How to Price Your Fitness Services
What You'll Learn
In this execution plan we talk about how to understand pricing modules, the problems you might face, how to increase the value of your service in the eyes of the client and how to price your services for maximum profit.
Why is This Important?
When pricing your services, it can be very easy , especially if you are new to the game, to undervalue your service or at the other end, price yourself out of the market. That isn't to say you can't command a great salary from either option, but there may be a compromise to be made in un-billable time, looking for new clients if you're marketing your services sky high or working full time slogging it out and getting small financial reward for your efforts.
You must start to value your skills and services and be confident when pricing your packages. We will help you do this.
What You'll Learn
In this execution plan we talk about how to understand pricing modules, the problems you might face, how to increase the value of your service in the eyes of the client and how to price your services for maximum profit.
Why is This Important?
When pricing your services, it can be very easy , especially if you are new to the game, to undervalue your service or at the other end, price yourself out of the market. That isn't to say you can't command a great salary from either option, but there may be a compromise to be made in un-billable time, looking for new clients if you're marketing your services sky high or working full time slogging it out and getting small financial reward for your efforts.
You must start to value your skills and services and be confident when pricing your packages. We will help you do this.
A Short Story
There were two men who each opened a gym. Both had excellent equipment – far above the norm for their area.
Fifty or so years later, Frank’s grandsons were operating their grandfather’s gym and it was making a decent living for the family, the standard of equipment a wildly local success.
Paul’s business, on the other hand, went on to continent-wide success. His single gym quickly blossomed into an entire chain, and he retired a multi-millionaire.
While it’s undeniable that Paul had exceptional entrepreneurial skills and Frank didn’t, one important factor during the start-up of their respective success stories was pricing.
Surprisingly, Paul’s membership fees cost a lot more than Frank’s. This had nothing to do with his continent-wide success, but it had everything to do with Paul’s grasp of the market. If he had priced his membership too low or too high when he was first starting out, his business would never have left the ground.
Pricing at its most simplistic level is easy. The formula goes like this... Identify your:
And you should be able to calculate the perfect price, right?
Of course, it’s not that easy. Especially when you are selling not goods but services.
In this execution plan, we’ll cover the following topics:
Fifty or so years later, Frank’s grandsons were operating their grandfather’s gym and it was making a decent living for the family, the standard of equipment a wildly local success.
Paul’s business, on the other hand, went on to continent-wide success. His single gym quickly blossomed into an entire chain, and he retired a multi-millionaire.
While it’s undeniable that Paul had exceptional entrepreneurial skills and Frank didn’t, one important factor during the start-up of their respective success stories was pricing.
Surprisingly, Paul’s membership fees cost a lot more than Frank’s. This had nothing to do with his continent-wide success, but it had everything to do with Paul’s grasp of the market. If he had priced his membership too low or too high when he was first starting out, his business would never have left the ground.
Pricing at its most simplistic level is easy. The formula goes like this... Identify your:
- Costs
- Operating expenses
- Profit you’d like to generate
- What your closest competitors are charging
- What the market will bear
And you should be able to calculate the perfect price, right?
Of course, it’s not that easy. Especially when you are selling not goods but services.
In this execution plan, we’ll cover the following topics:
- Picking the best pricing model for your business
- Understanding what you should not do
- Gauging how much your time is worth
- Factoring in location (especially online!)
- Testing and pre-testing your prices
- Raising your prices
Step 1: How to Understand Pricing Models
Here are 7 industry standard common pricing models, that work well for personal trainers and their various services. let take a look at how they work.
1. Limited Functionality with Upgrade
Just a cut above a “sample” version of a product, this model relies on the customer wanting more features and voluntarily upgrading to the “Business” or “Professional” version of your product/service.
Works well with software or online services.
2. Tiered Pricing
True tiered pricing is actually volume-based. “Order two, get one free” is one example. “Three sessions for £80 or £90 separately” is another. If you were to turn this pricing model into a graphic representation, it would almost look like an inverted pyramid.
Tiered pricing works best with physical goods combined with multiple buyer types.
