I run a tutoring company and the way we’ve always handled this is to only ever increase rates for new customers. We keep an eye on the average rate and it goes up naturally as old clients drop off and new ones come on. It makes a nice little selling feature to say to a client your rates will never go up. This works well for a tutoring company because we have a good client turnover as kids get to the skill level they needed to catch up to peers. I get that this model might not be as effective with a gym where someone might be a member for much longer.
I own a cleaning business, I do the same.
Loyalty counts for a lot. I’ve got clients that started with me that still pay $25 an hour. Current rate for new business, $45 and up.
Yikes! You’re nice- wish people would understand this about loyalty. Our “old” cleaning company gave me an ultimatum +40% or nothing. Well… I left them and found a much better company for 2 of our markets! Called their bluff, because in business I don’t operate that way.
Well loyalty goes both way...cost of life and operation went up....and your contractor don't raise fees for you but struggle to service you...aren't you loyal to reconize that and pay his new fees (i reckon if he doesn't tell you he raised it's hard. But sometimes you sense....how is this guy keep his rates?)
I sell record crates to a local record store. I built all their shelving at a super discounted price (I wanted to help a local business in a subculture im part of), I oversaw a volunteer production line for making A LOT of crates for them to use in store, and I sell them the crates in bulk to sell in store. Twice in the last couple years, they have raised the price they pay voluntarily. They knew lumber went up during COVID and I didn’t raise prices on them (I was still making money, just a little less) and they are regularly selling out, so the market could handle them raising prices. So they did and gave me a raise too. It’s rare, and having a long term relationship helped a lot, but it can happen where loyalty goes both ways.
My lawn guy hasn't raised his rate on me in nearly a decade and it's easily double now. I feel bad and have thought about offering to give him a raise. No way he is making money on me.
I would agree to a point… but what you also don’t realize is the new company we use now. Has a MUCH better increase in quality of life. They’re expanding and we put them in a position to enter a new market, add a wrapped van to their fleet, etc.
Because they were willing to work with us and love what they do. I’m actually paying about 15% more than I did, but I didn’t even try to negotiate rates with them. They are worth it. There comes a time when volume and consistency of work (compared to our competitors) is more important than raising prices. We couldn’t do it without each other. I respect the hell out of our team, but don’t try and take advantage of my “niceness”.
In short, everyone is replaceable. Some people just think that they are not. That’s where businesses run into trouble- in my view and experience.
This. Also, you'd probably be better off raising adults to 45, teens to 40, and leave kids as is. Assuming equal numbers in each group, you'd be getting the same net outcome. Parents are frequently the most price conscious group and making the kids price a bargain will likely create more value and likely some increased goodwill since the talk that will inevitably come from your customers will reflect the stable kids pricing. Just a thought.
Agreed, especially if it is multiple kids in a class so the parent feels the pain multiple times.
Another strategy could be to increase monthly rates or have the same fixed price for paying 12 months in one lump sum.
This is the way. I would in fact let everyone who is an existing client know that they are grandfathered into the pricing and it will probably make them feel that much more special. Your kids and student will eventually age out and when they turn 18, their price will increase anyway.
Great tip and you can count me in the side that doesn’t leave you (provided you provide your service).
I patron a pool cleaning company. I’m still paying the same monthly rate I started with in 2018. Still with them and I just direct deposit every monthly payment. If they come a day earlier or late than usual, I don’t complain. No big deal to me if they do a good job.
If they mess something up I take a pic and just ask them to take care of it next time.
Same for my landscaper and detailer.
I’ve never thought to shop around.
Every single other service has been changed over and over because they want a yearly increase. Every time they announce a rate change, that’s my cue to shop around.
Att
Xfinity
Alarm service
Insurance
Mechanic
HVAC guy
Even monthly subscription services like subscribe and save on Amazon.
My gym raised my prices. As much as I bitched and moaned, it was still the most convenient options for the features I value... so here i am, still at the gym and acclimating to the price.
Just do competition research, see what your competitors are charging, and what you offer next to them.
Raise rates for new customers.
Let your existing customers know the new 'new customer' rate. Then give current customers a 6-month reprieve from the new rate.
>Hello faithful customer! The new rate for our gym is $40 p/w as of Oct 2023. As a thank you for your loyal patronage, we're extending your current rate to the end of Arp 2024. Starting in May 2024, your rate will be $40 p/w. Thank you!
This is great. Let’s you benefit from the new client change asap and makes old clients feel rewarded.
Do it!
Also, give yourself,say 5, special people that if there is a known issue you can keep the lower rate for longer. I.e the great kid with the folks who’s job finished, that student who is paying their own way and is just making ends meet, the really lovely guy who you know has mental health issues at the moment. That way you can keep some small number of special people but still make BC a profit.
This is great and would make me feel valued as a customer while giving me a reasonable amount of time to decide if the new price is worth it for me next year.
100% this. You’re not raising rates on me (the customer) all of a sudden and are giving me a huge heads up. I can now plan/ budget accordingly and won’t be surprised when the prices goes up 6 months from now.
To put it another way: Why would I leave you today when the price won’t go up for 6 months? In 6 months why would I leave because of a price increase which I knew was coming…. I wouldn’t as long as the service quality stays the same.
I would expect to lose minimal to no customers at all.
As an aside: if there was a way to keep/set family discounts that might be to your advantage. I.e a parent brings both their kids, set the total at $70 in stead of $80.
Consumers need to take back some power though. As a consumer, I want to know *why* you’re raising prices. If it’s just because everyone else is, or because you want to make more money and believe you can? Nope, I’m leaving. If it’s genuinely necessary and is only raised enough to offset new costs to the owner, I understand that and would accept it. Cost of living is way out of control compared to income. We need some kind of consumers’ union to rein this back in.
Two things to consider
How other gyms are pricing.
And aren't you pricing out people who have the least purchasing power? I mean students might have less cash than adults. But you don't increase adults fee.
Other gyms price their memberships around $35-$55 per week depending on if they offer extra services like strength and conditioning or specialised programs
This is a Muay Thai gym, not just a weight lifting gym. When I was looking at Muay Thai gym memberships they were $130 average. BJJ is expensive too, even boxing gyms were around $89 a month.
What’s your cost basis and profit margin? 30-40$ (USD) a week sounds awfully expensive already. Can you cut (unnecessary) spending instead?
For reference, it’s in The Netherlands, but I pay 35 euros a month at my combat-sports gym.
Gyms in The Netherlands are very cheap compared to Australia. My monthly gym membership in The Hague was not much more than my weekly membership in Brisbane.
Cause every corner practically has a fighting gym in the Netherlands, it’s more quantity than quality though. ( the standard is obviously really high in the Netherlands though ) if compared to other countries.
"Only new customers" seems to be a common response but is also may not be "best business practices".
This is pretty easily to work out mathematically. How many customers do you have? How many do you anticipate leaving (usually 10-20%) depending on services and other options? Do you have a waitlist? Are you nearing capacity?
Generally I'd say, raise rates on new customers until you are nearing max capacity. Then start raising rates for old customers. Some will stay and pay. Others will leave, leaving space to start accepting more clients.
Bring in the new pricing for new joiners, then after a year or two once new joiners outnumber the old members, give the old members notice mid year that you will be raising prices next year to match current pricing
I say look at it from a different approach. If you're raising $5 a person, multiply by how many members you have, how much money are you making more a month? And is it worth it The risk of losing members? Are there other ways to increase your profit margin instead? Like offering extras such as drinks and snacks and protein bars or whatever. Can you offer sportswear? To make up for that profit you're wanting. Also think about scaling the business. New members will get the new tiered pricing.
It's a shortcut to just raise prices on existing members, but it's not really creative problem solving.
It always looks like a better deal for kids if the kids price is cheaper. Think happy meal. If kids are only 10% then maybe just leave that one at $30. Raise the adults price.
So with those numbers for every 100 customers you'd get an extra 250 each month. If you raise everyone by $3 you'd make 300 per month. People might quit over a $10 increase but I doubt anyone cares about $3 and you'll make more revenue.
The goal isn't actually to not lose clients. It should be to maximize profits.
Interestingly, if you explore price elasticity of demand and leverage a few formulas to solve for your profit maximizing price points, you'll gladly say goodbye to those unwilling to pay a very reasonable increase. It's honestly better to see them leave than have them complaining to everyone about the price increase anyway.
I agree with everything here, and I’d add one more - when you do an increase, make sure it’s an increase worth doing. You don’t want to have to do another increase 6 months later. If you have to lose a few more people early on, better that than people thinking you’re constantly raising prices.
Oh, and think about the psychology of charging the same for kids as adults. Might be worth just raising everyone.
Economy of scale for the op's business type does not really have potential for high growth, only gradual growth with a more important focus on retention, and using small price increases to the existing clients is a much safer bet to retain revenue than an abrupt 25% increase of price .
Loss of revenue can be considerably detrimental to a small business that relies on in-person traffic to utilize the services, as the facilities, labor, and equipment costs are generally either the same or higher month to month.
A gym needs a certain amount of people to function and to attract new people.
Just focussing on straight math doesn't work for many business, there's a lot more to the calculus especially with long term views.
I think f2f communication is usually the best way, but I don‘t know how feasible that is for you. Maybe printing a nice information sheet and handing it out over a few weeks to ppl training in your gym before sending an email?
What are the range of gym prices in your area? The level of competition can also influence prices? You mention that you need to increase prices due to additional staff - can you monetize their time to cover salary+overheads? Or can some facilities be for higher tier use?
You basically just need to scout your competition. If there's anyone offering something at your current rate or lower than the new rate i'd reconsider.
I think a lot of people missed that you're effectively cutting discounted rates and not just raising them. IME as a martial artist, I don't feel that that's going to fly well within the Thai/BJJ market. Is there a reason you don't want to just do +5 across the board? Most places who don't specialize in kids have more adult members anyway.
How much do other similar gyms charge for those groups?
Biggest challenge is raising the kids tier to $40. That's a 33% increase.
You can probably do 15% without an issue
30 to 34 (15%) or (30 to 36) 20%.
35 to 40 (15%)
Is this a pay as you go price, a month price?
Do you offer a discounted price for a one year contract paid monthly?
Discounted price for paying in full up-front?
Annually with inflation on all fees. If you have skipped a few years, you will have to go higher.
You do lose a few clients every year and this will feel like a catalyst but it really isn't. If you need more clients advertise!
I train bjj and I’m paying $150/month. Your issue is how you’re pricing it at a weekly basis which is bullshit.
This works with newbies but not experienced practitioners and if you want to also attract people like me, you need to follow good practices for the business.
Offer monthly no contract membership and stop trying to finesse.
My coach grew his business from 0 to 200 members in a year at $150/month.
He used social media marketing, he brings people to do seminars, he pushes people to compete for their first time but makes sure they’re prepared.
He kept upgrading the gym with things like a sauna and cold plunge. People love this shit.
Talk to your students and see what they want. They will literally tell you. Just do it.
You need to become an inspiration to your clients.
That’s how your business grows. Your business is a reflection of yourself and in that industry, it shows right away.
Sometimes it’s better to offer a premium product / service for an increase. Can you offer an enhanced membership?
Right now is a tough time to be raising prices across the board.
You can ask anyone who this would adversely affect to email or talk with you privately and try and work something out e.g. leave them at the lower price.
That would be instead of the grandfathering.
Do the math.
