Here'south why ClassPass just hiked its prices in Boston

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Source:   —  April 13, 2016, at 7:18 PM

Not everyone'south fitness regime is created equal. So ClassPass is introducing a new tiered pricing model in some cities.

Here'south why ClassPass just hiked its prices in Boston

Not everyone'south fitness regime is created equal. So ClassPass is introducing a new tiered pricing model in some cities.

On Wednesday, the company said it was hiking its Unlimited option in Boston to $180 per mo (existing members will pay $150). That'south the company'south standard package, which grants members unlimited classes to boutique fitness studios.

When ClassPass launched three years ago, that same option cost just $99 a month. But it'south been gradually increasing. In October, it increased prices in Boston to $119.

ClassPass is also introducing two new levels: Five classes for $65 (which will be available in all twenty-nine of its U. S. markets) or a 10-class option for $120 (available in Boston).

"We think we're going to better address the needs of different kinds of people," said Fritz Lanman, executive chairman at ClassPass.

Related: Here'south what it takes to be a ClassPass superuser

The company recently rolled out similar tiered offerings in Atlanta and Toronto, along with accompanying price increases.

The prices for unlimited packages varies in each city, but the expand is substantial -- particularly for new members. The hikes haven't been without backlash, but ClassPass said it'south seen "very little" churn as a result of the changes.

ClassPass' move comes as the tide has started to turn in Silicon Valley. Investors are increasingly focused on profits rather than the "growth at all costs" it'd encouraged previously.

Payal Kadakia, CEO and cofounder of ClassPass, told CNNMoney that the price changes are a reflection of just how well ClassPass is working.

Related: ClassPass: We're a friend, not a foe, to fitness studios

"It'south excellent that we're inspiring people to work out more, but the reality of the economics is, if you're working out double, you should probably be paying something more for that," said Kadakia, adding that usage of its Unlimited option has indeed doubled in some markets.

"With that being said, we wanted to stay accessible to all different consumers," she said. ClassPass says members have booked seventeen million classes through its platform.

For now, it's evaluating each market individually and making pricing adjustments accordingly.

ClassPass -- which has raised $84 million -- said its contracts with studios vary and wouldn't comment on whether it'll pay individual studios more as a result of price hikes. It said that it's a high studio retention rate -- ninety-six percent studios stay with ClassPass after signing up.

It's also presently letting members purchase studio classes on ClassPass' website when they hit their studio or package limit. Members can purchase these classes at a discounted, determined by studios.

"They still have spots that are going unfilled," added Lanman. "We're helping them create more money."

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