Beyond the Reformer

The Business Model Behind Multi Million Dollar Pilates Studios with Lise Kuecker

• Nic Lenny • Season 4 • Episode 47

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Most Pilates studios are sitting on far more revenue potential than they realise.


With the right pricing, membership strategy and business model, a single studio can grow into a multi-million-pound business without needing more space or more classes.


In this episode, Nic sits down with Pilates business expert Lise Kuecker, founder of Studio Grow, to discuss what actually drives profitable Pilates studios.


Lise works with hundreds of boutique fitness studios around the world and shares the real numbers behind successful studios.


From pricing psychology and memberships to team structure and sales metrics, this conversation reveals the systems that help studio owners turn passion into a sustainable and scalable business.


They discuss the most common mistakes studio owners make in their early years, why many studios unknowingly leak profit, and how simple adjustments to pricing or membership structure can dramatically increase revenue.


Timestamps

00:00 Intro to Lise

01:57 How Lise first got started in Pilates and the fitness industry

04:11 Early mistakes many studio owners make in their first year

09:45 How successful studios protect themselves from competition

11:53 The story behind how Studio Grow was created

12:54 Understanding memberships and how studios actually sell them

18:55 Where studios often lose money without realising

22:29 How labour models and organisational structure impact profit

24:12 The financial metrics every studio owner should track

24:44 Pricing strategies that guide clients towards the right option

27:40 Why memberships work and the psychology behind commitment

29:03 What the most successful Pilates studios do differently

34:22 Global boutique fitness trends and the rise of niche studios

40:03 Quick-fire questions


If you’re a pilates studio owner looking for a mastermind to help you scale, systemise, and grow your business, check out Studio Grow here for a FREE masterclass! 


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Connect with Lise:


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SPEAKER_00

Coming up on today's episode of Beyond the Reformer.

SPEAKER_01

Passion doesn't equate profits. People think that the day they open the door is the day the business starts. And that is just not factual.

SPEAKER_00

Working with you has changed my life completely. Today I'm joined by Lizzie Kika, founder of Studio Grow, former multi-studio owner, and one of the most respected mentors helping Pilates and boutique fitness owners build profitable, sustainable businesses worldwide.

SPEAKER_01

We're opening 100% of Pilates Studios profitably. I normally hear that marketing is people's biggest gap. Normally sales is a bigger problem than marketing. The single biggest difference between when I started Studio Grown today is I would say that about 95% of Studios' pricing is undervalued. What excites you most about the future of Pilates Studios? I think we're only getting started.

SPEAKER_00

Hello and welcome back to Beyond the Reformer, everyone. I'm Nick Lenny. I'm a Pilates teacher, a studio owner, an educator, and your host for these conversations, exploring the people and ideas that are shaping the big wide world of Pilates. Today's episode is a special one for me because Lisi has been a huge mentor and a support in my own journey as a studio owner. I have been trying to get her on the podcast for, well, since the beginning, really, quite a long time. But as you can imagine, she's really busy. We're in different time zones, working with studio owners all over the world. So it's been hard to tie her down. But we actually managed to record this when we were both in Los Angeles earlier in the year, when we were both there for the Pilates expo, and there was this teeny tiny window between events where we managed to sit down together and have this great conversation. I would have liked longer. I could have talked for a lot longer. But I'm so glad that we did. Because Lisi, she really is the queen of studio business strategy. It absolutely has changed my life. I have to be really honest about that. And in this episode, we dive deep into what it really takes to run a successful studio, the mindset studio owners need to develop, and some of the biggest challenges that she's seeing across the Pilates industry right now. So if you want to learn a bit more about business, you want to get in the right mindset, this is the episode for you. Before we get going, could I just ask, could you like, follow, subscribe, tick the button, whatever platform you're on? It's a small thing, it makes a huge, huge difference. It allows us to keep the podcast free and available to you. It allows me to fund it. So I would be hugely grateful if you could do that. And that allows me to get guests on like Lisa. So let's have a chat with Lisi Kika. Lisi, we are here in California. Thank you so much for joining me on the podcast today.

SPEAKER_01

I mean, this is kind of special because uh you're one of my uh my favorite and and and some one of my favorite friends in the industry, but also someone I've known for years. And uh actually the last time I saw you was in California.

SPEAKER_00

Was in California. The first time I came to California was to one of your events. Yes. And here I am back now, and then you were like, I'm gonna be there. I was like, Well, do you want to come on my podcast? Please, please, please. Yes, please. And I'm so passionate about sharing this story today because working with you has changed my life completely. Yeah. God's honest truth changed my life. And I know you're really passionate about doing that for studio owners all over the world. And I think you have such an interesting story because, of course, you have Pilates studios. That's been part of your life. Tell me about the story of going from being a Pilates studio owner, I know you then sold them, but then to thinking, I want to share this with other people, this method.

