Bob and Jolyn Esquerre are business solutions consultants and co-owners of the Esquerre Fitness Group (EFG). EFG is known for training trainers, group exercise instructors and managers. It has challenged the fitness industry to provide exceptional service to members. Recognized as subject-matter experts in personal training, program development, club branding, management development, customer relationship management and membership retention, Bob and Jolyn’s total focus is to create customized business solutions for their customers. You can reach the Esquerres at esquerre1@aol.com.
Lately, we have heard the following comments or have been drawn into discussions about these comments:
1. I don't think I can get away with charging more money for my group training program because the club is already charging $10 per person/per class.
2. I don't want to spend money to launch the group training program because we do not have the money in the budget.
3. We have to cancel some fee-based group training classes because the attendance is dropping.
4. My group training program will not be successful. My trainers refuse to support the concept because there isn't enough money in it for them.
5. How do I know that my members will pay for group training programs?
6. I do not know how to distinguish a fee-based group training program from our group exercise classes which are free.
Who are the individuals who are making these statements? Club owners, corporate executives, club fitness managers and fitness professionals.
Each of these comments have a common and consistent thread: The commentators have a poor understanding or lack of appreciation for how to do one or more of the following:
1. Define and manage the member experience.
2. Continually optimize (i.e. reinvent) the member experience.
3. Create and manage programming value.
4. Launch a new value-added program and add value to existing programs.
5. Stimulate consumer demand.
6. Correlate value and price.
7. Coach their employees on how to manage the member experience.
8. Appreciate that club members are really educated consumers who will respond in a positive, receptive manner if, and only if, value is truly embedded in a new fee-based program.
9. Appreciate the need to incentivize their fitness professionals to make fee-based programs successful.
What determines the right price for group training? The "v" word—value. Several theories exist about how to determine value. The subjective theory of value is an economic theory that states that to possess value, an object or service must be useful and scarce. The extent of that value depends on the ability of an object or service to satisfy the wants and/or needs of any given individual. If the service is wanted, it has value. A service can be wanted, if we can guarantee specific but very different outcomes. If we create value in the eyes of the educated consumer, they will want it. If we make the service scarce enough or hard to find, the service becomes valuable. They will want the service.
The following are some components of value:
1. The program must be extremely different and unique.
2. The program must have specific and distinct goals and objectives.
3. The fitness professionals who deliver these programs must believe that they can deliver an enhanced type of value with unique results and/or outcomes.
4. The program must use different equipment that is not available in traditional non-fee-based classes.
5. The program must be delivered by specialists. After they have obtained specialized training, they will be positioned as professional fitness coaches and not instructors or trainers.
6. The schedule must be strategically limited and restricted to stimulate demand.
Once the value proposition is established for the group training program, the price must be set. In some circles, clubs examine what other clubs and/or their competitors are charging for similar services. However, if your program is unique enough, you must determine and control the price points.
Consider the following nine points to determine the value/price relationship for your group training program. What are your price points for your current personal training programs? What is your current payout to your personal trainers? What is your net income from your current personal training programs? What is your current pay structure for your group exercise instructors? What are your costs associated with launching your group training program? What are the skill sets of your group training coaches? How much will your incentive bonus be for your group training coaches? How many sessions will be in each group training program? How many fee-based group training sessions will be scheduled per week?
The benefits of a successfully priced group training program include the following 10 points at a minimum:
1. Strengthen the club's brand (i.e. the club's value proposition).
2. Strengthen the club's competitive points of difference.
3. Reinforce the club's customer relationship program.
4. Increase the club's gross income.
5. Add a higher profit margin to the club (i.e. increase in net income).
6. Lower the club member attrition rate and raise the retention rate.
7. Create higher referral rates from more satisfied members.
8. Generate an increased club income per member.
9. Increase the percentage of non-dues revenue.
10. Increase the synergy of all club programs.
Are your current group training programs working for you? If you want a copy of a sample of a priced group training program that reflects these concepts, please contact us at esquerre1@aol.com.