Average Revenue Per Visit is a value needed to drive calculations in the Profitability section of the Instructor Performance Report.
Definition
An ARPV value is the blended rate a business earns when a client comes in for a session, regardless of which package they are using
Description
A single numeric value that may fluctuate over time - derived from a formula that looks at total revenue divided by total visits.
Example: $10,000 in revenue / 800 visits = $12.50 ARPV
Details
Notably, the formula factors in zero-value pricing options (comps), direct revenue earned from drop-in visits, class cards and unlimited memberships, along side third party revenue such as Classpass, Groupon or other resellers. We break down these 4 categories:
Unlimited Memberships
Zero-Value Pricing Options (comps)
Class Cards and Packages
Third Party Revenue
Unlimited Memberships
For clients with unlimited memberships, their total visit count must be divided by the revenue earned for the time period in order to determine their specific ARPV value.
For example, if the studio was seeing 100 clients with an average visit count of 8 times per month, who are paying $100 each, total revenue for the period would equal $10,000 and total visit count would equal 800, which would produce a blended ARPV of $12.50.
Total Revenue = $10,000
Total Visits = 800
ARPV = $12.50
Zero-Value Pricing Options (Comps)
Zero-value pricing options, or comps, are important to factor into a studio-wide ARV value. Since the business has an expenditure associated with the visit, comps will drive the ARPV lower.
For example if a studio has 200 comp visits during a time period, the revenue total would be $0 and the ARPV would be $0. However, it's important to factor in the visit count:
Total Revenue = $0
Total Visits = 200
ARPV = $0
Single Classes, Class Cards/Packages
Drop-in classes, class cards, punch cards and other quantity based pricing options are the easiest to calculate and factor in to a studio-wide ARPV. For example:
Single class priced at $20 would have an ARPV of $20
10 Class Card priced at $150 would have an ARVP of $15
50 Class Card priced at $500 would have an ARPV of $10
When compiled, total revenue earned for the period can be divided by the number of classes taken for a blended class card ARPV value. For example:
10 Single Classes Used at $20 = $200
20 Classes (from 10 class cards) Used: 20 x $15 = $300
40 Classes (from a 50 class cards) Used: 40 x $10 = $400
Total Revenue = $900
Total Visits = 70
ARPV = $12.85
Third Party Revenue
Income and classes from third parties such as Classpass, Groupon, FitReserve, Dibs and other aggregators is typically recognized as a Comp in reservation management systems.
In order to accurately correlate the quantity of visits during a time period with the actual value of the third party package, we need to know it's value, and ask you to enter it. For example:
Classpass payout value: $9/visit x 100 visits = $900
Groupon payout value: $11/visit x 150 visits = $1,650
FitReserve payout value: $15/visit x 20 visits = $300
Total Revenue = $2,850
Total Visits = 270
ARPV = $10.55
Final ARPV Calculation
Unlimited Memberships
Revenue: $10,000
Visits: 800
ARPV: $12.50Zero-Value Pricing Options (comps)
Revenue: $0
Visits: 200
ARPV: $0Class Cards & Packages
Revenue: $900
Visits: 70
ARPV: $12.85Third Party Revenue
Revenue: $2,850
Visits: 270
ARPV: $10.55
Total Revenue: $13,750
Total Visits: 1,340
Blended ARPV: $10.26