SPEAKER_01

Yeah, so so my very first studio was rooted in Pilates and yoga. It was one of these that I fell in love with. I came to Pilates because uh I'd moved back from Boston to New Orleans, walked into this big gym, and uh I walked upstairs. I'd gone to this since I was a this gym since I was a child, and I walked upstairs and suddenly I was like, oh my God, what are these machines? Like, why are these people flying through the air on these reformers? Which I had no idea what they ever were up until that point. So I knew it was something we wanted to incorporate. I became certified within a month. I started my first certification. I began a comprehensive certification a year later, you know, kept on going. And so, you know, my first studios incorporated Pilates and Yoga. We eventually added CrossFit. I'm probably the only person in the world that put those three together, but worked out A-OK. And then when we built our brick and mortar studios, my first studio was inside of Intel Corporation. Our brick and mortar studios, we had Pilates in four of our five locations. And I just, I felt like it was something that to me combined everything that I loved about therapeutic movement, but still gave me uh a strength, a flexibility, the kind of body that I really wanted. My mother was passionate about bars. She had studied with Lottie Burke, and I felt like Pilates took so many of the things that I'd learned as a child from a mom who would fly back and forth to New York obsessed with bar, and it took it to a level that was so far beyond. So I have to say that, you know, Pilates is just, it's rooted within me. I have a studio on the third floor of my house still. So even though I I've sold my studios and actually I worked in a project that I had an equity stake in in Dubai from the end of 2023 to 2024. And I wish I could show y'all, it won't, it won't happen yet, but I wish I could show you the Pilates studio that we built there, both the private Pilates uh studio and then the group Pilates studio. So Pilates has been, you know, it's been at the core of my story. It really is one of my origin story moments in fitness on whole. And so when I talk to people that are like, oh, you work with all these boutique fitness studios, about 45% of our work still at Studio Grow is is in Pilates studios. And I think it's not just because Pilates is booming, it's because Pilates is something near and dear to me.

SPEAKER_00

When you work with those studios, is there something that you commonly see as a mistake people make in their first year?

SPEAKER_01

Oh my gosh. If I'm speaking about our first year today versus our first year 15 years ago, it was a lot more forgiving 15 years ago or even 10 years ago when someone had their first year in a Pilates studio. And a decade ago, most Pilates studios looked like what we would have thought of as traditional Pilates studio, like you and I have done. They had privates, they may have small groups. They oftentimes weren't more than 10, uh, 10 people in a room. I think we had more like six or eight in a room with our small groups at the time. They may have eventually done mat-based classes or things like that. But Pilates has evolved dramatically in the last 10 years. So at that point, 10 years ago, little competition, variety of different things in the product stack. You could make a lot of mistakes in your first year, and it could be relatively. As a teacher, too, by the way.

SPEAKER_00

We were saying this to our teachers recently, when we opened our first reformer studio, we were growing with the clients. Whereas now the clients come in and they expect that level. And it's hard for new teachers coming through. And the same, it's interesting. Yeah, you're right, but studio owners as well.

SPEAKER_01

Yeah. And so nowadays you're dealing with something very different. You know, if I look at what are the biggest issues that face people today in their first year, the first and most foremost is did you choose the right location and did you sign the right lease? I can't tell you how many people uh come back to us or come to us six months, you know, after they've opened and they're like, I have a problem. And I'm like, the lease is something that we can't fix. Choosing your right location, literally the right neighborhood, the right spot in that neighborhood. If you're not doing the demographic research, and that's going to involve using, you know, for our team, we use uh Buxton in the United States and Taragamo outside of the United States. These are expensive softwares. You want to be working with somebody who's has access to them so they can really say, hey, these locations that are two blocks apart, one is likely to make you a lot more money and make your uh your job a lot easier. Second biggest thing is I think people think that the day they open the door is the day the business starts. And that is just not factual. We know and we can look, we've been in business for 10 years, which is terrifying for me to say this at Studio Grow. But we've been tracking since the third year we were open, like what markers really impact profitability at roughly three years, five years, and 10 years. And a marker that always comes through is that people have opened their doors profitable. They've done it by having a profitable pre-sale, they've done it by ensuring that they have really laid out their systems, they've laid out all of these things at the very beginning. And in Pilates Studios, I mean, we are opening 100% of Pilates studios profitably. Most studios that we're opening right now are moving onto a wait list within three months. I mean, like that is something that we want to see in a Pilates studio that is opening today. And the final piece, and you really touched on this, Pilates has always had a labor struggle, I'm going to say. You know, I spent more on my comprehensive certifications, I have two of them than I did for my college education. Same. Okay. I always joke, this cost me more than my degree. I mean, it's a hundred percent did. And so, you know, when I look at that and I'm like, whoa, wait a second, you know, for me to find someone who has already invested, I don't know, 10 to 20,000 uh dollars or the case of a pound, God only knows, at least probably between 7,500 and 15,000 pounds, it's a radical difference. And they may not even be trained to a quality that I actually want. You know, I might be looking for someone who has a little bit more experience therapeutically, or has more experience working with athletes, or has more experience working with people on rehab or with special populations. And so I'm still gonna be carrying this through. And education has changed dramatically. I have people nowadays who will come to studios and they're like, I did a two-week online certification and I wasn't even on a reformer, but I'm ready to treat to reformer classes, and I'd love to learn on your reformer. These are shifts and changes that if you don't nail the labor model and how you're gonna train people, both people who have not been certified and people who have been certified. Those are two very different sets. How you're really thinking of how you're going to build a career path for these people so that they can move and grow with you, like you're really doing your first year a disservice. And I think those things are all setting you up for failure.