1. Limited Functionality with Upgrade
Just a cut above a “sample” version of a product, this model relies on the customer wanting more features and voluntarily upgrading to the “Business” or “Professional” version of your product/service.
Works well with software or online services.
2. Tiered Pricing
True tiered pricing is actually volume-based. “Order two, get one free” is one example. “Three sessions for £80 or £90 separately” is another. If you were to turn this pricing model into a graphic representation, it would almost look like an inverted pyramid.
Tiered pricing works best with physical goods combined with multiple buyer types.
3. “Razor and Blade” Pricing
This strategy got its name from Gillette, the razor company that first came up with the idea of selling the shaver for almost nothing and making money off the replacement blades. Online companies such as Skype use this model, where they provide the free software and service, but you pay constantly for credits and other extras. This is useful for online memberships to your health and fitness service.
And the most notorious example comes from the computer peripheries industry, where replacement ink cartridges almost equal the cost of the printer (e.g. the Canon Pixma ip2700 printer at $49.99. Cost of replacement cartridges at Staples? $28.99 for the black ink cartridge alone and an additional $35.99 for color – that would be $64.98, should you wish to purchase color and black cartridges separately.
And at $57.75 for a combo pack, it still works out to more than replacing the printer with a new one, which does arrive with ink cartridges included.
Yup, folks. Razor-and-blade pricing at its finest!
Freebie marketing is genetic mutation of razor-and-blade pricing. And, speaking of which...
4. Freebie Marketing
Most personal trainers are only too familiar with this model: Offer a free session/product that is perceived as valuable to the target customer or client, and be presented with upsells and “OTO” (one- time-only) special offers.
Typically, if the freebie product is a digital information product, it tells readers valuable details about what to do, throwing out enough “how to” to prove the vendor is the person who knows the secret... but only hints at how to actually do it.
The upsells provide the “how to”. The OTO provides added value (and sometimes status-boosting elitism).
A typical example would be a niche or topic-based forum, where the owner can use the ground-floor freebie level to pick up ideas, as well as establish oneself as a niche expert. The proven idea is that die-hard fanatics in that niche (the ones who eagerly buy) will not only want more exclusive privileges through a “Gold” or “Platinum” level, but also crave the status of becoming authority figures in that niche too.
This works well for the forum or membership site owner at higher levels, because these members often answer a lot of the “newbie” questions at lower levels – and take a fair burden of work off the owner.
Works well with online information products and systems.
5. Value-based
You can price more than your competitors if you offer higher-value – especially if that includes a unique service or feature your competitors haven’t been able to provide. For example, perhaps you include installation with your software package, while similar software sellers don’t. Or perhaps you include custom, original graphics with your ghostwritten blog posts, and competing ghostwriters don’t.
Works well with service-based businesses, as well as almost every other type.
6. Flat Fee
This model is often adopted by service providers – especially in today’s economic climate where struggling clients badly need fixed prices in order to stay competitive and make a profit.
Clients know exactly what they’re going to pay, regardless of the amount of work a program takes, so they can accurately budget their outsourcing fees (i.e. your pay).
An example would be someone who charges £500 for fitness package, or a nutritionist who charges £1000 for a lifestyle overhaul..
7. Hourly Rate
This is the industry standard for such businesses as web or graphic design, though many designers do combine it with the “flat fee” model, lumping projects that are easy – or that junior staff members can do – into packages. It’s also adopted heavily by PT’s.
What to charge for your hourly rate will depend solely on these unique factors:
- Your expertise level
- Your authority status and visibility in the industry
- Your industry, and what it can bear
- Provable referrals and recommendations
- Your already-proven results
- How well you market yourself
- How many clients you need
- What your competitors are charging
This last factor should literally be the last one you take into consideration. Research and look at prices across the board for your industry, average them out as a starting point. Then adjust this rate based on the first five factors in the previous list.
Step 2: Tackling Problems With Pricing Models
Pricing mistakes happen because business owners either don’t understand all the variables involved (e.g. not factoring supplement costs) or they don’t look deeply enough at the inherent pitfalls in various pricing models.
Here are the most common ones that personal trainers fall prey to...