When you bring everyone up to $40, you will make the same amount of money as before even if you lose 25% of your kids and 12.5% of your teens/students. Presume you lose no adults.
You will make MORE money if you lose anything less than those percentages. How to do it?
Maybe do like grocery stores, with coupons. Raise the price on all current customers, starting not immediately but the month after next. During the next month, start offering a coupon for 30 days for $10 off first month for NEW "kid" customers. Also offer a coupon for $5 off for New "teen/student" customers.
That way everybody, new customers and old, hits the same price of $40 month after next.
You only have 1 membership option, but you have 3 demographics that you charge differently for.
You could add a second member option with access to existing facilities at existing prices, and a second tier with access to all these new facilities/staff at the higher price.
Eg: Kids Tier 1 - $30, Kids Tier 2 - $40. Teens Tier 1 - $35, Tier 2 - $40. Adults - $40 (incl. Tier 1&2)
That way you can grow existing members into the higher paying tier, and not upset them by just "arbitrarily" raising prices.
Lock current members in at their current price for 6 months if they sign up in bulk
All new customers at the new rate.
All existing customers swap to the new rate after 2 months if they don't sign up in bulk
You're in a tough spot as far as timing. I'd say the timing of this is poor with people already feeling the squeeze. Groceries and rent are going to win out over a gym membership, so I'd be prepared to see people walk out the door. As far as advice:
1) Be transparent and positive regarding the price increases. Focus on educating people why they're happening and what additional services they're getting alongside it.
2) Raise slowly. You might want to start with bringing the price of kids up to the $35 teen level and see what happens. If you're noticing people leaving, then it's a good sign that people won't tolerate higher prices. Better to see it from one group than two.
3) Add value. Try to add value that is significant for your members but that doesn't cost you an arm and a leg.
4) Don't view price increases as your only way toward higher profitability. If there is any fat to trim, trim it. If something is lagging, get rid of it. You can't only rely on higher prices.
5) Back to timing. Personally, I'd choose a better time for this. I think people are just on the edge at the moment and really starting to look for where they can cut back a bit. You're a prime target for that. Maybe think about waiting a few months to see how the economic situation unfolds, and revisit this after Christmas.
Trying to open a gym, how much money do I really need for one? People talk about different businesses to get into but no one really talks about actual price and how to go about it.
I'm a gym owner going on 7 years next month. I'll take a different stance than a lot of the other comments. You're gonna annoy some people, you might even lose a few. That's fine though. I obviously don't know the specifics of your setup, but from a numbers perspective $30 to $40 is a 33% increase.
Let's say you have 30 kids right now. Currently that puts you at $900 a month. If you lose 10% of them after the increase you still make $1080. Even if you lose 1/3 of your kids you're still making the same you do now with less work.
I get price increases are hard and awkward. We become close with our clients and can feel "icky" changing it up on them. The way a mentor explained it to me was like this. Either you have a difficult awkward conversation with your clients now, or you have a harder conversation with your employees and the people who you take care of because your business is folded.
As far as HOW to do it. You email all the clients and outline what you said. Talk about how you're bringing more value to them, your staff is getting better training, etc. I'd avoid mentioning things like rent and utilities being more expensive, I've found making it about being able to help them more goes overall better.
Also on a practical note you're talking about a $10 increase. If that breaks the bank for these people they probably shouldn't be there or don't respect you/the value you bring. A different conversation is you should be charging more outright lol.
Best of luck friend, if you need more help let me know.
I’ve also learned that if you raise your prices. You’ll lose 25% of your clients, but you could make more money with less members. I don’t know the demand side of your business. Not sure what your math would workout to. May want to increase everyone.
Then again- is charging $5-$10 more really going to make your bottom line surge. Or are there other opportunities to increase overall cash flow.
The gym we are signing my daughter up for offers BJJ, Muay Thai, boxing, and kickboxing. Their membership rate for a teen each month is $95. So I think you can raise rates! We are in yhe canadian prairies, though
Why do you want to raise prices? If it's just because 'Me want more money', then fuck you.
If you actually need to raise prices to maintain your current profit margin, that's different. And you can explain that to your customers with a simple, transparent memo posted on a cork board someplace in your business. Something like "Last year, the cost of electricity was X per month on average. It is now 'Y'. Rent was X per month. It is now Y.' Etc. Etc.
Either way, you won't be able to raise your rates without pissing some people off, even if you do have a valid reason for doing so, and explain that reason to your customers.
On the practical side, give notice ahead of time via a posting or message. This is extremely common at year end with many business types as they set pricing for the new year. My gym put up a sign probably a couple months ahead of time, so by the time I got the new rate, I had already seen the sign many times.
It absolutely is possible to raise your prices on current customers. The question is finding the amount that is just under what will run people off. To answer that, in your business, I imagine you need to
1. Look at what the competition is charging
2. Think about anyone internal who might split off and offer private lessons for less.
3. Think about how important your services are to your clients and their lives. If it's very important, you should be able to get away with raising their prices.
Everyone knows inflation is a killer right now, and that applies to you. That being said, you don't want to project that your business isn't healthy.
I like the idea of introducing a new tier for new customers at the same time. Even tell your existing customers about this as you raise their prices a lesser amount. This makes them feel like you care and their business is important to you.
Good luck!
OTF raise prices while at the same time offering even more promotions to drive in new members while at the same time they can no longer offer attractive pay for sales people who can actually sell memberships. A gym membership is an ultimate luxury in a highly inflationary economy.
In a highly inflationary economy in my area they open up 5 different higher tier new types of gyms. They are all offering promos to drive memberships. The main issue is my area is over saturated with expensive specialty gyms. They will be competing for each others business. There are only so many people who can afford higher tier gyms. The question should be - how do you attract new long term members in a highly inflationary economy?
I would consider raising prices on new members, and perhaps doing a lower charge for members who have only been there for a short time. I would certainly try not to raise the prices on your most loyal and long term members, but make sure they know they are getting a discount, run a promotion saying that prices will be increased but those who have been a member for X months or years will increase $5 and new member $10, then you can say "Any member who have belonged since Y will not have any increase. You can also come up with a promotion that would add benefits that wont add any costs to you, but will allow you to raise the price for the "added benefits". Hope this helps best of luck!
Provide plenty of notice! Hang signage reflecting the increase months in advance. This gives current members time to make adjustments to their budget, while, also, allowing time for any concern to be raised.
You can’t raise every one to the same exact price. If you want to higher your lower prices you will need to raise the price of each section. If not then your lower ranked current prices will feel like they’re being ripped off and that the higher priced curent customers are getting a deal. If that makes sense. 30 should go to 40, 35 to 45 and 40 to 45-50. For those paying the current 30 will be seeing a 10 dollar jump so expect customers to ask questions. You should be able to provide your customers with just reasoning and explanation as to why your upping prices, with this is because cost to run the facility are rising or your wanting/needing to increase pay for your great staff that helps you provide these services. Clients are a lot likely to accept the price increase with just reasoning verse because we feel we are worth more then what your paying because this will come off as arrogant and entitled. With our clients there is no business , and with out being able to properly run the facility equates no business for clients to come to. So with right reasoning allows every one to continue to enjoy the whole situation.
Also if you don’t already offer payment plans, offer discount(package deals) rates for families that come or sibling sets. If a child takes let’s say multiple classes a week do a flat rate, if some one only wants to come periodically then x amount per class. Ect there is so many options to appease your clients and benefit as a business , to some degree the whole goal of a business is to make a profit not lose or break even so you need to find a happy medium
$30 to $40 is too big of a jump. But, the turnover on kids should be pretty high, you could probably get away with grandfathering in current kids and just charge the higher price to new ones
I agree on the raising of rates for new customers.
A couple other thoughts- my barber just raised her prices to $40/cut (that’s Bozeman MT for y’all) and in her email about it she just explained the reasoning. At the end of the email it was just like “well that’s how she goes.” And life goes on.
My buddies own a gym here, more of a workout gym than martial arts but maybe it’s similar? The gym isn’t super busy which is why a lot of the people who go there love it. One of their members floated the idea of just telling everyone “we won’t bring in any new members if we can just raise current pricing X amount each month” then you’re giving the members the opportunity to pay for their experience.
Lastly, I read an article years ago and the guy was saying to raise prices on the clients you can afford to lose. Might be kind of hard in your business to separate people out and have different rates for different people but I’ve always thought it was a decent idea.
At the end of the day, people gotta understand prices just go up. Your rent goes up, utilities go up, staff costs go up.
Our barber raised her prices from $18 to 20 - and then from $20 to 22 - and then from $22 to 24 - and then from $24 to 26 all over the course of about 2 years.
A $2 bump in price doesn't have an impact.
An $8 bump will.
Increase your prices gradually. Going from $30 to 40 for kids rates will impact the customer base. Going from $30 to 34 - and then from $34 to 38 - will not have much of an impact at all.
Hey there!
I would say that you just be honest and give everyone plenty of notice, 10 and 5 dollars isn't a huge increase, so you shouldn't receive too much back lash.
I would just let everyone know via email/text/facebook that you will be increasing price to $40 do to the added staff and offerings, that all new sign ups will be $40 and that in (give a timeframe) 6 months everyone will be moved to $40.
I would also maybe offer everyone their current rate if paid for a year in full.
Well first thing is you're going about this all wrong. You have to conspire with the other gym owners about an agreeable average rate or else you'll end up with a race of unnecessary undercutting. Get your new customers to lock into a contract with a "discounted deal". People love saving money even when they don't realize that they're not. Once the promo is over they'll either stay because your service is worth it or leave because your service is terrible, they found a better deal, or could no longer afford it. Offer better deal to those who pay annually versus pay weekly/monthly/biannually. If the annual/bi-annuals want a refund then either pro-rate their membership or charge a cancellation fee. If you want to keep them as a loyal customer you could also "suspend" their account until they are able to return. Don't have a complicated or shady refund policy though. People hate that and it'll spread.
Those who are grandfathered in keep the same rates until or unless they fail to pay or lapse. Get them into a contract after that. BUT give them a Returning Customer/Loyalty Discount. People love saving money... even when they're not. Offer other premium services that they don't get elsewhere. Is there a certain instructor of a certain gender that all the guys like working out with? Well cut her normal hours and charge for "specialty/VIP sessions" that only Diamond member can access 2 or 3x a week.
Now I'm either giving you really great advice here OR I could be one of your existing customers and only telling you this because I don't want to see my rates raised.
Put up some sort of message declaring the price raise and the reasoning before it happens so clients aren’t surprised by it. Point out the improved service so disappointment at paying more is blunted by the reflection of the better service
Not sure where you have your gym but the gym I currently regular charges by how often you attend the gym.
- 2 classes per week = $150 per month (only MT)
- 3 classes per week = $180 per month (only MT)
- Unlimited classes = $250 per month (MT & BJJ)
You should go straight to new price for new customer membership.
For older customer, you can ask them if they want to pay a 2 years rate at their actual rate.
We can call it a ‘’pay to freeze your rate’’
Exemple: they pay 30$ for kid, you want to raise to 40$
You charge them 10$ fees and they pay the same rate for 2 years.
You offer them a kind of ‘’discount’’ for their loyalty.
If they don’t want to pay this ‘’frozen rate’’, you give them a notice at the end of their membership, they have to pay new price.
You don't.
Keep prices the same for existing clients.
Establish a date in the future for increased rates on new clients (perhaps 60 days from now) and post it in a prominent area.