SPEAKER_00

I think it's really interesting, those points that you made. I I've always find it so interesting. You know, it's in the UK now. I know you've had it in the US for a while, the boom, there are studios opening, Pilates studios opening all over the place. And what I've learned from my American uh friends now, because I've met lots of American friends thanks to you, is don't worry, like it will be fine because this is fine. But back to your point about leases, as you know, because I often ring you about this, I spend a lot of time looking at so many properties that I discount for many, many reasons, because normally the maths is not right or you know the space isn't right, or there's something not right. I think it's quite hard to find a location that ticks the boxes. It's the right space. All the boxes, all the boxes, and it takes time. I don't know how people are opening these studios so quickly. I think of how many I discount. And then your point about opening profitably is really interesting. I opened my third studio working underneath you. We opened with memberships, it was profitable. We did exactly, you know, this might sound crazy to people, it can be done. Yeah, I also think when you work with you, and we'll talk a bit more about your how how you work with clients, but often changes get you ask people to make changes. And of course, it just feels, I remember I started, I feel so grateful that I, I mean, I'd like I've always said to you, I'd followed your podcast for a long time, I'd watch things, but it was COVID, I had time. I went and did one of your free trainings, and then I was able to reopen my studio that had had only opened for two days, yeah, closed because of COVID, but I was able to open it with this methodology in mind. Yeah. Which was much easier, I think, than if I had tried to unpick it before. You must have come across that all the time.

SPEAKER_01

Well, I mean, think about this from a simple thing. If somebody comes to you, and I don't want to use the term broken, I'm using that kind of loosely, but if someone comes to you somewhat broken in body, how much longer does it take to someone who comes to you completely healthy? Like, you know, I I have a I'm a mom of an athlete, okay, 17 years old, and you know, we've had this conversation with him a lot because I'm like the foundation you're setting for your body of everything you're doing. Yes, he does Pilates, and I'm very proud of him on this one from listening to his mama, but that foundation is so much easier. And I think, you know, when you set things up right in the beginning, you never have to untangle them. Untangling isn't easy. And so if you can do it right, we knew that opening profitably was the number one biggest indicator of being highly profitable at three years, five years, and 10 years. That would tell you that if you're gonna open a new studio, that needs to be part of your focus. And speaking of the studios that are popping up left and right, you know, I had um breakfast earlier today with a good friend who owns close to a dozen uh Pilates studios here in Orange County and San Diego County. And we were having that conversation of like just the proliferation of studios that is coming absolutely everywhere. And what you realize really quickly is most people aren't doing the work. Most people have studios that are set up for some level of failure. And the moment the boat is rocked, and the boat can be rocked unlikely again, but yes, by a pandemic, it can be rocked by economic change, it can be rocked by uh if you're really dependent on an aggregator like ClassPass or Urban Sports Club, it can be rocked by them changing their contracts. It can be rocked by a team member leaving, somebody else opening another studio down the street. You have to build a business that I think no one wants to come in and compete against you. It's competition proof to some degree, but it's also the model is so stable that that these situational things that come from outside of it don't impact you at all. And that's something, by the way, that I think that can be done at any point. It's a little harder when you're not doing it at the beginning, but I don't want to discount that you can have a 10-year-old Pilates studio or a 15-year-old Pilates studio. We're seeing a lot of these of people who were like, I was wildly successful for 18 years. Why am I suddenly not as successful and I was? And it's changed.

SPEAKER_00

Yeah.

SPEAKER_01

The consumers changed, the game that you're playing by, the ways that you market have changed dramatically. They're only going to keep changing more dramatically and moving on ahead. All of these things have shifted and changed. And that has left us with an ability to say, hey, it's time that we evolve what the Pilates Studio looks like, going from 20 years to 10 years to even five years ago.

SPEAKER_00

I mean, I imagine when you opened Studio Grow 10 years ago, you were leaning into a lot of what you'd learn running your studios. That's all it was, is and what were the things that you know you really that you took on board with that and sort of started off as a model? And how has that shifted over time? And has it shifted? Is it still essentially the same?

SPEAKER_01

No, no. I mean, there's there's obviously there's a there's some core business principles that have stayed the same. And prior to starting Studio Grow, we had had probably 200 studio owners come through our doors over like a five-year period. And I was just like, you can come in, you can sit for a day with our managers. And at one point, my primary manager called and she was like, I cannot do this anymore. Like, I have a job. So they were just coming to your studio so. They were just like coming to spend the day, hang out, look at this. I know it was like the best deal ever, but I was like, Yes, of course. I we had something really special. We were highly profitable, we had incredible retention. By the time I don't know, 2013 had rolled around, I was working five hours a week at a seven-figure year paycheck. Like I had all the things that like people are like, oh my gosh, that sounds like you just are like saying really big things. But that's really what I had built. It didn't happen overnight, but it had been built that way. And I felt like there were systems that we had done that were really unique. And when we finally pulled the plug and said, Hey, I'm sorry, we're not gonna take anyone into our studio anymore out of respect for our managers. I had a guy get really feisty with me. And that's how Studio Grow was born. He's like, You have a business. And I was like, Oh my God, I do have a business. But I think, you know, when we started, the first thing that we realized that was missing in Pilates that we had done for years was memberships. We do memberships not only for group uh programming, but we've done it for privates since 2009 in our studios. I remember our first few private Pilates clients because a lot of our initial clients were private-based Pilates studios that had smaller, small group equipment classes, that I'd look at one after the other and I was like, you can do so much more with this. Like your clients that are on your schedule three times a week are actually only coming like 95 times a year because they travel and they do this and they're not rescheduling all of those and you're burning up your biggest hours, you're doing all of these things. The second thing that I think we recognized is that no one was selling. And it was like sales was a very dirty word that people were like, oh, if they want to buy something, they'll buy something. And I was like, Well, are you really telling them what they should buy? Are you really like walking them through and saying, hey, this is your plan? Like people tend to come to Pilates Studios with some very core desires about their body. Maybe it's injury, uh, recovery, maybe it's uh gaining strength, core stability. It might be because of certain type of athletics from dance to boxing and everything in between. But like, are you really telling them what they should do with this? Are you educating them on this process? And so those were two of the things that early on, I was like, whoa, and and basic operational processes of how did you make sure you are not the bottleneck? How did you make sure you were not sitting at the center of your studio all of the time? Those are things that I will say they've evolved, but at their core, there's some very strong similarities of what we've always done because it's performed so well. We've done it with thousands of studios. We know that these systems work. Where I think we've evolved enormously is I think operationally and how we look at org charts has has evolved quite a bit. How we view, how we onboard and train people and how we build career paths for people. I think we had we had core tenets of that, but that has evolved. Marketing and the way we we communicate with our customers has evolved dramatically. I mean, the the single biggest difference between when I started Studio Growing Today is, you know, how we access and and draw in and attract clients is very different than we did 10 years ago. I I tell people all the time, maybe it's 2026, not that long ago, when Meta was still Facebook, I had to mail them checks for my uh my ads. And that wasn't much more than 10 years ago.

