The 9 Ways to Fail with Your Fitness Club Pricing Strategy
Far and away the biggest error that I see working with struggling operators is that quite simply they don’t charge enough!
They desperately yearn to run great clubs but can’t afford the staff to deliver it because of a lack of profits.
The lack of cash affects the power and intensity of their promotional push and to compensate to get more traffic they are forced to reduce the discounted offers even further to almost bankruptcy levels.
It’s a vicious spiral with no winners as members leave in ever increasing numbers disappointed with the underfunded and lacklustre Club experience.
Here are the 9 ways that you get into this mess.
Note them, learn the lessons and steer well clear of these landmines.
Firstly, never ever price by Industry norms.
Too many clubs price based on what their competition are doing.
Just look at any other sector of commerce you care too. Cars, Shops, restaurants, hotels, they all charge different amounts for patronage. The other thing to remember is that there was once upon a time, a pioneer who determined the original price band.
Over the last 10 years it was the major chains such as Fitness First and LA fitness. Whatever happened to those groups? Administration. The place you go when your model is flawed!
Back in the day aerobics cost £2 per class.
Then along came “Step” and companies made us buy plastic podiums for £70 each!!!!
We reacted as an industry by raising the class price to £4 for Step.
We had a boom on our hands.
We doubled the price and trebled our traffic.
Price increases didn’t hurt the business.
It helped it by providing enough revenue to buy more steps.
Imagine if the pioneer of pricing in our industry had been Barry’s Boot Camp (membership £250 per month), Soul Cycle (£20 per class), Body doctor Fitness (£1800 for 6 weeks) or Fit Start ( £399 per month), I wonder how much the average high street gym would be charging now?
My advice remains don’t worry unduly about your competitions lower pricing.
They’re undoubtedly struggling like crazy and as soon as you come out with a price hike, so will they!
Similarly, It’s time to dump the search for customers who buy on price.
Re-evaluate what your Club does and who its target market is. Ensure that you chase business that has the money to pay and has an appetite for what you offer. Lookout for the hungry herd.
What is the next step boom? Yoga? 12week Transformation Programmes for Obese People? 3-year Transferable Family Memberships at £2000 each for a family of Four?
Never ever second guess what your customers will afford to buy.
It’s the same clubs that worry about their overpriced memberships at under £30 pounds per month while simultaneously retailing personal training in decent chunks at £30 per hour and above!
Making sure that you differentiate is key in preventing your customers from Apples for apples comparisons. Achieve this and you’re home and dry with premium prices.
Which brings me on to my top tip of the moment for Clubs.
The triple layer, Good, Better, Best membership price offering.
Show your prospects your 3 membership options and explain the differences in them and then sit back, stay quiet and let them choose.
15% take the middle price and 5% take the higher ticket item. That’s at least a 20% increase without doing anything different!!!
Try it and then send me a gratuity.
The final things to sort when it comes to determining your price is your attitude.
If either your self-esteem is low, or your business esteem has been affected by the knocks you’ve taken then its likely you will be suffering feelings that you don’t deserve any more than you are getting right now.
For goodness sakes pull yourself together.
Ring 20 members and ask them what they love about your club, what’s it done for them and give them a voucher for something they might like.
It will make you and them feel better and give you a renewed clarity on what makes your Club special and why people should never compare you with another facility. Price accordingly.
“Of course, they are cheaper than us.
It’s that sort of club.
They don’t do this for you which we do and as we discussed you really need it…”
Finally, there is no getting away from the business maths you face. There is no point in struggling with too low prices. Nothing will ever change. You will still be clinging on to the lifeboat, not making any money, exhausted and frustrated for years to come.
Change something and upwardly move your prices.
So, to summarise, avoid these 9 and enjoy your work once again.
I hope this helps.
Contact me if there is any issue with your business that you are having issues with.
In the last 30 years there isn’t much I’ve not seen several times and I can probably help.
Why not pick up the phone and call 020 7917 2780 or get in touch via LinkedIn. Just reach out! What’s the point in continuing to suffer alone!