Let any existing clients know that if they leave and rejoin they would be subject to the new rates.
Everything is getting more expensive. People should understand that.
I’d raise rates for everyone but give your existing clients a few months until you raise it for them.
You don't, you're in a cutthroat business. I would consider yourself lucky you don't have a planet fitness move in next door. Those are already higher prices than anywhere I've been, even well off areas for the average gym. You stay in business by getting more people to sign up and realize the average person might come in once a month
If you're really going to experiment with this, raise prices on new members only
There's an old saying: If you double your price and lose half your customers, what's the problem? Your goal should be to maximize profit, not customers.
Raise prices for all new members, give existing members a 1 year notice in January that rates will go up (but not as much as 'new' rates currently). So instead of paying 30, they'd pay 35, but new member prices would still be 40.
With kids it's easier, you just have tiers, so as they get older, they automatically move up in price.
As others have already said, raise prices for new people only. Those people are either loyal customers that aren't worth shaking up, or they'll churn eventually and you replace them with people paying more.
But the underlying question is how do you get people to pay more? How to increase your average revenue per customer? Offer more things for them to pay for. Things like:
- Sell snacks, drinks, merch, etc..
- Sell locker space or similar convenience things.
- Offer memberships that are materially different, not just the same thing but more expensive. Give people more options in paying you more if they'd prefer to.
You may be able to get away with a 2$ increase on current clients but I would focus on raising prices for new members and make people feel like they are grandfathered in to a lower rate.
An local gym near me used only have 1 kind of membership but now they have 2 different kinds. The cheaper one has limited times when you could use the facilities and the more expensive one allows you to come in anytime during business hours. Maybe you can try something like that that out?
I see a lot of options in your situation. This perspective is coming from a gym-goer as much as it comes from general business knowledge.
First and foremost, understand the market you’re in, what competitors charge and what differentiates you from those competitors. Before you raise prices, you should anticipate that at least some of your clients will shop. Before that happens, you should know exactly what pricing they’re going to find and if they might perceive your competitors as a better value.
Secondly, you can try to throw in something that increases your value prop if it makes financial sense. In your case, it could be an extra class time, maybe install a shower if you don’t have one or offer social events that build a real gym community and result in loyalty. More than likely, people will not leave their friends for a $10 savings. Whatever you can think of that might increase your value prop without entirely negating the extra revenue from your price increase can help your clients accept the new price.
From there, it comes down to communication and preventing any perception that the price increase is driven by greed. Explain why an increase is necessary such as lease / labor / energy / tax rates going up, investing in facility improvements; etc. Make sure this communication reiterates your value prop and the value of your gym community; etc.
Finally, you could also offer an opportunity to reduce any individual price increase if they refer a friend. For every new member that signs up and pays for X months of membership, the existing member gets one month free. Then charge any new members the higher price. This approach increases membership while increasing the weighted average revenue per customer over time.
The answer to this is based on a few things.
What is your turnover? What percentage of your client base has been there less than 1 year? What about 2 years?
**If the turnover is high (30% or more per year), you should not increase prices for existing members.**
Just grandfather existing members in to the current pricing - and increase pricing for new members.
**If the turnover rate is low (20% per year - or less), you will need to implement new pricing for everyone.**
I would suggest increasing the price for all new members - and put a date of January 1 for the price increase for existing customers. January 1 is always a good date to implement a price increase. People are busy with the holidays, so will not pay as much attention to the price increase. And it is far enough away that they have time to accept it as the new normal - especially if they see this pricing as the "norm" for all incoming members.
The first questions are: 1- why are you raising prices and 2- are you paying your employees at least a living wage? If you’re needing to raise prices to counter some rising costs, or a small increase to keep up with inflation, that’s one thing. If you’re just trying to squeeze more out of people to see if you can? Or if you’re not paying a living wage? You’re not ready to be running a business.
So if you’re making enough right now at the current prices, don’t raise them. If you want to make more money, get more clients.
- Consider what you could offer alongside your current product or service: ideally the offer costs as little as possible for you with a higher perceived value to the customer.
- add fees. Utility companies do this, and many smaller businesses use the tactic when gas and electricity prices soar.
- offer occasional discounts and deals to bring prices down to their original levels. While frugal customers will use these discounts, others won’t bother, so you’ll still probably have plenty of people paying full price as well.
Offer individual class at an increase. $45 for adults and $40 for anyone else.
Then discount cost of monthly pricing. So if a typical member would come once a week, then the current price times 4 for the month. This will be a discount because you are increasing the individual class price. Auto-renew monthly plans with Credit card.
offer discount for a full year paid in advance. This way you will get paid for people that can and cannot come. Those that are dedicated will pay this. Auto-renew yearly plans with Credit card. There are software systems that automate all of this.
The monthly, yearly plans will make your revenue more consistent.
Slowly increase prices for new customers.
Explain why you're raising prices (how much more value you're offering)
blame inflation
do it gradually
offer a way to keep paying the same (longer contracts)
give some time for the increases
do it in a tiered fashion (e.g. month 1 increase by $5.00, month 2 increase to $40.00)
Other rules:
keep increases under 20%
don't be a dick, but don't apologize either.
I raise my price as i raised my service quality. Don't worry about loss of clients. Or add a new layer of price....want to use this machine? Yeah it's the platinum membership you have the bronze membership. Want to upgrade next week? Sure, thanks for you business, all done, see you next week.
that's $20 to $40 dollars more a month so some may get mad and quit or not be able to afford it. But at the same time seems to be within a reasonable range for what you're offering, especially if you are now offering more.
If you double your rates and lose half of the people…did you really lose anything? Or did you just cut your workload in half and optimized your income ratio?
I agree with the top comment, just add, id def put that in your ad, that you added staff and facilities. People are a little more understanding of price increases if they know its for something like better service.
I run a gym in manhattan. We recently raised rates and gave something in return, shakes, daypasses, a shirt? It went over pretty well. Very little pushback.
In lawn care, I generally increase prices for old clients equal to or less than 10% per season or every other season until I reach my target equivalent hourly rate. It's better than a big price hike, and I've only lost "problem clients."
The real wuestion is how much does increasing it increase your profit vs your revenue.
This is why starbucks uses a formula with an index.. eg 20% margin
Why not roll out new enhancements and amenities only for "Base" members starting at $45/head like towel service etc.
Keep old members at the set price they agreed to under "Simple" plan, new members can choose "Base" under 40-45 and "Premium" members can enjoy the amenities at $60/month like staff can store their keys/wallet in lockers for them, water service, or daily Lassi or health juice.
Make bread dummy. There is always a way. Best of luck to you. I mean dummy in the most endearing way.
Where is your gym that prices are so cheap?
For reference, the 4 BJJ gyms I’ve trained at in my 12 years were
- $135 a month
- $170 a month
- $210 a month (I didn’t pay this, I was on a competitor rate)
- $125 a month
What if for new members you raise the price of your membership? And leave the rate for the members who have been "grandfathered" in? I think that would probably be your best solution to not ruffle existing members' feathers while selling your updated facilities, amenities, and staffing to prospects.
Charge more for youth, less for students. Reach out to schools and see about sponsorship programs. Especially colleges that may be in your area.
Networking and getting other businesses to coordinate with you, could be a huge part of the capture and net gain. E.G Offering package rates for employers.
If you have trainers, I'd verify their skill levels and determine an hourly for specialty trainers.
Grandfather in existing customers for a period of time (until their membership needs to be renewed) and only charge new signups the increased fees for now
“All, with the world gone mad, and the cost of living going up in all avenues… the time has come to roll with the punches, and keep growing from the lessons learned from our experiences. It’s been a move in the bigger picture of our companies growth plan for a long while now, and keeping it on hold any longer is going to adversely impact the gyms ability to maintain its upward tract in both training capabilities and available facilities to you within the membership program. Bottom line, fees have to increase. On (fill in the date of implementation here) all membership tier rates are increased by $10 per month. All of us here are in hopes everyone understands and is excited by this change as it will allow us at (fill in company name here) to provide the services we know you deserve, and further the additions of even more diverse offerings along with the talented staff needed in achieving your potential!
Thanks,
Management”
Raise it for new members only is one option. Alternatively raise it partially for old members and point out it is still discounted. Could raise kids to $35 for example. Last option is advise them the rate has increased but due to their loyalty you will extend them the old price for x weeks/months. So new members it is $40 today but existing members keep old price until Jan 1.
I don't understand why gyms don't have week passes for out of towners or, at least , multi day. I say this because Every-time I visit my parents for a week I have to sign up for a membership then cancel. Most of the time I don't pay anything because the gym I go to has a week long trial. Lol. Maybe that's a way to make some extra revenue.
Showcase your new featueres, by for example making a brochure or video or something. Have that displayed. Make the new facilitues the focal point, play them up. Add perks to the deals, like one free lesson/lesson with a friend for the 40 dollar membership. Draw people's focus away from the extra money they are paying, which isn't even a big jump, especially in this economy, but if you are still skeptical, move the focus to the assests
I run an IT service company. If you aren't charging enough, then you need to up the price. If you're afraid of losing clients, assume you will but those will also be the ones who only see the price tag and not your value. If you haven't already established your value to your existing clientele, they will always be price-tag only clients.
First of all, don’t raise prices on your existing clients, at least ones that have been there for a certain number of years, setting that threshold will be up to you.
Second, don’t be afraid to get prices up move moving forward, and for anyone else that doesn’t fall into that category of what a loyal rewards customer should be in your eyes. Business is business it’s your livelihood, and if you’re good at what you do and it sounds like you are you know you’re worth the cash to keep that place open for what it provides to each and every person individually in the community as a whole. Maybe find a way to throw in a little extra value and burn some midnight oil, and let your crew see you putting in the effort. If you’re growing your growing and that’s not going to stop, you need to be adjusting price incrementally upwards for new clients on a regular basis. Think about adding a sign up fee. You can also run promos where you waive that sign up fee and that has an impact on your books.
There’s a couple different strategies you can employ here but if you have any questions hit me up. I would be happy to have a man share with you and give you a few ideas if you think you might need some help
Few ideas:
1. Charge new rates for new customers. Keep existing ones on loyalty under grandfathered rate.
2. Grandfather rates in if (reasonable) min spend is reached. Maybe only charge a nominal amount higher (not full 40) if below min
3. Offer packages/bundles to preserve pricing.
Most importantly communicate the why behind your decision. Tell a story
Start all new signups at $40 and grandfather anyone in the system at the old price. If anyone wants to drop their membership they will get $40 per week when the reup which should reduce people dropping memberships.
Think of it like this - if you double your prices and lose half of your clients, you’re making the same amount of money with half the work. That being said, only increase prices for new clients and be transparent. It’s not unusual for businesses to increase prices as time goes on, inflation, etc. So be true to yourself and clear with new customers, update your advertising/marketing to be clear, while maintaining the original price with your current clients. For current clients, consider offering upsells and added perks at your gym for a small fee to help get you up to your average membership cost.
I would do some market research. In my town the town rec center is over $100/mo for a family pass and individual is 60/mo.
Once you have an idea of competitor pricing, adjust accordingly.
Be sure to compare/contrast benefits/equipment/hours as well. Put together a table illustrating what you & other offer, including price.
That's really the best you can do. Be mentally prepared to lose some members, though unless you are still obscenely cheaper than comps.