SPEAKER_00

Wow, yeah. It's crazy. Talk me through then. I mean, you mentioned memberships, and I think that is an interesting model, isn't it, around memberships. Is that something that you feel is at the core of what you're working with people at? Do you have studios that just don't want to do it? Because the membership model really changed my life because not starting the month at zero. It's radically is radical. And to have yeah, I used to look at my numbers and I there was it made no rhyme nor reason. You know, there was no the ebbs and flow of the months were actually very different because of course it depended when someone had to buy a tempack. It didn't, it was nothing to do with how busy we were. No, and people oftentimes didn't get the results they were looking for. No, and I think as you said, that ability to work with your clients on their goals, they're not buying a membership from us, they're making that commitment to themselves. Totally. And you know, it's helping them guide them on the right path for that.

SPEAKER_01

Yeah, I so I think a couple of things. The classic type of membership works, which is like your build every month, works for about 90% of studios. For about 10% of studios, there's some quirks that you can you can look at. Like I have some studios that a great example of this is in Switzerland and also in Saudi, the UAE, a number of places in the Middle East where we have a significant amount of expats where um we treat memberships almost on a quarterly basis, but so many people are gone for the summer holidays and they're gone, they've gone back to wherever they are originally from. And so we've made some choices on this. So we may do um memberships that renew in in three-month periods or four-month periods in those places. For private memberships, we have a variety of different ways that we we tackle and adapt. Some people are like, whoa, I want to have you know everything set up to renew, you know, to be on an annual term. So in other words, where you're paying monthly, but but you're committed for a year, and other people are willing to say private Plotties sometimes comes in for acute care, meaning somebody's got something where they really need to see someone a lot more often, oftentimes injury-based or because of something like that. And then we're going to settle into a slightly lower amount of sessions on a rhythm. And so we set up some studios that way where there's an acute care and a maintenance phase of their uh of their tenure with a private student. So I feel like, you know, when it comes down to memberships, do I think they're critical? I think some type of recurring revenue is critical, in large part because if you ever want to sell your studio or you ever want to use it as collateral, a bank for your buyer, a bank who's gonna look at you to do a loan as collateral, the one of the first questions or first things they're gonna look at is what are your accounts receivable? That's the monies that are owed to you under contract. If you're selling only month-to-month membership or 10 class packs, your accounts receivable is essentially zero. And that is something that I think is a very dangerous thing as someone who's exited a number of businesses that's that's done this very successfully, like that would be immediately the first thing I would put into place. I also think it's just very stabilizing. If you know and you can project and you can predict that I've got 120 members, then I have 140 members, then I have 180 members, I can look at my team and say, this is when Katie goes from teaching 10 hours a week to teaching 20 hours a week. This is when I really need Susan to come full-time with me. This is when I need to hire three more people. And a lot of the issues that I see with people where in the Pilates industry, where they're like, I need to frantically hire, but I can't actually get someone who's certified. It solves this because you have a runway. And so I think the financial side of it is amazing, but the peace of mind and the ability to work with your team, your clients. You just have choice.

SPEAKER_00

As a studio owner, you have choices and it just totally changed the way that we work. Absolutely. You're working with studios literally across the world. And I know that you are, you know, big in this world in terms of the research that's out there and the statistics that are out there. Am I right in saying that a good chunk of Pilates studios are unprofitable?