1. Problems with Variable Pricing
One trap you’ll want to avoid is indulging in variable pricing. That’s what happens when you charge Customer A only £30.00 per session because she’s a hard negotiator, and you charge Customer B £35.00 because she’s happy to pay it and lets you know up front. (And it’s the price on your sign, anyway.)
Here’s what happens if you start down that particular slippery path:
Depending on whether or not Customer B is a marshmallow or a business toughie, you’ll get one of the following reactions from her:
You don’t want any of these situations to occur. If you do decide to use variable pricing, make sure you’re doing so from a solid business basis – not because Customer A is a hard negotiator and knows how to yank your chains. In the latter case, you’ll feel uncomfortable, but stick to your guns and think about the value of what you’re offering. (It’s your turn to feel a little insulted because Customer A apparently thinks so little of all your hard work and well-earned experience!)
A solid business basis would be when you are marketing mass- sessions. If Rob’s only wants a dozen sessions, you might charge him £30.00 per session to offset the time spent on such a small number of sessions: However, if Gwen orders 60, you can feel perfectly justified in letting her have them for £26.00 per session, because your financial security is offset by the large number of sessions.
This is also a true example of Tiered Pricing. What that should teach us is to counter Customer A’s hard negotiating by letting her know bluntly that she’ll have to increase her order or commitment, to gain that rate.
2. Problems with Flat Fees
There are two problems with this model:
And in both cases, you may find yourself losing money on projects through unforeseen problems that have to be solved (on your time), multiple revisions and cost over-runs you had no way of calculating.
The advantage of a flat fee, however, is that it does get clients through the door – especially if you post fees on your website.
If you do decide to use this model, try combining it with “packages” instead of flat fees across the board. “Package deals” – with a low cost but limited number of sessions or items provided – can be a wonderful way to get started and build your reputation along with income. And provide customized fees and plans for clients with larger budgets who don’t mind paying for more quality and a deeper level of service.
Your packages should always include:
Using a Client Contract is another failsafe you shouldn’t ignore – even if that’s just a simple email outlining and confirming the number of changes, what’s included, etc.
Here are the most common ones that personal trainers fall prey to...
1. Problems with Variable Pricing
One trap you’ll want to avoid is indulging in variable pricing. That’s what happens when you charge Customer A only £30.00 per session because she’s a hard negotiator, and you charge Customer B £35.00 because she’s happy to pay it and lets you know up front. (And it’s the price on your sign, anyway.)
Here’s what happens if you start down that particular slippery path:
- Customer A bumps into customer B (probably on Facebook!)
- They enthusiastically (or not-so-enthusiastically) discuss your session prices
- Customer B discovers she paid £5 more per session than Customer A
Depending on whether or not Customer B is a marshmallow or a business toughie, you’ll get one of the following reactions from her:
- Hurt feelings and silence. But eventually, she mentions it on Facebook, under the “right circumstances”. She will not buy again.
- She’ll be mad as all-get-out. She may or may not call you out directly – but she’ll sure broadcast it to all and sundry.
You don’t want any of these situations to occur. If you do decide to use variable pricing, make sure you’re doing so from a solid business basis – not because Customer A is a hard negotiator and knows how to yank your chains. In the latter case, you’ll feel uncomfortable, but stick to your guns and think about the value of what you’re offering. (It’s your turn to feel a little insulted because Customer A apparently thinks so little of all your hard work and well-earned experience!)
A solid business basis would be when you are marketing mass- sessions. If Rob’s only wants a dozen sessions, you might charge him £30.00 per session to offset the time spent on such a small number of sessions: However, if Gwen orders 60, you can feel perfectly justified in letting her have them for £26.00 per session, because your financial security is offset by the large number of sessions.
This is also a true example of Tiered Pricing. What that should teach us is to counter Customer A’s hard negotiating by letting her know bluntly that she’ll have to increase her order or commitment, to gain that rate.
2. Problems with Flat Fees
There are two problems with this model:
- If you tailor your pricing to struggling clients, you will attract mostly struggling clients – not the wildly successful ones
- If you do attract wildly successful ones, like it or not they’ll also be the sort who are greedy or savvy; not the sort who believe in fair value or drive a hard bargain.