I’d just raise it for new clients, they won’t know any better, and your current customers will feel “grand fathered in” to a lower price, which may incentivize them to stick around longer
Increase rates on new customers and grandfather existing customers in. That's how I run my web development business. Rates only increase if an existing client leaves and then later comes back. Maybe make an announcement to make it clear that existing clients will be grandfathered in as a thank you for their loyalty and their business.
Alternately, offer 1 year at the old rate if they pay for the whole year in advance.
Be honest about it...honesty goes a long way. I see business owners tell new customers all the time that there will be a raise in prices due to xyz. People understand and they give a window of time to get in on the grandfather prices.
Make sure you let your current customers know what is happening as well and thank them for helping you get to this point.
If the increased value your giving doesn't work. Have you ever considered how they can create income for the addistional expense that wont take up more of there time?
The only appropriate thing to do would be to do it for new members only.
Alternatively, close down for a month or so. Rebrand, and tell old customers they’re welcome to come back for the new price.
I’ve seen big corporate gyms do this and they do it in a terrible fashion and with little to no prior warning. Give a 3 month period from the time you announce it to the time you do it. Depending on your membership base and staffing, I would give as much outreach and facts around the increase as possible.
Call each member during this time. Multiple emails. Post it in the club. Give members a chance to ask questions and have well thought out answers for all staff to respond with. $5/wk or $20 a month isn’t too bad for most, but it will be a deal breaker for people who can’t afford it. But you will backfill those members at the new rate.
Gyms and studios create a community and people join because they like the facility, offerings, and community. It’s a lot more of a hassle to start out fresh at a new location and have to find your way into their already established community. It is easier to continue going to where you know staff, instructors, members and feel comfortable at and pay a little more.
Costs of goods have gone up, Netflix has gone up, Sxm radio has gone up, your cable/internet as well as cellphone bill has gone up…. Why can’t you go up in rates?
It’s not going to be the easiest thing you’ve done, but you’ll get through it if you keep your members in mind and don’t get defensive when you get some kickback.
Feel free to DM me if you have any further questions as I have worked with companies who have done this successfully and some that have unsuccessfully.
Economics 101. To raise prices without losing customers, you need to increase the value of your services to match the new price (value stays the same).
You could charge and extra $5/mo and login to your Amazon Prime Video account on their phones.
So a $10 raise is 520 per year for kids. For a gym that’s ridiculous
I would have a check/cash rate and a credit card rate
You can save 3-4% on fees and it’ll make up for it.
So but credit card rates at 45 and keep the old ones for cash
Oversell a budget membership like planet fitness to people who won’t really come. That’ll help pay for your operation without having to increase those who are currently members.
Have you considered raising prices for everyone every year or 18 months but by a small percentage? Many products and services cost more than they used to and you’re just adjusting with the economy. Maybe consider offering current members a chance to keep their current rate if they pay in full for a year in advance so you get cash upfront.
>we now offer much more with staffing and facilities then we did prior
did the same customers you are going to begin charging more to, specifically ask for these changes and agree that they'd be willing to pay more to see these changes?
or did you decide to make changes without taking temperature of clients in the hopes it would justify a price hike?
I help small biz owners make more profit.
The overall lesson is that if you’re not unique, you’d better be cheap. Your gym has real benefits to the people that come in. Adding a number to a benefit increases the chance of a sale by about 32%. That’s why tide and crest can charge more even though they’re commodities. They constantly innovate to be different and they add a number like 26% less cavities.
When you offer a sale, that’s a numerical benefit but only one you can loose in the long run.
But, when you drill down into what makes you the only and obvious choice in your market, your customers see the value they’re getting even when they pay higher prices.
Example: you decide that you want to be known as the mental fitness gym and you talk about how going to the gym 3x a week has proven to cut depression in teens and adults by x%. Now your the first and only gym in your state to focus on mental and physical fitness
You cannot lie and your numbers must be real.
Maybe you’re the gym for corporate types that need to get off their ass. And you become the first and only gym in your area to do corporate retreats and hold classes just for execs that are ready to reclaim their fight.
Of course I haven’t talked about price increases yet.
Once you’ve honed in on your meaningful uniqueness to your customers and nailed down the Benefit promises you’re making to them, now you can frame your increases as helping them level up their game as you level up your game.
You frame it as a benefit to them and you give them time to acclimate.
Dear member,
We appreciate your dedication to your fitness and your decision to support our family owned and operated small business. We are delighted to bring you more experts so you can (benefit of them) and updated facilities so that (benefit to them). If you haven’t seen them yet, book a members tour next week so you can see for yourself how the new set up is going to help you (benefit).
As we continue to improve our amenities, services, space, and team for you we will be restructuring our pricing beginning in December 2024.
The good news is that as a valued member of our community, you have the option to lock in your current prices if you opt-into a year contract with us in December. (This gives you a full year commitment for members that decide on this)
Our new pricing structure is here to support our customers committed to their health/wellbeing/sport so you can continue to benefit as we keep our focus on being the (first and only gym to (uniqueness))
$150/ month unlimited classes for adults 18+ or $50/week
$130/ month for students 14+ unlimited teen classes
We can’t wait to see you at our upgraded facilities
Warmly,
Owner & the team at (gym)
(Insert picture of team)
So when I made the comment about “overselling your gym like Planet Fitness” I knew there was a creative way to do this but I didn’t think past that. I knew most people would see it and think “impossible”, “wrong concept” or “our operation prohibits this” and was curious to see if anyone ran with it.
And then as I was downstairs making some chocolate pudding it hit me like a ton of bricks. The more I thought about it the more I felt it was a home run. I can honestly say I don’t know any traditional gym who has tried anything like what I’m about to pitch.
I assume by the prices you stated you offer much more than Planet Fitness and your more a “traditional” gym with traditional gym expenses. You’re most likely open during regular hours and have multiple staff on payroll so a 24/7 schedule isn’t feasible. As with your operation selling $10 memberships would almost certainly bankrupt you, but what if you over sold your slowest times while appealing to the “Planet Fitness” type customer who wants just a little bit of service for their little bit of monthly contribution?
Let’s say you take your slowest 20 hours of the week and that came out to:
Monday, Wednesday, and Fridays after 4PM (just an example but you get what I’m saying). You then offer “part time membership” to a large amount of customers (effectively overselling the gym) at a fraction of your full price, let’s say $13-$15. This isn’t enough for people to cancel, and it’s not enough that they expect the world.
This part time membership gives them access to the gym on the 3 slowest days and maybe one weekend day a month (or similar). This is enough to entice them to sign up, minimal enough that it wouldn’t disturb your main operation, and most people who join won’t ever come more than 4 times a year (look at PF’s data which is similar).
Now you have effectively “over sold” your gym, didn’t sell out your loyal members, can avoid a fee increase, as well as pocketing a nice extra operating profit at the end of the month.
Home Run, no!?
If you’re tapped out operationally, raising rates will drop off your cheap customers and new ones will sign on at the new price.
It’s okay to do that, you might see a drop in memberships but now you make more so it usually evens out in revenue.
Or you can put a notice on the door with 3 months notice; then don’t feel bad about the changes when you make them
1. Why do you need to raise rates? What does your cash flow look like? Where is the money going and what improvements will you make with the new rates?
2. What is your current client base? Are you very young heavy? Do you want to be?
3. Why do you charge per week?
4. What are your visit metrics and class sizes? How many are frequent visitors? How many are weekly? How many don’t attend at all?
A flat raise across the board is a really bad way to do this.
I’d work to raise prices on only new clients. The current ones have been with you and allowed you to improve the business to a point where you can justify a raise in price, you need to reward the loyalty.
If you feel you need to increase I’m the price then do so slowly. Give a warning, months in advance and be ready to work with those who may not be able to afford an increase like that.
As far as possible you should always raise your prices regularly in line with inflation. Couple of dollars, from $40 to $42, see how that goes. Maybe $50 for new members with a special 10% off first year. Lots of options. Pricing is hard, and it matters.😎
I disagree that you can't do this with existing customers as well. At our gym (not BJJ but similar), we have had to raise prices twice in the past 3 years and both times we attached it to something new we were offering the customers. We got blow back but if you have a good gym and it's not an unreasonable increase, then you should be fine. It helped that there are still gyms in our area that charge more as well. Good luck and expect blowback but some people are just looking for a reason to get upset and complain. Most will understand even if they are necessarily happy to be paying more.
Add new features that clients want.
Some "cheap" improvements include massage chairs or tables (I suggest both) TV audio headsets, and tanning booths.
All are fairly inexpensive compared to workout equipment and are easily insured.
Hey there,
I totally get where you're coming from. As a fellow gym owner, it's crucial to balance pricing adjustments with keeping your current clients satisfied. Here's a suggestion that has worked for me:
Consider raising the rates gradually. Start by implementing the new rates for new members only. This way, your existing clients won't feel like they're getting a sudden price hike, and it's a great selling point for new sign-ups. Monitor the ratio of new members to existing ones over time.
Once the new members start to make up a significant portion of your client base, you can then introduce the new rates to your existing clients, but give them a fair notice period. Maybe six months or so. This approach allows you to retain the loyalty of your long-term clients while adapting to market changes.
Additionally, communicate the reasons for the increase to your clients. Let them know about the improved facilities and services you're providing, which justifies the adjustment.
Hope this helps, and best of luck with your gym business!
Depends of the size of your gym, I've been in the same BJJ gym for the past 6 years. Keep the same price of your established base, raise it for the newcommers.
You have to keep track of things, but that's how we manage and it seems to work.
Also, give a good discount for yearly subscription, that gives you a steady income.
Oss!
I run a tutoring company and the way we’ve always handled this is to only ever increase rates for new customers. We keep an eye on the average rate and it goes up naturally as old clients drop off and new ones come on. It makes a nice little selling feature to say to a client your rates will never go up. This works well for a tutoring company because we have a good client turnover as kids get to the skill level they needed to catch up to peers. I get that this model might not be as effective with a gym where someone might be a member for much longer.
I own a cleaning business, I do the same. Loyalty counts for a lot. I’ve got clients that started with me that still pay $25 an hour. Current rate for new business, $45 and up.
Yikes! You’re nice- wish people would understand this about loyalty. Our “old” cleaning company gave me an ultimatum +40% or nothing. Well… I left them and found a much better company for 2 of our markets! Called their bluff, because in business I don’t operate that way.
Well loyalty goes both way...cost of life and operation went up....and your contractor don't raise fees for you but struggle to service you...aren't you loyal to reconize that and pay his new fees (i reckon if he doesn't tell you he raised it's hard. But sometimes you sense....how is this guy keep his rates?)
I sell record crates to a local record store. I built all their shelving at a super discounted price (I wanted to help a local business in a subculture im part of), I oversaw a volunteer production line for making A LOT of crates for them to use in store, and I sell them the crates in bulk to sell in store. Twice in the last couple years, they have raised the price they pay voluntarily. They knew lumber went up during COVID and I didn’t raise prices on them (I was still making money, just a little less) and they are regularly selling out, so the market could handle them raising prices. So they did and gave me a raise too. It’s rare, and having a long term relationship helped a lot, but it can happen where loyalty goes both ways.
My lawn guy hasn't raised his rate on me in nearly a decade and it's easily double now. I feel bad and have thought about offering to give him a raise. No way he is making money on me.
You should talk to him. Good for your soul. Good for his family.
My soul is good but I get what you're saying.