SPEAKER_01

Yes. We use the idea of sustainable profitability. For us, that is about 30%. If you look at some other studies, they'll use the term t uh use 20% as the metric on this. We say that about one in 10 studios are sitting at a 30% profitability or higher on this. I saw a recent study that looked at the 20% and they said it was like 17% of studios. Either of these is not good. We're talking about one in 10 or, you know, roughly, you know, one in six. There are some massive opportunities, but it's clear that a lot of people have built studios without recognizing what is the model that has to come with the modality. I think we're all passionate about Pilates. I have a family that all does Pilates. This is something that I feel like in some ways I live and breathe. I'm passionate about it. But passion doesn't equate to profits. And that is a very, very hard conversation to have. And I think, especially as we're sitting in the midst of a boom right now in Pilates, a lot of people are saying it's just easy to have a profitable studio. It's easy to have a studio that makes money. And the reality is, is that we probably have more people and interest in Pilates than ever before, but that doesn't equate to long-term success. And the number of studios that are reaching out to us in the Pilates world that had a really good first six months or had a really good first eight months. And all of a sudden another new studio opened and everyone went push right away. They haven't built a sustainable business. And that's very, that's very different. It's very painful, painful to watch from the outside to be like, whoa, this could have been done so differently. What do you think are the profit leaks? Well, I think first and foremost on this, we are not very good at projecting where we need to be and understanding like what we really need to sell. And so, first of all, if you don't have memberships, that's gonna make it insanely difficult because you're gonna be selling all the time every single month. So I'm gonna go ahead and say that that is that is a profit leak unto itself. The second biggest profit leak is we see that people are all over the place with their numbers or the metrics. And if you're looking at your numbers and you're like, I have no idea what I should be doing, you're not gonna be heading towards those goals. So when I look at studios, we have a minimum of a 12-month projections that are very clearly laid out. In some cases, we have three years for studios that are rapidly growing that we're like, okay, you know, not only is this studio's growth trajectory for three years, but the entire organization, you know, if you've got multiple studios, you know, are we going to be adding two studios in 2026? Are we going to be adding three studios in 2027? Or where are we going to be placing those studios? So starting to really move forward and like living and breathing by those numbers, it doesn't sound sexy. And I have to admit, like early on, I was probably the worst person on this because I like to look at numbers, but I did not like to pull all of the numbers and put them into pretty things. That is something you really want to invest in paying someone to do if you're not naturally inclined towards this. Because those numbers are going to tell a story. And so really being willing to go deep and make decisions off of them is in my mind, it's a gap that I see.

SPEAKER_00

Um, the sales process and sales system. There's not many studios, I think, who are doing that until they understand it, you know. Yeah, 100%. I'm here on this podcast tour with Rachel, our studio manager. We've got a team under her, you know, it's that was the biggest shift for me. 100%. I couldn't be the person who ran the central team. There needs to be a central team.

SPEAKER_01

100%. And I I think, you know, understanding your labor model as a Pilates studio, how it's gonna scale, how it's gonna keep you profitable, labor is going to be the most expensive thing you do. I love my people. They're where I spend the most money on. And so I've got to be very mindful of what that looks like. And so really understanding your labor model, how it's gonna grow, how it's going to scale. Even with me at Studio Grow, like I bring in people to look at my labor model. I bring in people to look at how I'm paying people, what we're gonna look like not now, but three years from now. Like, I've never been at that place before. And I need somebody much smarter to me. Like, you know, where can our directors go to? It's the same thing in your studio. Like, you need somebody to really be able to look in and say, this is my organizational chart today, this is my org chart in two years, three years, five years, and it's all based on the projections of where you're going. But there are there are a million gaps, but those are some of the core ones. I normally hear that marketing is people's biggest gap. Normally, sales is a bigger problem than marketing. Like people have surprisingly more leads than they would expect. Yeah, but it's how you convert them. It's 100%.

SPEAKER_00

I know a big part of, you know, when you come and work with Studio Grow, I always think it's like the comprehensive training of being a studio owner. You know, it's the same kind of thing. I feel like I've actually was working with one of uh an education provider, and I was saying, you know, you need to be in your CPD courses that you put on every year. There needs to be something from someone like yourself who comes in at least, you know, because we're going out there, we're, you know, we've hopefully gained a really good certification in Pilates and then we're left kind of running the studio. But you know, you're looking at your processes, your systems, you get the best spreadsheets. I mean, I remember my accountant querying when I first signed up for you, how have you how much money have you spent? I remember the first day she saw the spreadsheet, she was like, Who created the spreadsheet? I said studio growers, it's worth every penny. This is amazing. And I think it's so interesting because I used to look at my income. Yeah, and that was it. Now, I mean, you know, the because I was going to ask you, like, what things you measure on a show should see how many lines are on these spreadsheets of what you measure. We almost always hit our goals, but there's always somewhere in the numbers that could be better, and that's allowed us to keep growing and be like, right, let's look at this, let's look at this. It might be something in the sales team, it might be something in the teaching team, it might be something that just completely confuses us, and we're like, let's try and figure out why is this not working? And that's really powerful. The other big piece that we work with with you, and I know that you do, is around pricing. There is an pricing. Do you see studios come on board and their pricing is undervalued?

SPEAKER_01

I would say that about 95% of studios' pricing is undervalued. 4% of some things that are probably certain things are overpriced on this, and about 1% of studios gets it right. I mean, we've priced about 5,600 studios in 48 countries at this point. I'm passionate about pricing. This is my dad spent years in companies that were trying to be sold and uh and going into uh companies that had just been purchased and were looking to be developed. And he spent a lot of time on pricing. Pricing was like a conversation that we had around the dinner table as his partners would come over, as they would look at running new product lines, as they would look at evolving things. And I think, you know, I did my first year in business. We made a lot of money. I did not make a lot of profit. Welcome to all of the things that I could tell you that you can do wrong on this. And, you know, one of the things that when we realized outside of vastly overpaying our staff, who was paid better than every physician in town, the second biggest change that we made was our pricing. And I recognize that we look at pricing very differently. You know, we think about pricing holistically, not just what are your competitors charging, not just like what uh what are your current numbers, but holistically, like, where do you need to go? What is the value you offer? How are we marketing you? Uh, what tier are we placing you in? Like, there's probably 30 things that we evaluate when we look at pricing. We have an entire pricing team.

