If you’re planning on opening a gym, one of the main things you need to figure out is how you’re going to price your gym membership. Price yourself too high, and you won’t find paying customers. Price yourself too low, and you’ll find it difficult to stay afloat after a while.
However, what’s the formula for arriving at a membership pricing strategy for your gym? Well, you need to consider certain important data points before you arrive at a price point that works well for your gym. Let’s dive into how to go about creating a pricing strategy for your gym.
At the end of the day, you neither want to price your gym membership out of the market, nor do you want to pay out of your pocket to keep the business running. Here are the four main factors for you to consider while setting up pricing for your gym.
Understanding your customer demographics is important because once you have that data,you know your target market. Ask questions like who your customers are, where they come from and if they need to travel to use your facilities. Here are some of the key points you need to figure out about your target audience.
Next up, find out who your immediate competitors in the area are, how your gym is different from what they have to offer and what exactly they have to offer their customers.
You need to figure out what the other fitness businesses in the same area are, and what they charge for their services. This includes other gyms, sports clubs, recreational centers and any other business that may have anything to do with physical fitness.
Pay attention to details like what other gyms in your vicinity are charging for their membership packages. what facilities they have and what value addition they offer their customers.
There are multiple reasons why you ought to know all this before arriving at your own pricing strategy. For one, your prospective customers also know what they charge, and will compare their offerings to yours.
Second, knowing this information will allow you to either offer your clients something in the same ballpark, or allow you design your membership to offer something unique and stand out.
This is a no brainer, irrespective of whether you run a fitness studio or a tuck shop. You need to know how much you need to spend every month to keep the gym operational, so you know how much you need to make in order to be in the green and make some money.
When you’re calculating costs for a gym the factors you will need to consider include rent, staff salaries, utility bills, equipment and maintenance, marketing costs, PPL licenses, insurance and finally, taxes.
However, this alone is not enough to help you decide how to price your gym memberships. While you may make profits, you may be limiting how much those profits are if you do not consider demographics and competitor pricing in the equation.
The final piece of this puzzle is how you want to position your fitness center in the market. Do you want to be a high end gym or do you want to be at the lower end of the spectrum?
Both models have their merits. High end gyms charge a lot, but have the best gym gear, focused branding, the most number of personal trainers, more facilities, much less crowd and will generally have people who want to be seen associating with the brand.
Lower-end gyms will charge a lot less, but as a result, will see a lot more foot traffic. They are also likely to have minimal equipment, bigger class sizes and fewer facilities than high-end gyms.
How you position your gym will depend on the demographics of the neighborhood and your immediate competition.
As a new health and fitness business, your gym pricing strategy has one key focus: to increase revenue streams that ensure you have a healthy ROI. There are several tactics you could employ to make this happen. Let’s take a look at some of them.
A lot of people want to “try before they buy,” be it a new pair of shoes, clothes or a gym membership. Offering prospective customers free trials when you start off can be beneficial to both of you.
Your customers get to experience first hand what the new gym on their block is all about and what you have to offer. You, on the other hand, have the opportunity to observe, ask questions and customize your offerings to better fit the demographic.
While you definitely don’t want to price yourself too low, you still need to offer the market some bait to reel in enough customers to sustain your new gym.
By offering an attractive introductory rate for the first three to six months, you not only start your income coming in, you also greatly increase the chances of these customers subscribing for a year long membership at the end of that initial period.
Once you have a regular set of customers who are happy with your services, make them your brand ambassadors by encouraging them to evangelize your gym among their friends and relatives. And to make it worth their while, offer them a discount for every referral that converts into a paying customer.
Your membership plans do not need to be “one size fits all.” You can have different pricing buckets catering to different needs. For example, you could have a basic gym membership at one price, gym membership with a personal coach at another price and charge extra for add ons like pilates or yoga.
A lot of customers find purchasing bundles or packages to be a great value add, rather than having to pay for the services offered in the package separately.
While creating these bundles, it would help if you understood what services your target demographic actually utilizes more than others, and offer those as a package deal. For example, you could bundle three or four sessions a week with a personal trainer with daily access to the sauna.
While paying customers may see these bundles as combo deals that are good value for money, they end up paying what ideally falls under the premium bucket to get access to these packages.
Bundles work because they entice members to pay for something they might not have used otherwise by offering it at a slightly concessional rate. Optional extras are services you’d charge a premium for that members might not use regularly.
Examples of what qualifies as optional extras include specific courses, such as cross-training and yoga. It could also include allied services such as child care and massage therapy.
If you’re setting up a new gym, you’re going to need a robust technology partner to help you with every aspect of running your fitness business. Bookee is just what the doctor ordered.
Not only can Bookee help make gym administration a breeze, we’ll even build you a branded website, a fully functional app, an online retail store, manage your payment gateways and a whole lot more.
Book a free demo with our team today, and you’ll see why Bookee is among the most competitive and complete gym management software in the market today.