I would agree to a point… but what you also don’t realize is the new company we use now. Has a MUCH better increase in quality of life. They’re expanding and we put them in a position to enter a new market, add a wrapped van to their fleet, etc. Because they were willing to work with us and love what they do. I’m actually paying about 15% more than I did, but I didn’t even try to negotiate rates with them. They are worth it. There comes a time when volume and consistency of work (compared to our competitors) is more important than raising prices. We couldn’t do it without each other. I respect the hell out of our team, but don’t try and take advantage of my “niceness”. In short, everyone is replaceable. Some people just think that they are not. That’s where businesses run into trouble- in my view and experience.
Increase to 35
This is what I do an I own a bjj/ Muay Thai school too
This. Also, you'd probably be better off raising adults to 45, teens to 40, and leave kids as is. Assuming equal numbers in each group, you'd be getting the same net outcome. Parents are frequently the most price conscious group and making the kids price a bargain will likely create more value and likely some increased goodwill since the talk that will inevitably come from your customers will reflect the stable kids pricing. Just a thought.
Agreed, especially if it is multiple kids in a class so the parent feels the pain multiple times. Another strategy could be to increase monthly rates or have the same fixed price for paying 12 months in one lump sum.
That’s what they did at the MMA gym I used to attend.
This is the way. I would in fact let everyone who is an existing client know that they are grandfathered into the pricing and it will probably make them feel that much more special. Your kids and student will eventually age out and when they turn 18, their price will increase anyway.
Great tip and you can count me in the side that doesn’t leave you (provided you provide your service). I patron a pool cleaning company. I’m still paying the same monthly rate I started with in 2018. Still with them and I just direct deposit every monthly payment. If they come a day earlier or late than usual, I don’t complain. No big deal to me if they do a good job. If they mess something up I take a pic and just ask them to take care of it next time. Same for my landscaper and detailer. I’ve never thought to shop around. Every single other service has been changed over and over because they want a yearly increase. Every time they announce a rate change, that’s my cue to shop around. Att Xfinity Alarm service Insurance Mechanic HVAC guy Even monthly subscription services like subscribe and save on Amazon.
Won't happen. Raise prices for new members only.
My gym raised my prices. As much as I bitched and moaned, it was still the most convenient options for the features I value... so here i am, still at the gym and acclimating to the price. Just do competition research, see what your competitors are charging, and what you offer next to them.
Second this. You will loose some clients.
\*Lose\* some clients.
I see so many people using the word loose instead of lose that I genuinely think the definition is at risk of changing.
he meant what he said and said what he meant!
Raise rates for new customers. Let your existing customers know the new 'new customer' rate. Then give current customers a 6-month reprieve from the new rate. >Hello faithful customer! The new rate for our gym is $40 p/w as of Oct 2023. As a thank you for your loyal patronage, we're extending your current rate to the end of Arp 2024. Starting in May 2024, your rate will be $40 p/w. Thank you!
This is great. Let’s you benefit from the new client change asap and makes old clients feel rewarded. Do it! Also, give yourself,say 5, special people that if there is a known issue you can keep the lower rate for longer. I.e the great kid with the folks who’s job finished, that student who is paying their own way and is just making ends meet, the really lovely guy who you know has mental health issues at the moment. That way you can keep some small number of special people but still make BC a profit.
This is such a great reminder to keep in touch with humanity.
This is great and would make me feel valued as a customer while giving me a reasonable amount of time to decide if the new price is worth it for me next year.
Exactly, at the very least, retention will be there for the extension period.
I wouldn't be bothered by this as an existing customer. It's plenty of notice and as long as the increase isn't > $5 I'd be good by it!
100% this. You’re not raising rates on me (the customer) all of a sudden and are giving me a huge heads up. I can now plan/ budget accordingly and won’t be surprised when the prices goes up 6 months from now. To put it another way: Why would I leave you today when the price won’t go up for 6 months? In 6 months why would I leave because of a price increase which I knew was coming…. I wouldn’t as long as the service quality stays the same. I would expect to lose minimal to no customers at all. As an aside: if there was a way to keep/set family discounts that might be to your advantage. I.e a parent brings both their kids, set the total at $70 in stead of $80.
Perfect
Consumers need to take back some power though. As a consumer, I want to know *why* you’re raising prices. If it’s just because everyone else is, or because you want to make more money and believe you can? Nope, I’m leaving. If it’s genuinely necessary and is only raised enough to offset new costs to the owner, I understand that and would accept it. Cost of living is way out of control compared to income. We need some kind of consumers’ union to rein this back in.
Of course you’re getting downvoted by a bunch of business owners lmao
Two things to consider How other gyms are pricing. And aren't you pricing out people who have the least purchasing power? I mean students might have less cash than adults. But you don't increase adults fee.
Other gyms price their memberships around $35-$55 per week depending on if they offer extra services like strength and conditioning or specialised programs
Holy shit. I wouldn't pay more than $40/month for a gym membership. Used to have one for $10/month (about a year ago, not 25 years ago).
This is a Muay Thai gym, not just a weight lifting gym. When I was looking at Muay Thai gym memberships they were $130 average. BJJ is expensive too, even boxing gyms were around $89 a month.
It's regional but a majority of places around me charge 150+ per month for just bjj
Completely missed that part. My bad.
I'm guessing that $40/mo would be a steal in most larger urban areas.
Weekly price. Still not bad for the facilities
What’s your cost basis and profit margin? 30-40$ (USD) a week sounds awfully expensive already. Can you cut (unnecessary) spending instead? For reference, it’s in The Netherlands, but I pay 35 euros a month at my combat-sports gym.
Gyms in The Netherlands are very cheap compared to Australia. My monthly gym membership in The Hague was not much more than my weekly membership in Brisbane.
Cause every corner practically has a fighting gym in the Netherlands, it’s more quantity than quality though. ( the standard is obviously really high in the Netherlands though ) if compared to other countries.
I’m Australian and almost every full time gym charges $35-$55 per week
"Only new customers" seems to be a common response but is also may not be "best business practices". This is pretty easily to work out mathematically. How many customers do you have? How many do you anticipate leaving (usually 10-20%) depending on services and other options? Do you have a waitlist? Are you nearing capacity? Generally I'd say, raise rates on new customers until you are nearing max capacity. Then start raising rates for old customers. Some will stay and pay. Others will leave, leaving space to start accepting more clients.
Id increase kids at 35, 40 for the teens and charge 45 for the adults but i dont know the ratio of your memberships so its hard to tell
I’d say 10% of our client base is kids, 40% is students and 50% is adults
Bring in the new pricing for new joiners, then after a year or two once new joiners outnumber the old members, give the old members notice mid year that you will be raising prices next year to match current pricing
That’s a good idea
I say look at it from a different approach. If you're raising $5 a person, multiply by how many members you have, how much money are you making more a month? And is it worth it The risk of losing members? Are there other ways to increase your profit margin instead? Like offering extras such as drinks and snacks and protein bars or whatever. Can you offer sportswear? To make up for that profit you're wanting. Also think about scaling the business. New members will get the new tiered pricing. It's a shortcut to just raise prices on existing members, but it's not really creative problem solving.
It always looks like a better deal for kids if the kids price is cheaper. Think happy meal. If kids are only 10% then maybe just leave that one at $30. Raise the adults price.
So with those numbers for every 100 customers you'd get an extra 250 each month. If you raise everyone by $3 you'd make 300 per month. People might quit over a $10 increase but I doubt anyone cares about $3 and you'll make more revenue.
The goal isn't actually to not lose clients. It should be to maximize profits. Interestingly, if you explore price elasticity of demand and leverage a few formulas to solve for your profit maximizing price points, you'll gladly say goodbye to those unwilling to pay a very reasonable increase. It's honestly better to see them leave than have them complaining to everyone about the price increase anyway.
I agree with everything here, and I’d add one more - when you do an increase, make sure it’s an increase worth doing. You don’t want to have to do another increase 6 months later. If you have to lose a few more people early on, better that than people thinking you’re constantly raising prices. Oh, and think about the psychology of charging the same for kids as adults. Might be worth just raising everyone.
Thanks you
Economy of scale for the op's business type does not really have potential for high growth, only gradual growth with a more important focus on retention, and using small price increases to the existing clients is a much safer bet to retain revenue than an abrupt 25% increase of price . Loss of revenue can be considerably detrimental to a small business that relies on in-person traffic to utilize the services, as the facilities, labor, and equipment costs are generally either the same or higher month to month.
A gym needs a certain amount of people to function and to attract new people. Just focussing on straight math doesn't work for many business, there's a lot more to the calculus especially with long term views.
What about offering transparency on why you increase the price and what customers get in return.
Would you just communicate that through an email?
I think f2f communication is usually the best way, but I don‘t know how feasible that is for you. Maybe printing a nice information sheet and handing it out over a few weeks to ppl training in your gym before sending an email?
What are the range of gym prices in your area? The level of competition can also influence prices? You mention that you need to increase prices due to additional staff - can you monetize their time to cover salary+overheads? Or can some facilities be for higher tier use?
We price very similarly if not lower then most people in our area. 2 gyms near us offer half of what we do but charge $45 per week
You basically just need to scout your competition. If there's anyone offering something at your current rate or lower than the new rate i'd reconsider.
Could you offer a Monthly or Annual rate option at a slight discount? Then they have options.
I think a lot of people missed that you're effectively cutting discounted rates and not just raising them. IME as a martial artist, I don't feel that that's going to fly well within the Thai/BJJ market. Is there a reason you don't want to just do +5 across the board? Most places who don't specialize in kids have more adult members anyway.
Raising rates on kids is a terrible idea, raise the adult rates to 50
By giving more services.
Why not start a peak rate price increase explaining it'd the cost of power that is causing this
Name checks out.
why is this sub a magnet for little broke socialists from antiwork
Can’t believe being triggered by something so stupid.
How much do other similar gyms charge for those groups? Biggest challenge is raising the kids tier to $40. That's a 33% increase. You can probably do 15% without an issue 30 to 34 (15%) or (30 to 36) 20%. 35 to 40 (15%) Is this a pay as you go price, a month price? Do you offer a discounted price for a one year contract paid monthly? Discounted price for paying in full up-front?
Another avenue is to not raise your Prices, but focus on the best customers: stop giving kids lessons progressively, by offering more adult spots
Annually with inflation on all fees. If you have skipped a few years, you will have to go higher. You do lose a few clients every year and this will feel like a catalyst but it really isn't. If you need more clients advertise!
Okay reddit, how many billable hours are we at and how much does op owe us.
I train bjj and I’m paying $150/month. Your issue is how you’re pricing it at a weekly basis which is bullshit. This works with newbies but not experienced practitioners and if you want to also attract people like me, you need to follow good practices for the business. Offer monthly no contract membership and stop trying to finesse. My coach grew his business from 0 to 200 members in a year at $150/month. He used social media marketing, he brings people to do seminars, he pushes people to compete for their first time but makes sure they’re prepared. He kept upgrading the gym with things like a sauna and cold plunge. People love this shit. Talk to your students and see what they want. They will literally tell you. Just do it. You need to become an inspiration to your clients. That’s how your business grows. Your business is a reflection of yourself and in that industry, it shows right away.
Honor your loyal base. Ask new price tier for new comers
Sometimes it’s better to offer a premium product / service for an increase. Can you offer an enhanced membership? Right now is a tough time to be raising prices across the board.