SPEAKER_00

Um, and there is an art to it when you work with this team, because I think you know, you can look at your standard pricing. Often I think what people do is they look at other people's pricing and where the other events are. That studio might be wildly unprofitable, so who knows? But then I think even when you kind of get to the okay, roughly I want to charge about this per class, if you are looking at memberships, it's there's an art to what each membership is charged at and how you tier that. 100%. Which just always blows my mind when one of your team comes on board and they just they they intricately know how to do this.

SPEAKER_01

Yeah, and and I think what you realize is especially if you're a Pilates studio that might have multiple tiers of teachers, you might have a master trainer, you might have somebody who's been teaching for 30 years, or someone who is who's senior, senior for whatever way, client experience. You might have privates and group classes. Uh, you might have people who have hybrids of privates and group classes, you may have four different locations, and one is in a much more expensive area. Like there's a million layers that comes into pricing. And where you're doing this, the right pricing almost always will add between$25,000 and$40,000, between 20, probably 20 and 30,000 pounds in a year on where this is. Just on what you're already doing. Just because psychologically it's tipped a buyer towards buying what you want them to buy. The right pricing helps somebody choose what's really probably the best option. You know, for us, this is a membership because our members tend to have the single best results. They tend to tell us it has been the single best experience. They tend to build amazing community, and yes, they tend to support our studios in the best ways possible. And so when I put someone onto a membership and my pricing tips them there, it's it's a very different experience. Your pricing also, you're gonna have pricing that will probably have very short-term options or no-term options and pricing that will have longer-term options. I do want to say to people, because I think this is really important, we get very tempted to be like, no one will want to commit to me. And by the way, that's a very deep internal bias that we likely hold as human beings of like being nervous about that. In reality, you don't really know what someone's gonna commit to. Some people are gonna be much more interested in savings, some people are gonna be much more interested in flexibility. It's very important that in your pricing, you have both of those options available to them. And that you understand if you're gonna change your pricing and you're an existing studio owner, you want to do that in the right process. Like there is a process to doing it and really seeing enormous gains as you convert your existing clients to that, because processes and systems are ultimately where we we lose most of our profits. It might be a sales system, it might be converting someone's uh pricing over. All of these things are just gaps if we try to just do it without a system that we know is actually going to work inside of our studios.

SPEAKER_00

I'd love to talk to you about the successful studios because you have plenty of those too. Yeah. Because I think sometimes in these chats, we can just focus on what do we need to be doing better. But what do you see in the successful studios that you work with and that you know? What are they doing well?

SPEAKER_01

Yeah, I I told somebody this morning our most successful Pilates studio, they have Pilates in yoga, but Pilates makes about 60% of their business, is going to do well over four million dollars in a single studio this year, which is insane. If you would have asked me like three years ago if it was possible, I would have been like, maybe. But but I think for successful studios right now, the first thing that you recognize is they know and understand their business model and they don't get distracted. And I know that that sounds like a crazy thing, but you know, once you're an entrepreneur, I think it's easy to see all kinds of shiny pennies and want to pick them up and go deep into them. And so our most successful studio owners recognize that they're committed to at least the next year, but potentially the next two years, to the road that they're on. They're not looking for all these other things. They're just trying to get better and better and better as they're doing it. You do not need a million studios. I think we have about 50 studios or 60 studios that are doing more than$2 million in a single studio. Recognize and know that at this point that that's possible. A lot of them are Pilates studios. A lot of our most successful studios, if they are a large group studio, so like they're they're at 15, 20, 30 locations, they've been built really thoughtfully and they've got a model and a blueprint that they're sticking to. Like they're not trying to be McDonald's because I don't want to really bring McDonald's into Pilates, but but they are thinking like we we lease between, you know, I don't know, 150 and and 200 square meters. We won't pay more than X amount per square meter per square foot. We won't open in select markets, like a college market on certain months of a year. Like, like they get very good at saying there is a bit of a formula, and we are willing to say that that a lot of rules can be broken and it can be evolved, but not every rule can. If I look at the individual studios that are really doing some real cool evolutions of this, I feel like the biggest ones are saying, how do I maximize the depth of experience? So, you know, we've noticed in the last five years that that studios offering privates have dropped precipitously. Like now we say 75% of studios, you know, don't have private Pilates in them anymore, which to me was at a very core of things that we did. We started as a private studio. And so when I see this, I think it's very critical that you're willing to say, like, I'm going to do a lot of things. I'm going to take people on a journey that might start with them walking in a reformer class, but might end with them coming to privates three times a week. Maybe it takes them through teacher training. They understand their product stack and the journey of clients going to be on that could take them to Los Angeles. It could take them on a retreat. You've done very well with retreats. I mean, like, these are things where you start to evolve and say, like, what are the business and where can I make money inside of my studio's walls? And where do I make money outside of it?

