subject: Raising The Rates In Your Fitness Business
[print this page] We know that January and September are the best times of year to do this. And do it you must. A little math will enlighten you to what you're missing, and overcome any fear/doubts you may have:
Let's say you currently have 40 personal training clients who pay, on average, $50/session. Let's say you're averaging 2.5 sessions/week/client for a total of 100 paid sessions per week. That's $5,000/wk or $20,000/mo. If you bump your average session fee to $60, and nothing changes, you've just put $4,000/mo NET profit into your pocket. You are not doing any more work or increasing your overhead in any way. It's PURE profit. That's a $48,000 per year raise you just gave yourself.
Okay, but you're worried clients will quit, bitch or revolt. If you get more than 10% of your fitness business clients complaining and/or quitting, you are doing some things very, very wrong in your business. Because they obviously do not see/appreciate the value you give them. But, let's say you have big problems and 15% of your clients quit on the spot. What do the numbers look like then?
40 clients X 15% = 6 clients who bail out on you, leaving you with 34. 34 X 2.5 = 85 paid sessions per week. 85 X $60 = $5,100/week, or $20,400/month.
What has occurred? First, you got rid of the deadbeat clients who don't appreciate and value what you do (although you still need to look at WHY you lost so many--what are you doing wrong?). Second, you increased your gross sales by $400/month or $4,800/year (while decreasing the total number of trained sessions). Third, you now know you have a value-gap problem, and that's a good thing to know - so you can take steps to repair it. Fourth, you've opened up some time slots that you can now re-fill with better clients. Fifth, you (re) established your premier positioning in the marketplace. Sixth, you now have an additional five grand per year to put towards marketing. This is so obviously a winner; I'm always shocked by how many don't do it.
A few years ago I created a raising the rates direct mail campaign for a member of ours. He used it to bring in about $100,000 in January of '04. Since then, some others have used it to bring in equally impressive numbers. One client of ours (who prefers to remain anonymous) has used this cash flow surge raising the rates campaign to generate OBSCENE profits every year. Most recently, in '07, he came very close to HALF A MILLION DOLLARS in 45 days. That is not B.S., I assure you. Raising the rates in your fitness business is not only vital to your positioning, when done correctly, and coupled with exceptional service year-round, it can make you rich.
by: Mike McCoy
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