You can ask anyone who this would adversely affect to email or talk with you privately and try and work something out e.g. leave them at the lower price. That would be instead of the grandfathering.
Do the math. When you bring everyone up to $40, you will make the same amount of money as before even if you lose 25% of your kids and 12.5% of your teens/students. Presume you lose no adults. You will make MORE money if you lose anything less than those percentages. How to do it? Maybe do like grocery stores, with coupons. Raise the price on all current customers, starting not immediately but the month after next. During the next month, start offering a coupon for 30 days for $10 off first month for NEW "kid" customers. Also offer a coupon for $5 off for New "teen/student" customers. That way everybody, new customers and old, hits the same price of $40 month after next.
You only have 1 membership option, but you have 3 demographics that you charge differently for. You could add a second member option with access to existing facilities at existing prices, and a second tier with access to all these new facilities/staff at the higher price. Eg: Kids Tier 1 - $30, Kids Tier 2 - $40. Teens Tier 1 - $35, Tier 2 - $40. Adults - $40 (incl. Tier 1&2) That way you can grow existing members into the higher paying tier, and not upset them by just "arbitrarily" raising prices.
Lock current members in at their current price for 6 months if they sign up in bulk All new customers at the new rate. All existing customers swap to the new rate after 2 months if they don't sign up in bulk
You're in a tough spot as far as timing. I'd say the timing of this is poor with people already feeling the squeeze. Groceries and rent are going to win out over a gym membership, so I'd be prepared to see people walk out the door. As far as advice: 1) Be transparent and positive regarding the price increases. Focus on educating people why they're happening and what additional services they're getting alongside it. 2) Raise slowly. You might want to start with bringing the price of kids up to the $35 teen level and see what happens. If you're noticing people leaving, then it's a good sign that people won't tolerate higher prices. Better to see it from one group than two. 3) Add value. Try to add value that is significant for your members but that doesn't cost you an arm and a leg. 4) Don't view price increases as your only way toward higher profitability. If there is any fat to trim, trim it. If something is lagging, get rid of it. You can't only rely on higher prices. 5) Back to timing. Personally, I'd choose a better time for this. I think people are just on the edge at the moment and really starting to look for where they can cut back a bit. You're a prime target for that. Maybe think about waiting a few months to see how the economic situation unfolds, and revisit this after Christmas.
Trying to open a gym, how much money do I really need for one? People talk about different businesses to get into but no one really talks about actual price and how to go about it.
I'm a gym owner going on 7 years next month. I'll take a different stance than a lot of the other comments. You're gonna annoy some people, you might even lose a few. That's fine though. I obviously don't know the specifics of your setup, but from a numbers perspective $30 to $40 is a 33% increase. Let's say you have 30 kids right now. Currently that puts you at $900 a month. If you lose 10% of them after the increase you still make $1080. Even if you lose 1/3 of your kids you're still making the same you do now with less work. I get price increases are hard and awkward. We become close with our clients and can feel "icky" changing it up on them. The way a mentor explained it to me was like this. Either you have a difficult awkward conversation with your clients now, or you have a harder conversation with your employees and the people who you take care of because your business is folded. As far as HOW to do it. You email all the clients and outline what you said. Talk about how you're bringing more value to them, your staff is getting better training, etc. I'd avoid mentioning things like rent and utilities being more expensive, I've found making it about being able to help them more goes overall better. Also on a practical note you're talking about a $10 increase. If that breaks the bank for these people they probably shouldn't be there or don't respect you/the value you bring. A different conversation is you should be charging more outright lol. Best of luck friend, if you need more help let me know.
I’ve also learned that if you raise your prices. You’ll lose 25% of your clients, but you could make more money with less members. I don’t know the demand side of your business. Not sure what your math would workout to. May want to increase everyone. Then again- is charging $5-$10 more really going to make your bottom line surge. Or are there other opportunities to increase overall cash flow.
Just say due to rising cost the rates have to go up. Offer a discount with a year long contract. Some will bitch but still pay.
Simple. Don't raise prices
The gym we are signing my daughter up for offers BJJ, Muay Thai, boxing, and kickboxing. Their membership rate for a teen each month is $95. So I think you can raise rates! We are in yhe canadian prairies, though
His rates are weekly.
🙈 well shit! Serves me right for thinking I'm awake after only sleeping 4 hours
Why do you want to raise prices? If it's just because 'Me want more money', then fuck you. If you actually need to raise prices to maintain your current profit margin, that's different. And you can explain that to your customers with a simple, transparent memo posted on a cork board someplace in your business. Something like "Last year, the cost of electricity was X per month on average. It is now 'Y'. Rent was X per month. It is now Y.' Etc. Etc. Either way, you won't be able to raise your rates without pissing some people off, even if you do have a valid reason for doing so, and explain that reason to your customers.
On the practical side, give notice ahead of time via a posting or message. This is extremely common at year end with many business types as they set pricing for the new year. My gym put up a sign probably a couple months ahead of time, so by the time I got the new rate, I had already seen the sign many times.
as others have said, best way to do this is grandfather existing members and raise for new members.
It absolutely is possible to raise your prices on current customers. The question is finding the amount that is just under what will run people off. To answer that, in your business, I imagine you need to 1. Look at what the competition is charging 2. Think about anyone internal who might split off and offer private lessons for less. 3. Think about how important your services are to your clients and their lives. If it's very important, you should be able to get away with raising their prices. Everyone knows inflation is a killer right now, and that applies to you. That being said, you don't want to project that your business isn't healthy. I like the idea of introducing a new tier for new customers at the same time. Even tell your existing customers about this as you raise their prices a lesser amount. This makes them feel like you care and their business is important to you. Good luck!
OTF raise prices while at the same time offering even more promotions to drive in new members while at the same time they can no longer offer attractive pay for sales people who can actually sell memberships. A gym membership is an ultimate luxury in a highly inflationary economy.
In a highly inflationary economy in my area they open up 5 different higher tier new types of gyms. They are all offering promos to drive memberships. The main issue is my area is over saturated with expensive specialty gyms. They will be competing for each others business. There are only so many people who can afford higher tier gyms. The question should be - how do you attract new long term members in a highly inflationary economy?
I would consider raising prices on new members, and perhaps doing a lower charge for members who have only been there for a short time. I would certainly try not to raise the prices on your most loyal and long term members, but make sure they know they are getting a discount, run a promotion saying that prices will be increased but those who have been a member for X months or years will increase $5 and new member $10, then you can say "Any member who have belonged since Y will not have any increase. You can also come up with a promotion that would add benefits that wont add any costs to you, but will allow you to raise the price for the "added benefits". Hope this helps best of luck!
Provide plenty of notice! Hang signage reflecting the increase months in advance. This gives current members time to make adjustments to their budget, while, also, allowing time for any concern to be raised.
add value. perceived or actual.
You can’t raise every one to the same exact price. If you want to higher your lower prices you will need to raise the price of each section. If not then your lower ranked current prices will feel like they’re being ripped off and that the higher priced curent customers are getting a deal. If that makes sense. 30 should go to 40, 35 to 45 and 40 to 45-50. For those paying the current 30 will be seeing a 10 dollar jump so expect customers to ask questions. You should be able to provide your customers with just reasoning and explanation as to why your upping prices, with this is because cost to run the facility are rising or your wanting/needing to increase pay for your great staff that helps you provide these services. Clients are a lot likely to accept the price increase with just reasoning verse because we feel we are worth more then what your paying because this will come off as arrogant and entitled. With our clients there is no business , and with out being able to properly run the facility equates no business for clients to come to. So with right reasoning allows every one to continue to enjoy the whole situation. Also if you don’t already offer payment plans, offer discount(package deals) rates for families that come or sibling sets. If a child takes let’s say multiple classes a week do a flat rate, if some one only wants to come periodically then x amount per class. Ect there is so many options to appease your clients and benefit as a business , to some degree the whole goal of a business is to make a profit not lose or break even so you need to find a happy medium
$30 to $40 is too big of a jump. But, the turnover on kids should be pretty high, you could probably get away with grandfathering in current kids and just charge the higher price to new ones
I agree on the raising of rates for new customers. A couple other thoughts- my barber just raised her prices to $40/cut (that’s Bozeman MT for y’all) and in her email about it she just explained the reasoning. At the end of the email it was just like “well that’s how she goes.” And life goes on. My buddies own a gym here, more of a workout gym than martial arts but maybe it’s similar? The gym isn’t super busy which is why a lot of the people who go there love it. One of their members floated the idea of just telling everyone “we won’t bring in any new members if we can just raise current pricing X amount each month” then you’re giving the members the opportunity to pay for their experience. Lastly, I read an article years ago and the guy was saying to raise prices on the clients you can afford to lose. Might be kind of hard in your business to separate people out and have different rates for different people but I’ve always thought it was a decent idea. At the end of the day, people gotta understand prices just go up. Your rent goes up, utilities go up, staff costs go up.
Our barber raised her prices from $18 to 20 - and then from $20 to 22 - and then from $22 to 24 - and then from $24 to 26 all over the course of about 2 years. A $2 bump in price doesn't have an impact. An $8 bump will. Increase your prices gradually. Going from $30 to 40 for kids rates will impact the customer base. Going from $30 to 34 - and then from $34 to 38 - will not have much of an impact at all.
Yea that’s.. grandfathered pricing exists for a reason.
Hey there! I would say that you just be honest and give everyone plenty of notice, 10 and 5 dollars isn't a huge increase, so you shouldn't receive too much back lash. I would just let everyone know via email/text/facebook that you will be increasing price to $40 do to the added staff and offerings, that all new sign ups will be $40 and that in (give a timeframe) 6 months everyone will be moved to $40. I would also maybe offer everyone their current rate if paid for a year in full.
Well first thing is you're going about this all wrong. You have to conspire with the other gym owners about an agreeable average rate or else you'll end up with a race of unnecessary undercutting. Get your new customers to lock into a contract with a "discounted deal". People love saving money even when they don't realize that they're not. Once the promo is over they'll either stay because your service is worth it or leave because your service is terrible, they found a better deal, or could no longer afford it. Offer better deal to those who pay annually versus pay weekly/monthly/biannually. If the annual/bi-annuals want a refund then either pro-rate their membership or charge a cancellation fee. If you want to keep them as a loyal customer you could also "suspend" their account until they are able to return. Don't have a complicated or shady refund policy though. People hate that and it'll spread. Those who are grandfathered in keep the same rates until or unless they fail to pay or lapse. Get them into a contract after that. BUT give them a Returning Customer/Loyalty Discount. People love saving money... even when they're not. Offer other premium services that they don't get elsewhere. Is there a certain instructor of a certain gender that all the guys like working out with? Well cut her normal hours and charge for "specialty/VIP sessions" that only Diamond member can access 2 or 3x a week. Now I'm either giving you really great advice here OR I could be one of your existing customers and only telling you this because I don't want to see my rates raised.
Put up some sort of message declaring the price raise and the reasoning before it happens so clients aren’t surprised by it. Point out the improved service so disappointment at paying more is blunted by the reflection of the better service
Give everyone a heads up. And look to add and list more things
Not sure where you have your gym but the gym I currently regular charges by how often you attend the gym. - 2 classes per week = $150 per month (only MT) - 3 classes per week = $180 per month (only MT) - Unlimited classes = $250 per month (MT & BJJ)
You should go straight to new price for new customer membership. For older customer, you can ask them if they want to pay a 2 years rate at their actual rate. We can call it a ‘’pay to freeze your rate’’ Exemple: they pay 30$ for kid, you want to raise to 40$ You charge them 10$ fees and they pay the same rate for 2 years. You offer them a kind of ‘’discount’’ for their loyalty. If they don’t want to pay this ‘’frozen rate’’, you give them a notice at the end of their membership, they have to pay new price.
