It’s time to raise your prices. Yes, I said raise your prices. If you are like most club owners in this industry, you are fighting the same battle that many other club owners are fighting: Big franchises have come into your town and are selling memberships for $19.99 per month or even less. You may think, “This stinks. It’s not fair. They can’t do that.” Well, they can, they will and they won’t stop until your doors are shut. So stop whining and raise your prices.
The way most club owners are handling this situation is to lower their prices to try to compete with the lower-priced facilities. But I urge you to refrain from following suit. Why? For two reasons. First, I can almost guarantee that you do not have the financial backing that these facilities have or the marketing support. They can last longer than you, and when you have to shut your doors because you could not pay your loans and payroll after lowering your rates, these low-priced clubs will gladly welcome your old members.
The other reason is that lowering your prices devalues your club. How does this look to your long-time member, Joe, who has been paying $49.99 per month for the past five years. If you lower his rate to $19.99 per month when he renews, you might as well smack Joe in the face. You have insulted him. You have been overcharging him for the past five years. How long do you think it will take before all your members are mad at you for overcharging them for years? You should never lower your prices—you should only raise them.
Many gym owners get scared when a big competitor comes to town. During the past two years, I have had two low-priced facilities come into my town. My response was to raise my prices because I knew that having facilities like these in my area would allow my club to shine.
Here are my three tips for how to outshine these competitors:
- Hire correctly. I cannot stress this enough. Most of the time, low-budget clubs are staffed with minimum-wage employees who are there to collect a paycheck. Fitness is not their career or their passion. Make sure you hire people in the industry and pay them $2 more per hour than any other club is paying in your area. Paying them more will help with staff retention, and you will be able to hire a more qualified employee. No member wants to see a different person behind the front counter every other week. Remember, it is a club. These members want to feel at home when they walk in. How can they feel at home if your front desk greeter changes from week to week?
- Train and dress your staff for success. Giving staff members a T-shirt and making them read a manual is not training. If you are not role playing and going over situational scenarios every week, you are not training your staff properly. Make sure you are investing in your staff, not just your newspaper ads. How do you expect to charge $49.99 per month when your staff does not dress the part and act the part of a high-end fitness center? They should be able to handle most situations and answer almost every question that a member has. They should never have to say, “I have to ask my manager.” Staff that is trained properly helps your bottom line.
- Hire qualified personal trainers. People who hire personal trainers want the best. No one wants to say that he or she has the most cost-effective trainer in town. People who are looking for the best trainers in town are not going to the low-budget clubs to find them. They are willing to pay for results. Make sure you have trainers on staff that can provide results. When members see results, they sing your praise. That leads to new members and clients.
If it makes you nervous to raise your prices, I don’t blame you. It is scary out there in this economy. Members these days are always looking for the best deal in town. Even though the economy is bad, people are still willing to pay for great service and a good product. When people come into my club and want to price shop, I always ask them: “Would you rather eat a steak from Ruth’s Chris or Sizzler?” I know where I am going for dinner.
Nic DeCaire is the owner and founder of Fusion Fitness Center in Newark, DE. He is a graduate of Wilmington College. DeCaire is an IFPA-certified personal trainer with 12 years experience in the Newark area. He started working the front counter at a local fitness center at age 14, and his success and passion for fitness have grown since then. A former competitive bodybuilder and power lifter, DeCaire has won many awards in the sport. He is the chairman of the Main Street Mile, serves on the board of Kids with Confidence and is a member of the Newark Morning Rotary Club. DeCaire can be contacted at 302-738-4580 or [email protected].