We’ve done rate increases with literally hundreds of gyms—one mentor alone has done 81 of them.
Over the years, we’ve identified a host of avoidable mistakes and helped owners take the right steps to improve their businesses.
Here are the screwups to avoid at all costs:
1. Not Being Worth It
If clients can’t tell the difference between you and the other CrossFit gym or yoga studio, they’re going to choose the cheapest option. You can’t raise your rates “just because.” Clients should have a clear impression that you’ve been undercharging (usually for years). Follow our template to explain your position—very briefly—and build value without apologizing for raising rates.
2. Apologizing
If you write a long, tear-jerking email, your clients will feel as if they’re doing you a favor by helping you out instead of paying the fair price for the value they receive. The last thing you want is clients thinking you owe them a favor. We have battle-tested language we provide to help clients get to the point without making withdrawals from the emotional bank account.
3. Failing to Get Staff on Board
Talk to your team before the rate increase happens. Tell them why it’s necessary and how it will help them long term (but don’t promise them raises). Two-Brain clients: Use our template.
Staff members need to hear two things: A. The rate increase is necessary to grow the gym and help more people (including them); B. All client questions and concerns should come straight to you in person. It’s not the coaches’ job to explain or to disrupt classes to deal with “feedback.” And you want clients talking to you so you don’t get the “everybody’s mad!” message from your staff.
4. Running a “Townhall Meeting”
Clients will think your business is a democracy and that you’ll weigh their opinions on all decisions. It’s not a democracy; it’s a business. Clients have already voted with their credit cards. They are paying you to make these decisions, not to collect votes. Nothing positive can come from a townhall, but you can stir up a lot of negatives.
5. Making Promises About the Money
One of the biggest mistakes people make is saying, “We need money for more equipment!” Then clients will look for the new equipment. When you buy it, you’ll have more equipment but make the same money.
For example, when CrossFit HQ raised affiliate fees, it said, “We’ll use the money for more marketing.” Now, instead of measuring the value of affiliation or the value of the brand, affiliates keep asking “where’s the marketing we were promised?”
6. Taking Advice From People Who Haven’t Raised Rates
Common misconceptions from the ringside gurus: “If you’re delivering top value, people will see it,” and, “People want to pay more if you have more coaching certifications.” Likewise, don’t take advice from clients and staff who have never owned businesses: They’re likely to say “drop your prices and get more clients!” because they don’t know what you know.
7. Going Backward
The worst mistake I’ve ever seen was when a gym owner screwed up No. 3 above and her staff led a revolt. Instead of saying, “OK, I’ve lost some clients, but I’ll build from here with the right prices,” the owner took it all back, cancelled the rate increase and eventually closed her gym. Who was the winner in that situation? Answer: No one.
8. Looking at the Wrong Metrics
Gyms that raise their rates often go backward in client headcount (a little) but take a leap forward in revenue. And it’s revenue that pays the bills and the coaches and the owner, not how many clients you have.
9. Not Taking the Long View
In the moment, it’s hard to take client pushback on rate increases. But if you don’t make the move, are you really going to be around in five years? Ten years? Will the complaining clients still be members in a decade? Probably not—but your business will still be going strong because you did the hard things required to ensure its success.
Get Expert Help to Minimize Pain
Look, you’re probably going to lose some clients when you increase rates.
But think about who these clients are:
- They’re often the price shoppers who didn’t understand your value when they signed up and are always likely to leave for discounts somewhere else.
- They’re probably the biggest complainers (not always, but it’s amazing how often the people who complain about one thing are just looking for an excuse to make a big statement).
- They’re usually people who are looking for any reason to leave. If it isn’t a rate increase that pushes them out, it will be the cancellation of the 10 a.m. class (which they never attend).
If you take a small step backward in client headcount but make more money, that’s a win because every new client will pay the new rates and won’t care about the drama.
And our mentors have an exact calculation to help you determine your overall revenue boost even if all the “likely leavers” depart when you announce your increase. (In many cases, the likely leavers actually end up staying because the owner handled delivery of the increase so well.)
My best advice is to do the increase with help and support from a mentor, turn the page and move on.
Short-term pain is definitely worth the long-term reward. And if you get expert help, you’ll have far less pain for a much greater reward.