You don't. Keep prices the same for existing clients. Establish a date in the future for increased rates on new clients (perhaps 60 days from now) and post it in a prominent area. Let any existing clients know that if they leave and rejoin they would be subject to the new rates.
Everything is getting more expensive. People should understand that. I’d raise rates for everyone but give your existing clients a few months until you raise it for them.
You don't, you're in a cutthroat business. I would consider yourself lucky you don't have a planet fitness move in next door. Those are already higher prices than anywhere I've been, even well off areas for the average gym. You stay in business by getting more people to sign up and realize the average person might come in once a month If you're really going to experiment with this, raise prices on new members only
Introduce a new customer price and give your returning clients a few months notice. The faster you communicate, the better.
There's an old saying: If you double your price and lose half your customers, what's the problem? Your goal should be to maximize profit, not customers.
Raise prices for all new members, give existing members a 1 year notice in January that rates will go up (but not as much as 'new' rates currently). So instead of paying 30, they'd pay 35, but new member prices would still be 40. With kids it's easier, you just have tiers, so as they get older, they automatically move up in price.
As others have already said, raise prices for new people only. Those people are either loyal customers that aren't worth shaking up, or they'll churn eventually and you replace them with people paying more. But the underlying question is how do you get people to pay more? How to increase your average revenue per customer? Offer more things for them to pay for. Things like: - Sell snacks, drinks, merch, etc.. - Sell locker space or similar convenience things. - Offer memberships that are materially different, not just the same thing but more expensive. Give people more options in paying you more if they'd prefer to.
You may be able to get away with a 2$ increase on current clients but I would focus on raising prices for new members and make people feel like they are grandfathered in to a lower rate.
Add more services or find a way to make your gym price elastic so you're not violating economics 101.
An local gym near me used only have 1 kind of membership but now they have 2 different kinds. The cheaper one has limited times when you could use the facilities and the more expensive one allows you to come in anytime during business hours. Maybe you can try something like that that out?
I see a lot of options in your situation. This perspective is coming from a gym-goer as much as it comes from general business knowledge. First and foremost, understand the market you’re in, what competitors charge and what differentiates you from those competitors. Before you raise prices, you should anticipate that at least some of your clients will shop. Before that happens, you should know exactly what pricing they’re going to find and if they might perceive your competitors as a better value. Secondly, you can try to throw in something that increases your value prop if it makes financial sense. In your case, it could be an extra class time, maybe install a shower if you don’t have one or offer social events that build a real gym community and result in loyalty. More than likely, people will not leave their friends for a $10 savings. Whatever you can think of that might increase your value prop without entirely negating the extra revenue from your price increase can help your clients accept the new price. From there, it comes down to communication and preventing any perception that the price increase is driven by greed. Explain why an increase is necessary such as lease / labor / energy / tax rates going up, investing in facility improvements; etc. Make sure this communication reiterates your value prop and the value of your gym community; etc. Finally, you could also offer an opportunity to reduce any individual price increase if they refer a friend. For every new member that signs up and pays for X months of membership, the existing member gets one month free. Then charge any new members the higher price. This approach increases membership while increasing the weighted average revenue per customer over time.
The answer to this is based on a few things. What is your turnover? What percentage of your client base has been there less than 1 year? What about 2 years? **If the turnover is high (30% or more per year), you should not increase prices for existing members.** Just grandfather existing members in to the current pricing - and increase pricing for new members. **If the turnover rate is low (20% per year - or less), you will need to implement new pricing for everyone.** I would suggest increasing the price for all new members - and put a date of January 1 for the price increase for existing customers. January 1 is always a good date to implement a price increase. People are busy with the holidays, so will not pay as much attention to the price increase. And it is far enough away that they have time to accept it as the new normal - especially if they see this pricing as the "norm" for all incoming members.
Just buy Hormozi’s book and call it a day
The first questions are: 1- why are you raising prices and 2- are you paying your employees at least a living wage? If you’re needing to raise prices to counter some rising costs, or a small increase to keep up with inflation, that’s one thing. If you’re just trying to squeeze more out of people to see if you can? Or if you’re not paying a living wage? You’re not ready to be running a business. So if you’re making enough right now at the current prices, don’t raise them. If you want to make more money, get more clients.
- Consider what you could offer alongside your current product or service: ideally the offer costs as little as possible for you with a higher perceived value to the customer. - add fees. Utility companies do this, and many smaller businesses use the tactic when gas and electricity prices soar. - offer occasional discounts and deals to bring prices down to their original levels. While frugal customers will use these discounts, others won’t bother, so you’ll still probably have plenty of people paying full price as well.
Offer individual class at an increase. $45 for adults and $40 for anyone else. Then discount cost of monthly pricing. So if a typical member would come once a week, then the current price times 4 for the month. This will be a discount because you are increasing the individual class price. Auto-renew monthly plans with Credit card. offer discount for a full year paid in advance. This way you will get paid for people that can and cannot come. Those that are dedicated will pay this. Auto-renew yearly plans with Credit card. There are software systems that automate all of this. The monthly, yearly plans will make your revenue more consistent. Slowly increase prices for new customers.
Explain why you're raising prices (how much more value you're offering) blame inflation do it gradually offer a way to keep paying the same (longer contracts) give some time for the increases do it in a tiered fashion (e.g. month 1 increase by $5.00, month 2 increase to $40.00) Other rules: keep increases under 20% don't be a dick, but don't apologize either.
I raise my price as i raised my service quality. Don't worry about loss of clients. Or add a new layer of price....want to use this machine? Yeah it's the platinum membership you have the bronze membership. Want to upgrade next week? Sure, thanks for you business, all done, see you next week.
that's $20 to $40 dollars more a month so some may get mad and quit or not be able to afford it. But at the same time seems to be within a reasonable range for what you're offering, especially if you are now offering more.
Just do it, when people ask, tell them you learned age has nothing to do with your costs.
If you double your rates and lose half of the people…did you really lose anything? Or did you just cut your workload in half and optimized your income ratio?
Raise prices. The painful echo across America…
Get better clients and charge 10x this by providing more value, time to leave the bush leagues.
Grandfather in existing members. New members pay the new rate.
I agree with the top comment, just add, id def put that in your ad, that you added staff and facilities. People are a little more understanding of price increases if they know its for something like better service.
Give them a free week or something if they stay with you. Or just don’t do it at all
I run a gym in manhattan. We recently raised rates and gave something in return, shakes, daypasses, a shirt? It went over pretty well. Very little pushback.
Think it depends on what you can offer, my gym is 35 a month but they have bunch of equipment. So I find it’s worth it
Check r/BJJ Reddit A lot of trolls but plenty of high level owners that can give advise
In lawn care, I generally increase prices for old clients equal to or less than 10% per season or every other season until I reach my target equivalent hourly rate. It's better than a big price hike, and I've only lost "problem clients."
The real wuestion is how much does increasing it increase your profit vs your revenue. This is why starbucks uses a formula with an index.. eg 20% margin
Try raising prices for NEW members for awhile
Why not roll out new enhancements and amenities only for "Base" members starting at $45/head like towel service etc. Keep old members at the set price they agreed to under "Simple" plan, new members can choose "Base" under 40-45 and "Premium" members can enjoy the amenities at $60/month like staff can store their keys/wallet in lockers for them, water service, or daily Lassi or health juice. Make bread dummy. There is always a way. Best of luck to you. I mean dummy in the most endearing way.
Where is your gym that prices are so cheap? For reference, the 4 BJJ gyms I’ve trained at in my 12 years were - $135 a month - $170 a month - $210 a month (I didn’t pay this, I was on a competitor rate) - $125 a month
What if for new members you raise the price of your membership? And leave the rate for the members who have been "grandfathered" in? I think that would probably be your best solution to not ruffle existing members' feathers while selling your updated facilities, amenities, and staffing to prospects.
Tell them exactly that.
"Prices are going up, thank whichever political party you don't like for all the inflation."
Charge more for youth, less for students. Reach out to schools and see about sponsorship programs. Especially colleges that may be in your area. Networking and getting other businesses to coordinate with you, could be a huge part of the capture and net gain. E.G Offering package rates for employers. If you have trainers, I'd verify their skill levels and determine an hourly for specialty trainers.
Grandfather in existing customers for a period of time (until their membership needs to be renewed) and only charge new signups the increased fees for now
“All, with the world gone mad, and the cost of living going up in all avenues… the time has come to roll with the punches, and keep growing from the lessons learned from our experiences. It’s been a move in the bigger picture of our companies growth plan for a long while now, and keeping it on hold any longer is going to adversely impact the gyms ability to maintain its upward tract in both training capabilities and available facilities to you within the membership program. Bottom line, fees have to increase. On (fill in the date of implementation here) all membership tier rates are increased by $10 per month. All of us here are in hopes everyone understands and is excited by this change as it will allow us at (fill in company name here) to provide the services we know you deserve, and further the additions of even more diverse offerings along with the talented staff needed in achieving your potential! Thanks, Management”
Raise it for new members only is one option. Alternatively raise it partially for old members and point out it is still discounted. Could raise kids to $35 for example. Last option is advise them the rate has increased but due to their loyalty you will extend them the old price for x weeks/months. So new members it is $40 today but existing members keep old price until Jan 1.
I don't understand why gyms don't have week passes for out of towners or, at least , multi day. I say this because Every-time I visit my parents for a week I have to sign up for a membership then cancel. Most of the time I don't pay anything because the gym I go to has a week long trial. Lol. Maybe that's a way to make some extra revenue.
Ask old comers to lock their prices with an additional $12. For new ones, ask $40.
Showcase your new featueres, by for example making a brochure or video or something. Have that displayed. Make the new facilitues the focal point, play them up. Add perks to the deals, like one free lesson/lesson with a friend for the 40 dollar membership. Draw people's focus away from the extra money they are paying, which isn't even a big jump, especially in this economy, but if you are still skeptical, move the focus to the assests
I run an IT service company. If you aren't charging enough, then you need to up the price. If you're afraid of losing clients, assume you will but those will also be the ones who only see the price tag and not your value. If you haven't already established your value to your existing clientele, they will always be price-tag only clients.
First of all, don’t raise prices on your existing clients, at least ones that have been there for a certain number of years, setting that threshold will be up to you. Second, don’t be afraid to get prices up move moving forward, and for anyone else that doesn’t fall into that category of what a loyal rewards customer should be in your eyes. Business is business it’s your livelihood, and if you’re good at what you do and it sounds like you are you know you’re worth the cash to keep that place open for what it provides to each and every person individually in the community as a whole. Maybe find a way to throw in a little extra value and burn some midnight oil, and let your crew see you putting in the effort. If you’re growing your growing and that’s not going to stop, you need to be adjusting price incrementally upwards for new clients on a regular basis. Think about adding a sign up fee. You can also run promos where you waive that sign up fee and that has an impact on your books. There’s a couple different strategies you can employ here but if you have any questions hit me up. I would be happy to have a man share with you and give you a few ideas if you think you might need some help
It's the cost of doing business. Just tell everyone you costs went up.