And in both cases, you may find yourself losing money on projects through unforeseen problems that have to be solved (on your time), multiple revisions and cost over-runs you had no way of calculating.
The advantage of a flat fee, however, is that it does get clients through the door – especially if you post fees on your website.
If you do decide to use this model, try combining it with “packages” instead of flat fees across the board. “Package deals” – with a low cost but limited number of sessions or items provided – can be a wonderful way to get started and build your reputation along with income. And provide customized fees and plans for clients with larger budgets who don’t mind paying for more quality and a deeper level of service.
Your packages should always include:
- Time limits
- Number of times customer or client can purchase a package
- Number of tweaks, revisions, components, etc. included
- The words “NO SUBSTITUTIONS; NO EXCEPTIONS”
Using a Client Contract is another failsafe you shouldn’t ignore – even if that’s just a simple email outlining and confirming the number of changes, what’s included, etc.
Step 3: What Is Your Perceived Value?
|
It all boils down to perceived value in the eyes of the customer. How rare are your services, in your marketplace? How many competitors do you have? Who else does exactly what you do? What do they charge for it? And is there a demand for the factors that set your services apart?
(Does any one factor set your services apart?) |
|
Here’s an extremely simple example I used to explain perceived value to help my sister with her candle making business.
Customer A is phobic about fire. The only candle she’d ever consider having in her house would be one of the battery-operated “fake” candles.
Customer B is a fanatical scented candle user and collector. In particular, she loves amber-scented candles – a scent that’s adequately represented in the cosmetics industry but exceptionally rare in the candle marketplace.
You run a business called “Mooki”, and sell your home-made candles (scented with pure essential oils) at the local farmer’s market every Saturday. One week, you turn up with amber-scented candles.
Who is more likely to buy – Customer A or Customer B? Here’s what happens, of course...
Customer A takes one look at your display and has a searing flashback to the candle accident she had as a pre-teen. Convinced that your candles – all flickering madly in the breeze -- are going to set fire to the drape hanging down from the sewing shop in the next booth, not a foot away from the flame, she scuttles away as fast as she can, banging into people right, left and center in her haste to outside the building as quickly as possible. Sale lost before it could even begin!
Customer B is lured in by the scent. Her eyes begin to glow with more than candle flame. She fumbles for her wallet, chattering at top speed about the last time she came across a real, amber-scented candle – a misty memory from her past. Excitedly, she buys your candle. Its value in her eyes was almost priceless. She was left uttering the cry of the customer that every retailer wants to hear: “I must have that candle!”
The value of your candles in the eyes of Customer A was less than zero – it was a stark reminder of terror. Your chances of selling any candle to her were nil.
The value of your candles in the eyes of Customer B started out pretty high, since you were selling an item she was already passionate about – but when you added your high-quality, pure amber-resin scent, your sale was assured at almost any price. Not only was the amber-scented candle a rarity, but it triggered memories of the most pleasurable kind.
Its perceived value to your customer was way above even the value of an ordinary candle.
Where Formula Becomes Art.
“Okay,” you say. “I get it. Simple. The key is in making sure I’m in a place where Customer B will find me”.
Yes – but that’s only part of it. You also need to consider:
- How much cash Customer B has at her disposal
- How many other candle sellers are situated in your immediate vicinity
- Whether or not there are other amber-scented candles to compete with yours
Here’s the deal: You’re never, ever going to get Customer A’s business (unless she goes through heavy therapy. And possibly not even then). So don’t waste time marketing to her.
But if you’re situated in a row of candle sellers, each selling unique creations scented with high-quality oil, your chances of being the vendor Customer B buys from decrease dramatically – in fact, they decrease per competitor: If there are only two of you (candle vendors, that is), the odds she’ll buy from you are fifty-fifty. If there are four, the odds are a quarter to one: And so on.
Back to personal training now. And here’s where it gets more complicated with more variables:
- You have a trump card: You have a totally unique service. Your chances increase to one hundred per cent! However, if even one personal trainer also has an unique service, your odds drop back to fifty-fifty. Your sale is now in real jeopardy. What else can you offer?
