One of the most common questions asked by CrossFit gym owners is one of the most difficult to solve.
Like so many things in fitness, the correct answer is “It depends.”
But I’ve never been satisfied on that answer, and when I hear it, I always want to reply: “Depends on WHAT?” So here you go: the real answer.
Should you put your prices on your website?
It depends what phase of entrepreneurship you’re in.
If you’re not sure which phase you’re in, start by taking the test here.
If you’re in the Founder phase, keep your prices off your website. You need as many conversations with potential clients as possible. You might convert someone who would have been turned off by your rates before they experienced your coaching prowess; but more likely, you just need more practice doing consultations anyway. Get as many in the door as you can. Remain undaunted by price-objectors.
If you’re in the Farmer phase and have a high ARM (average revenue per member per month) and a high LEG (length of engagement), keep your prices off your website. You no longer WANT every client, but the high lifetime value (ARM x LEG) of the clients you DO get
If you’re in the Farmer phase and have either a low ARM or low LEG, put your prices on your website. Your best opportunity isn’t to get new people in the door. It’s to increase ARM and LEG for your current clients, and focus only on the clients who will drive those numbers out. Let people self-select based on price, and use the time on goal reviews with your current clients instead.
If you’re in the Tinker phase, put your prices on your website. Right up front. You no longer have time for people who need to be sold on price.
When Catalyst passed the point of 33% profit margin, I started experimenting with our prices. I put the prices on our site; then took them off. Without a doubt, fewer new people booked consultations with the prices on our site. But by that point, I didn’t want to talk to everyone.
The exact thing I said to our GM was: “If only four people out of ten are going to sign up after our consultation, then I only want to talk to those four.” The other six were mostly price objectors.
When I put our prices on our site, our conversion rate virtually reached 100%.
Did I miss a few people that I might have convinced? Maybe. But at that point, I was willing to let the “maybes” fall away, and focus only on the people who weren’t going to think about our rate every month.
One of the key differentiators between Founder, Farmer and Tinker phase is your Effective Hourly Rate (EHR). You determine your EHR by dividing the Time you spend into the Money you make (EHR is money divided by time.) We call this the Kingmaker Equation.
When your time isn’t worth much (your EHR is low), then spend it on consultations. Get people in the door. Work on talking to people and helping instead of selling.
When your EHR moves past $50 per hour (Farmer phase), you have to think about the value of each potential client. If your ARM and LEG are high, then it’s probably worth meeting as many people as possible, even if only 40% sign up, because their lifetime value is so big. If ARM and LEG are low, then you have bigger problems than how many leads you get anyway.
But when your EHR moves past $500 per hour (Tinker phase), you really don’t have time to waste on someone who doesn’t know your price. It’s not their fault they can’t afford you; do everyone a favor and save them the time.