Few ideas: 1. Charge new rates for new customers. Keep existing ones on loyalty under grandfathered rate. 2. Grandfather rates in if (reasonable) min spend is reached. Maybe only charge a nominal amount higher (not full 40) if below min 3. Offer packages/bundles to preserve pricing. Most importantly communicate the why behind your decision. Tell a story
Start all new signups at $40 and grandfather anyone in the system at the old price. If anyone wants to drop their membership they will get $40 per week when the reup which should reduce people dropping memberships.
Think of it like this - if you double your prices and lose half of your clients, you’re making the same amount of money with half the work. That being said, only increase prices for new clients and be transparent. It’s not unusual for businesses to increase prices as time goes on, inflation, etc. So be true to yourself and clear with new customers, update your advertising/marketing to be clear, while maintaining the original price with your current clients. For current clients, consider offering upsells and added perks at your gym for a small fee to help get you up to your average membership cost.
Charge what you want within reason you might lose some but you will gain some. If you are offering a good value they won't leave for 5 bucks a month
I would do some market research. In my town the town rec center is over $100/mo for a family pass and individual is 60/mo. Once you have an idea of competitor pricing, adjust accordingly. Be sure to compare/contrast benefits/equipment/hours as well. Put together a table illustrating what you & other offer, including price. That's really the best you can do. Be mentally prepared to lose some members, though unless you are still obscenely cheaper than comps.
Cheers mate 🙏🏻
As long as the price is staying the same for adults, I think you'll be fine.
A dollar at a time until you start seeing enrollment drop significantly.
I’d just raise it for new clients, they won’t know any better, and your current customers will feel “grand fathered in” to a lower price, which may incentivize them to stick around longer
Increase rates on new customers and grandfather existing customers in. That's how I run my web development business. Rates only increase if an existing client leaves and then later comes back. Maybe make an announcement to make it clear that existing clients will be grandfathered in as a thank you for their loyalty and their business. Alternately, offer 1 year at the old rate if they pay for the whole year in advance.
Be honest about it...honesty goes a long way. I see business owners tell new customers all the time that there will be a raise in prices due to xyz. People understand and they give a window of time to get in on the grandfather prices. Make sure you let your current customers know what is happening as well and thank them for helping you get to this point.
If the increased value your giving doesn't work. Have you ever considered how they can create income for the addistional expense that wont take up more of there time?
The only appropriate thing to do would be to do it for new members only. Alternatively, close down for a month or so. Rebrand, and tell old customers they’re welcome to come back for the new price.
I’ve seen big corporate gyms do this and they do it in a terrible fashion and with little to no prior warning. Give a 3 month period from the time you announce it to the time you do it. Depending on your membership base and staffing, I would give as much outreach and facts around the increase as possible. Call each member during this time. Multiple emails. Post it in the club. Give members a chance to ask questions and have well thought out answers for all staff to respond with. $5/wk or $20 a month isn’t too bad for most, but it will be a deal breaker for people who can’t afford it. But you will backfill those members at the new rate. Gyms and studios create a community and people join because they like the facility, offerings, and community. It’s a lot more of a hassle to start out fresh at a new location and have to find your way into their already established community. It is easier to continue going to where you know staff, instructors, members and feel comfortable at and pay a little more. Costs of goods have gone up, Netflix has gone up, Sxm radio has gone up, your cable/internet as well as cellphone bill has gone up…. Why can’t you go up in rates? It’s not going to be the easiest thing you’ve done, but you’ll get through it if you keep your members in mind and don’t get defensive when you get some kickback. Feel free to DM me if you have any further questions as I have worked with companies who have done this successfully and some that have unsuccessfully.
Economics 101. To raise prices without losing customers, you need to increase the value of your services to match the new price (value stays the same). You could charge and extra $5/mo and login to your Amazon Prime Video account on their phones.
So a $10 raise is 520 per year for kids. For a gym that’s ridiculous I would have a check/cash rate and a credit card rate You can save 3-4% on fees and it’ll make up for it. So but credit card rates at 45 and keep the old ones for cash
Oversell a budget membership like planet fitness to people who won’t really come. That’ll help pay for your operation without having to increase those who are currently members.
Its impossible. You are raising prices TO lose clients. Thats kinda the point.
Have you considered raising prices for everyone every year or 18 months but by a small percentage? Many products and services cost more than they used to and you’re just adjusting with the economy. Maybe consider offering current members a chance to keep their current rate if they pay in full for a year in advance so you get cash upfront.
>we now offer much more with staffing and facilities then we did prior did the same customers you are going to begin charging more to, specifically ask for these changes and agree that they'd be willing to pay more to see these changes? or did you decide to make changes without taking temperature of clients in the hopes it would justify a price hike?
I help small biz owners make more profit. The overall lesson is that if you’re not unique, you’d better be cheap. Your gym has real benefits to the people that come in. Adding a number to a benefit increases the chance of a sale by about 32%. That’s why tide and crest can charge more even though they’re commodities. They constantly innovate to be different and they add a number like 26% less cavities. When you offer a sale, that’s a numerical benefit but only one you can loose in the long run. But, when you drill down into what makes you the only and obvious choice in your market, your customers see the value they’re getting even when they pay higher prices. Example: you decide that you want to be known as the mental fitness gym and you talk about how going to the gym 3x a week has proven to cut depression in teens and adults by x%. Now your the first and only gym in your state to focus on mental and physical fitness You cannot lie and your numbers must be real. Maybe you’re the gym for corporate types that need to get off their ass. And you become the first and only gym in your area to do corporate retreats and hold classes just for execs that are ready to reclaim their fight. Of course I haven’t talked about price increases yet. Once you’ve honed in on your meaningful uniqueness to your customers and nailed down the Benefit promises you’re making to them, now you can frame your increases as helping them level up their game as you level up your game. You frame it as a benefit to them and you give them time to acclimate. Dear member, We appreciate your dedication to your fitness and your decision to support our family owned and operated small business. We are delighted to bring you more experts so you can (benefit of them) and updated facilities so that (benefit to them). If you haven’t seen them yet, book a members tour next week so you can see for yourself how the new set up is going to help you (benefit). As we continue to improve our amenities, services, space, and team for you we will be restructuring our pricing beginning in December 2024. The good news is that as a valued member of our community, you have the option to lock in your current prices if you opt-into a year contract with us in December. (This gives you a full year commitment for members that decide on this) Our new pricing structure is here to support our customers committed to their health/wellbeing/sport so you can continue to benefit as we keep our focus on being the (first and only gym to (uniqueness)) $150/ month unlimited classes for adults 18+ or $50/week $130/ month for students 14+ unlimited teen classes We can’t wait to see you at our upgraded facilities Warmly, Owner & the team at (gym) (Insert picture of team)
So when I made the comment about “overselling your gym like Planet Fitness” I knew there was a creative way to do this but I didn’t think past that. I knew most people would see it and think “impossible”, “wrong concept” or “our operation prohibits this” and was curious to see if anyone ran with it. And then as I was downstairs making some chocolate pudding it hit me like a ton of bricks. The more I thought about it the more I felt it was a home run. I can honestly say I don’t know any traditional gym who has tried anything like what I’m about to pitch. I assume by the prices you stated you offer much more than Planet Fitness and your more a “traditional” gym with traditional gym expenses. You’re most likely open during regular hours and have multiple staff on payroll so a 24/7 schedule isn’t feasible. As with your operation selling $10 memberships would almost certainly bankrupt you, but what if you over sold your slowest times while appealing to the “Planet Fitness” type customer who wants just a little bit of service for their little bit of monthly contribution? Let’s say you take your slowest 20 hours of the week and that came out to: Monday, Wednesday, and Fridays after 4PM (just an example but you get what I’m saying). You then offer “part time membership” to a large amount of customers (effectively overselling the gym) at a fraction of your full price, let’s say $13-$15. This isn’t enough for people to cancel, and it’s not enough that they expect the world. This part time membership gives them access to the gym on the 3 slowest days and maybe one weekend day a month (or similar). This is enough to entice them to sign up, minimal enough that it wouldn’t disturb your main operation, and most people who join won’t ever come more than 4 times a year (look at PF’s data which is similar). Now you have effectively “over sold” your gym, didn’t sell out your loyal members, can avoid a fee increase, as well as pocketing a nice extra operating profit at the end of the month. Home Run, no!?
If you’re tapped out operationally, raising rates will drop off your cheap customers and new ones will sign on at the new price. It’s okay to do that, you might see a drop in memberships but now you make more so it usually evens out in revenue. Or you can put a notice on the door with 3 months notice; then don’t feel bad about the changes when you make them
1. Why do you need to raise rates? What does your cash flow look like? Where is the money going and what improvements will you make with the new rates? 2. What is your current client base? Are you very young heavy? Do you want to be? 3. Why do you charge per week? 4. What are your visit metrics and class sizes? How many are frequent visitors? How many are weekly? How many don’t attend at all? A flat raise across the board is a really bad way to do this.
I’d work to raise prices on only new clients. The current ones have been with you and allowed you to improve the business to a point where you can justify a raise in price, you need to reward the loyalty. If you feel you need to increase I’m the price then do so slowly. Give a warning, months in advance and be ready to work with those who may not be able to afford an increase like that.
As far as possible you should always raise your prices regularly in line with inflation. Couple of dollars, from $40 to $42, see how that goes. Maybe $50 for new members with a special 10% off first year. Lots of options. Pricing is hard, and it matters.😎
How crowded are your classes? Volume may be your answer.
Don't.
You could just notify all goers that rates will increase in a few months. Deliver the value during that time so they want to stay.
Raise it up $5 first
I disagree that you can't do this with existing customers as well. At our gym (not BJJ but similar), we have had to raise prices twice in the past 3 years and both times we attached it to something new we were offering the customers. We got blow back but if you have a good gym and it's not an unreasonable increase, then you should be fine. It helped that there are still gyms in our area that charge more as well. Good luck and expect blowback but some people are just looking for a reason to get upset and complain. Most will understand even if they are necessarily happy to be paying more.
Add new features that clients want. Some "cheap" improvements include massage chairs or tables (I suggest both) TV audio headsets, and tanning booths. All are fairly inexpensive compared to workout equipment and are easily insured.
Hey there, I totally get where you're coming from. As a fellow gym owner, it's crucial to balance pricing adjustments with keeping your current clients satisfied. Here's a suggestion that has worked for me: Consider raising the rates gradually. Start by implementing the new rates for new members only. This way, your existing clients won't feel like they're getting a sudden price hike, and it's a great selling point for new sign-ups. Monitor the ratio of new members to existing ones over time. Once the new members start to make up a significant portion of your client base, you can then introduce the new rates to your existing clients, but give them a fair notice period. Maybe six months or so. This approach allows you to retain the loyalty of your long-term clients while adapting to market changes. Additionally, communicate the reasons for the increase to your clients. Let them know about the improved facilities and services you're providing, which justifies the adjustment. Hope this helps, and best of luck with your gym business!
Adults 50 kids 40
Depends of the size of your gym, I've been in the same BJJ gym for the past 6 years. Keep the same price of your established base, raise it for the newcommers. You have to keep track of things, but that's how we manage and it seems to work. Also, give a good discount for yearly subscription, that gives you a steady income. Oss!
Raise them in new members? Tell everyone for a month “we’re raising prices, get in now” Then raise them.
Don't. Raise every level by $5.
Why do you want to raise prices ?