Thinking about raising rates?
Or maybe you know you must raise rates to stabilize your gym business.
Either way, here’s what you need to hear:
It’s OK to raise your rates.
Doing so will ensure your business stays open. That means you’ll be able to provide for your family, continue to help your clients and ensure you’re creating careers for your coaches.
Here’s something else you need to hear:
Two-Brain has an exact plan to help gym owners raise rates: It involves some basic math, checklists, timelines, downloadable resources and support from a mentor.
It’s been tested and optimized over the years, and it’s been used with great success by hundreds of gym owners. The plan works, and at most gyms, even a small rate increase will more than pay for the cost of mentorship. (Two-Brain clients: Everything you need to increase rates can be found in the Toolkit. Click here.)
Here, I’ll lay out the three key principles of rate increases.
1. Follow a Plan
When it comes to rate increases, it’s unwise to wing it and hope for the best.
The right rate-increase procedure will reduce or eliminate backlash completely and ensure your updated fees support your business.
Without a plan, here are a just few things that can happen:
- You can raise rates too much and anger clients.
- You can raise rates too little and fail to solve your cash-flow problems.
- You can get the timing wrong if you need a two- or three-step process to get the correct rates in place.
- You can fall prey to random, untested, “here’s what I did” advice that might not be sound or might not apply to your unique business.
- You can upset your staff members.
- You can lose a lot of sleep.
- You can put off an obviously needed rate increase until you’re in an emergency situation that forces you to take desperate measures.
- You can go under because you were too scared to raise your rates.
If you don’t have a solid plan, a mentor can provide one.
2. Be Worth It
Imagine your accountant is constantly over-delivering. She’s always checking in on you, sending helpful tips and resources, and spotting issues before you do.
She knows about your family and sends thoughtful gifts from time to time to show her appreciation for you. She refers great clients to your gym.
She doesn’t just crunch your numbers. She actually cares about you and your business, and it shows in everything she does.
One day, she sends you an email and mentions her rates will be going up by 8 percent. How do you react?
You probably just think, “That’s fair. I’m getting incredible value.”
Imagine you get the same rate-increase message from an accountant who’s always screwing up, filing reports late and “missing” your important emails.
When he sends you the message, you think, “I was unsatisfied before—and now I have to pay more?”
You must be like the first accountant. That means constantly building and demonstrating value. If your clients know you’re always putting them first, they won’t bat an eye at a rate increase.
Remember: A client’s experience is only as good as the last exposure. Make sure every exposure is A+ and then rest easy when you hit “send” on the rate-increase email.
3. Build Value Every Day
A price increase at the discount barn is annoying because you go there for one reason: cheap prices.
An increase at the best store in town goes mostly unnoticed because you aren’t there for low prices. You’re there for everything the business does to earn the “best in town” reputation.
Be the best: Don’t give discounts or have sales. Price fluctuations erode trust and encourage price shopping. Consistency is more important than anything else. Be confident in your prices and your value and resist the urge to slash prices. Deliver the same great value every day to every client.
Beyond that, know who your clients are. Your best clients likely come from the top 10 percent of professionals in your area. Stop projecting your own budget onto them. They’re willing to pay for the value you deliver. Build your prices, staff needs and purchases—your entire business—with these great people in mind. Solve their problems and they’ll be happy to hand you money each month.
Then recruit clients who are similar and dote on them, too. Refer others to another gym where they can play the nickel-and-dime game. Screen out the clients who don’t fit so you have the time and energy to deliver outstanding, industry-leading value to a smaller group of people.
Clients who receive great value won’t flee when you increase rates. They’ll be happy you’re taking steps to ensure the gym that’s helping them stay healthy remains open for decades.
Need More Help?
Our certified mentors have a precise process for implementing rate increases.
They help clients calculate the exact increase that’s needed, retain “at-risk” members, and inform staff and clients. Our toolkit includes checklists, templates and timelines, and our support system can help you get over your nerves when you’re making a key move to improve your business and your life.
It’s OK to raise your rates—but it’s not OK to fly by the seat of your pants.
If you need help fixing your business, let’s talk.
