Home » Customer Value in Pricing Strategy » A cycling studio switched from a pay-by-class fee structure to a pre-paid pass with 5, 10 or 20 classes. Why might customers prefer the pre-paid passes?

A cycling studio switched from a pay-by-class fee structure to a pre-paid pass with 5, 10 or 20 classes. Why might customers prefer the pre-paid passes?

Customers will most likely not prefer the pre-paid passes because they’ll get less psychological benefit from their consumption experience.

Pre-paid options give customers the option to pay with cash.

The customers can now pay for classes in advance and then focus on enjoying their classes rather than conducting a financial transaction each time they visit the studio.

The customers can now base their purchase decision solely on economic rather than psychological outcomes.

Customers will prefer to pay for a large chunk of classes at once, because it will separate the payment pain and improve their consumption experience.