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:
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 firstname.lastname@example.org.