3: Snatch the New Student Deal or Special Class Card Packages available . These tickets change frequently depending on the season and are available on our website and on the MindBody app. New Student Deals are offered to ClassPass users transferring to Rae Studios for the first time.
Current Discounted 5-Pack Deal:
Step 4: Know that supporting the business directly is extremely vital to the success of Rae Studios. If you are a student who drops in for classes, buys packages, is a monthly member, or is donating time and energy, know that we truly appreciate you and EVERY SUPPORTIVE ACTION MATTERS. Please share this initiative with friends and family — we THANK YOU for understanding and supporting small businesses and local artists.
Step 5: If you are someone who needs financial help, we still want you to be a part of our community and be able to enjoy our classes. Please visit our work-exchange program for more information.
Finally, I speak on behalf of all Bay Area small business owners and local dance studios — please be mindful and think twice before using discounted ticketing sources for the longer term. Our local dance teachers and dance studios have experienced tremendous financial hardships since the pandemic and this is the year of rebuilding. Let’s continue to support each other and grow together.
Thank you for your time and consideration.
Jessica Rae