Choosing membership rates is one of the more crucial decisions you will make as a club owner. If you price your gym too low, you run the risk of overcrowding, while raising membership rates too high means you’ll be missing out on potential members and also lose profits. Finding that pricing sweet spot is critical, so it’s important to understand the varying factors that go into membership pricing structures. The following are elements to consider when effectively pricing your gym memberships.
Analyze Current Market
Before setting up shop you probably took a look around at your competition to determine various factors like location and scheduling. Similarly, when considering membership pricing, you will need to examine the membership rates of other gyms around town. Yes, even if your gym is completely unique (think parkour boutique studio among big box corporate gyms) you will need to analyze the current market of all gyms in the area. While you don’t want to ignore your competitor’s sales, special events, and seasonal deals, your focus should be mainly on core pricing. These numbers will help you better understand the following: high-price/low-quality, high-price/high-quality, low-price/low-quality, low-price/high-quality. These numbers will enable you to connect the value given by your competition, which will, in turn, present a thorough understanding of the general price range for your own membership rates – allowing you to remain competitive.
Positioning to Differentiate Your Brand
As you analyze your competition, you will surely want to get a handle on positioning, doing so helps you to differentiate your brand and business from every other studio in your market. In the fitness world, positioning is crucial. If you position your gym as “high-end,” you will need to be sure that is reflected in everything from equipment quality and membership perks to décor. If you are truly a premium gym you can charge larger membership and drop-in fees, which means your clientele will be high-end as well. This demographic appreciates extra perks and an environment that caters to them. They also appreciate less congestion then cheaper-priced gyms. If you choose to make a high-end gym you’ll want to be sure that you build your branding so your clients feel as if joining your gym is not only an elite mark of quality but also a status symbol.
Alternatively, you may choose to price your membership to reflect a “low-end” positioning strategy. In this case, you are branding quantity over quality. As a bigger gym you will be able to lower your price and get more people in the door. Members automatically understand that reduced pricing means more members and more congestion as well as a lack of premium equipment and mediocre décor.
Balancing Membership Traffic
Even in a lower priced gym, you don’t want your facility to be so over-crowded that it becomes uncomfortable for members. In most cases, people just want to come in, get on with their workout and leave. However if there are constantly lines for machines, then you may find people start cancelling. Congestion is inversely related to gym memberships in that the more a membership costs, the less congestion there will be. And, of course, vice versa. When setting up your pricing strategy you may look into gym management software to help manage this and other operational factors. The smoother and efficient you run your gym, the better the reviews you’ll get and the more people will want to join, and stay as a member.
Extras: Packages, Add-Ons, Etc.
Everything from personal training and group training to VIP perks are considered add-ons at a facility. These are great ways for you to bring in extra revenue without changing up your membership pricing scheme. From larger lockers and private showers to complimentary smoothies and massages, you’ll want to consider which features to include in each type of membership – basic, premium, add-on, etc.
After you’ve established your membership pricing, you’ll want to consider ways to keep your members motivated and excited about working out. The more your members come and make fitness a habit, the more money you’ll make through them and word-of-mouth. After all, if your members love your facility, they will want their friends to join. People love working out with a buddy. If your membership pricing is right, you’ll find that it’s one of the best ways for you to maintain and increase your membership.