SPEAKER_00

I think that that's something that you really worked with me on is how do you make the most of what you've already got? It's 100%. That's all it really comes down to. You were the one who really supported me with launching teacher training because as you said before, we were already training teachers who were coming and trained. And it's been great. You know, it solved a problem for us. It's actually turned out to be something I'm really passionate about. I'm now going to be running the teacher trainings in other studios and kind of expanding beyond. And, you know, I've that's been interesting for me. So now I feel like, oh, I can kind of grow my business without another bricks and mortar, which you know has its challenges of managing. And yeah, you know, it was fundamentally born out of a problem that I needed really good teachers. We'd set the bar so high. But I was training everybody anyway, and now we get paid to do it. And I'm passionate about putting those kind of teachers out in the world, even if they do go and teach elsewhere. But you know, it is, it's like looking at how can each client come in and spend more on things that are gonna help them that actually benefit them.

SPEAKER_01

Exactly. Yeah, I mean, I think on this, your business can be maximized enormously. Most Pilates studios can do two or three million dollars a year in revenue. I mean, that that's a factual statement. You might wind up getting a satellite location to do it, or you might wind up breaking down a wall. But it's jarring when I say that to people because so oftentimes they're like, that's ridiculous. And I think we've set the bar too low for what our studios can do. Your studio can be wildly successful. I you've met Leslie Parker, and Leslie's a great example of this. I mean, her studio is killing it in Toronto. Um, her studio is in what was a live work loft. Half of it used to be her apartment, half of it was her studio. And it's gone from being a single room studio to two classrooms, three private rooms, and now I'm like, go find your next space that's going to be this. She's grown into a multi-million dollar year studio before she ever had to go find another space, add more rent, add more operating expenses, and do all of those things. So a lot of this is about also saying, like, this is what I already have. How do I maximize that? Like, I maximize it through my products act, I maximize it through how I charge, I maximize it through uh the times of day I see people, I maximize it through things that don't even happen inside of my studio. All of those are things that can grow things much bigger and much more thoughtfully. Because I think it's thoughtfully is the key thing than you ever imagined.

SPEAKER_00

What trends are you seeing globally in the world of boutique fitness and I suppose specifically Pilates? Because you you were in this privileged position to be in that many countries. You're seeing a lot of data, and like, how is that? What's that telling you?

SPEAKER_01

So around the world, consumers are using boutique fitness, including Pilates, differently. Now, that's not true of all types of Pilates. I'm going to use all types of Pilates very loosely. A lot of people will hate me for doing this. When I think about all types of Pilates, I think, you know, contemporary, classical, and I'm gonna say fringe things like Legris, who probably wouldn't necessarily call this Pilates, but there's some overlap in that style that it yields off of the Pilates reformer. With the exception of Legris, we know that class usage has gone down for most studios. If we would have looked and said overall in Boutique Fitness pre-pandemic, people came like 2.8 times a week. Now they come a little less than two times. In fact, some of the most recent data from Mariana Tech says it might even be lower than that. We might even be looking more at like 1.5 or 1.4 times a week that people are coming. They're shifting how they're using our studios, and we haven't necessarily shifted that mindset of how we're gonna work with a consumer whom we might only see once or twice a week. That might change how we're we're dealing with memberships. It might change how we're speaking to them, how we're encouraging them in the way that they're working out elsewhere. It's gonna change how we meet people.

SPEAKER_00

Why do you think they're coming less? Is it because they're going elsewhere or is it fine? Yeah, they are going elsewhere. They're doing more of a mix. Well, two things.

SPEAKER_01

They're doing something else with that time. I do think that the aggregator situation, so the class passes and urban sports clubs of the world. Yeah, they do kind of lend, don't they, to people going to try lots of things. And they've trained people to think that that's very normal. That I go to my Pilates studio on Monday night, I go to my yoga studio on Tuesday night. I think some of it is also that we follow great teachers. And if you have uh an an average teaching staff, something that we've seen is a trend that I don't like that's happening in Pilates right now, that I think that that is a major reason that they're going to the great instructors and there's just fewer of them. That's another reason why they're going. But the second thing is post-pandemic, people are a lot more aware of how much time they have. They're looking for the biggest bang for their time buck. Like, you know, they're trying to do this. The second trend that we are seeing is we're seeing a decline in the overall quality of what people are getting. And I'll specifically speak to Pilates. So when we were in LA together, this would have been about, I don't know, 20 months ago or so. I sent uh with 29 members of our team here. We took about 550 classes in a very short period of time. And the consensus was amongst Pilates Studio that the quality of instruction had declined so strongly.

SPEAKER_00

I mean, I I see that in where I am as well. Yeah. I think it's the for all that you encouraged me to run a teacher training, the problem is anybody can do that. And so and it's very difficult, you know, it's come up so many times on the podcast as a conversation. And of course, you know, someone's doing a two-day course and they think they think that counting is teaching.

SPEAKER_01

Yeah. And it's a challenge, isn't it? And we're tracking it in consumer data where customers are coming back and when we're serving them, they're saying that there's an issue. In terms of unique things, we're seeing some some budding offshoots of Pilates or or new ways of adapting. Heat coming into Pilates, you know, heated matte Pilates is is something that has become wildly popular. We're opening an insane studio in Miami right now that I mean, I think is going to really set new boundaries for where that goes and is going to drive even more. But Hot Yoga has been uh driving ahead. Yoga is a$107.1 billion a year industry. I mean, it's a massive deal. So when you see this, you can see the opportunity of this that he is a piece of equipment. You've got some new trends of niching down. I mean, I was just with uh Deborah Strogo and her husband Eric, and we were talking about a studio that we've worked with in the past that does a lot of personal training and Pilates and things that are focused on neurological conditions. You know, so things like Parkinson's and people who are recovering from strokes and MS and a million things. Likewise, studios that are focusing deeply into menopause, looking at the trends on where this is. I mean, every person that's grown up with Pilates that's suddenly hitting perimenopause between, you know, I don't know, 35 and 45 years old is like, wait, everything, everything's changed. Help me through this. And so we're seeing studios that are just choosing niches that I think, you know, if we look ahead, I still think there's plenty of room to have reformer studios and private studios and all of these things. But I suspect somewhere between 2028 and 2033, we're gonna see this massive rise in niche-based Pilates studios. And I think they're gonna crush it. Their marketing is gonna be so cheap, their clients are gonna be flooding through the door because it's so specific to them. I think that that's a trend that we're gonna see all over the world. Interesting. And then I do think outside of the US, certain things that we've really encouraged from a business perspective have been things that people were like like like memberships. In the UK, you know, if I if I look through, I I've worked with lots of clients that are sitting in city halls or town centers in community centers and things of the like. And we've already seen a shift there that people are saying, no, I'm gonna, I'm gonna build independent studios, I'm gonna go in this path outside of London, who was all where they were always happening on this. But we're seeing a shift where where people five years ago were saying to us, no one would ever buy a membership, they've no one, they've never heard of it. And now it's been a radical difference. It suddenly people are coming back and they're like, actually, I had 200 members. Yeah. And no one batted an eye.

SPEAKER_00

No one bats an eye. And it's it is incredible. I mean, I remember when I did it, you know, you're kind of going, no one's gonna buy this. I tried sell memberships before, but when you've got the process, Lisi, we're a little pushed for time because we are Yes, we're we're heading to an event tonight. We are heading to an event tonight, so you kindly squeeze us in. I want to finish though, because we always end with some quick, quickish fire questions. Yeah. One thing studio owners worry about too much.

SPEAKER_01

How many certifications they have and if their certifications um or they think their certifications are going to get them more clients, that is factually inaccurate. One number every studio owner should know weekly. You should know uh your cancellations to new memberships, and you should be tracking your average client monthly value monthly, not necessarily weekly, but we're tracking that that very hard. Biggest mindset shift that unlocks profitability. Seeing this as a business and an asset, not just a business, but an asset that's going to really change your life.

SPEAKER_00

One habit that separates struggling owners from thriving ones. Accountability to themselves. And what excites you most about the future of Pilates Studios?

SPEAKER_01

I think we're only getting started. I was lucky to find this in my early 20s. I think I'm very different in my early 40s because of this. I feel like we sit at a precipice of really changing the world around us. And I mean that really sincerely. Like I've seen the people that have come in and done this. And so the fact that we're only getting started.

SPEAKER_00

Gives me a lot of heart. Lisi, if people want to work with you, you've obviously got your studio grow platform. Do you still do kind of little shorter free things online? Which by the way are so good. You learn so much from them. My God, if you saw how much time we put into it, yes. So I think even if you're not ready, you know, if you kind of want to dip your toe in it, it's worth it's you know, I definitely did that and sort of testing it out. Because I think I I have a lot, I get a lot of people. I'm probably gonna get more people now after doing this contacting me and they want to talk about, you know, they're thinking of signing up. And you know, that it can feel like a big financial commitment. It is. And I talk to them really honestly about the kind of mindset you need to be in and what it's about. But it's it's nice for people to, you know, you've got your podcast, you share so much knowledge on there, you do these free trainings. Like there's lots of stuff you put out there for free.

SPEAKER_01

I mean, please, so like our podcast team includes two fabulous Brits on it Alina Cooper and Heather Garrick, that are amazing, but we have a podcast team of eight. You know, podcast is amazing, our trainings are incredible. We are prepping one right now that's gonna be specifically addressing the aggregator situation because we are we're seeing so many issues between class past Urban Sports Club, Well Hub, and the beyond. And those are things we're really committed to putting out. We put out a lot of data and information. So you we're always, if you're you're scrolling Instagram and you see this, download those. They're full of details. We have a two-member team that that's their full-time job. Studio Grove has 71 team members. Wow, it's amazing. It's terrifying. Oh my gosh, we're supposed to end the year with like 95, and I'm like, so I mean, we're we're pulling a lot together so that studio owners, whether they're our paid clients or whether they're along for the ride with us, where they've got the things that they need at their fingertips. Yeah. So join us in any way on that.

SPEAKER_00

Well, thank you for squeezing me in. We're gonna go to an event now. It's so nice to have you here, Lisi. Thank you so much. A huge thank you to Lisi for taking the time to have this conversation with me. As I mentioned at the beginning, Lisi has been a really big part of my studio owner journey. And it was incredibly special to be able to sit down and hopefully allow her to share some of her knowledge with you. So I hope that you got something out of this. It's been so great to have these conversations, build this relationship with you, whether we're talking about stuff to do with our teaching, stuff to do with the business, the challenges that go along with this work. It's been great to hear that and hear other people's stories and perspectives on that too, including Lisi's. So thank you so much for being here, and I will see you next time for another episode of Beyond the Reformer.