This is where we get back to price... - If your service costs £25 and your fellow PT’s costs £79, your chances swing wildly upward again.
- Ahhh, but what if his service is a big, fat, nutritionally enhanced one that will fit perfectly into Customer B’s busy lifestlye, while yours is just a standard skinny exercise program?
Your chances swing wildly downward again. - And the factor of Customer B owning the nutritionally enhanced service is outside of your control. (There’s always something that is: No matter how carefully you research and plan.)
- And here’s another factor we haven’t considered...
What if your competing personal trainer has a website that’s just above your website in search results.
I’ll tell you exactly what happens. The client is so thrilled to come across a nutritionally enhanced service the moment she lands on the website that she whips out her wallet. It’s an agonizing decision – for all of about three seconds – because she only has £80 to spend this morning and she was actually planning to keep forty of that for dinner and a movie later that day. But she buys your competitor’s £79 service, convinced she’ll never come across something close: At least, not for years.
Then she exits the site and sees your site one place down. She sees in a flash that your service not only looks better and more substantial, but that there’s much more of it... for less than half the price of the service she just bought.
She is sick with disappointment: Had she just checked your website first, she could have bought your service at £25.00 and still have had money left over for dinner and a movie. Instead of which, she blew £79.00 on an inferior service that won’t get a quarter of the results as yours.
“But why can’t she buy two?” you ask. Well, she only had £80.00 to begin with. All the wishing in the world couldn’t put more money in her pocket – even though the value she put on your service was off the map.
So that’s where it becomes an art form. Giving your product every last advantage you can think of... and that immeasurable, intangible element of instinctively making your service the right service: Not because you knew she needed it, but because it’s the sort of service you would have bought, being as how you’re so passionate about health too.
And you – the real you, not our mythical you – have one even bigger disadvantage than the mythical you.
You are selling services – not tangible, physical goods whose every ingredient or component is set in stone. That’s why you have to become a pricing artist, blending your knowledge of your customer, your marketplace and pricing principles with perceived value – and instinctively knowing your client so well that you know how to irresistibly sweeten the pot.
“Well,” you say, “at least I don’t have to worry about location ...” Oh, don’t you?
Step 4: How Your Location Can Affect Prices
The problem with perceived value is location. Location is everything – especially when your “storefront” often lives online or among other PT’s.
In real life, a crappy PT can be selling over-priced, unexciting PT and a rather unsubstantial service near the gym entrance. So that the potential client who loves exercise doesn’t have a chance to find out that your service, at the back of the building, has a superior product at a better price.
So how can you position yourself at the door?
Here’s how...
1. Extend your reach. Promote your service in a variety of ways:
2. Be visible. Frequent health and fitness forums, social media and blogs regularly and consistently. Be there with advice on making getting fit, when people bewail on Facebook that they’re feeling sluggish and overweight. Answer questions. Discuss fitness every chance you get. Be approachable. But above all – be there.
Most important factors: Compete on your unique advantages -- service quality, ability to meet deadlines, ability to meet expectations, ability to throw extra skills into the mix and last but not least, your persona (is it matched to your client base’s communication preferences? Are you “one of us”?)
Don’t compete on price alone. Clients who are out for the bottom dollar are more likely to bail ship on you when someone cheaper comes along (unless you’re underpricing yourself so drastically that using you is a no-brainer: In which case, you’re not likely to be making a profit at all).
And no matter what economic strata they’re coming from: Clients who demand “cheap” are usually the most demanding and unrewarding to work for.
Focus on the client you want – not the client you can get.
In real life, a crappy PT can be selling over-priced, unexciting PT and a rather unsubstantial service near the gym entrance. So that the potential client who loves exercise doesn’t have a chance to find out that your service, at the back of the building, has a superior product at a better price.
So how can you position yourself at the door?
Here’s how...
1. Extend your reach. Promote your service in a variety of ways:
- On your blog
- In article directories
- Throughout every social media your client is likely to be browsing through and lurking in
- Commenting on other weight loss blogs and forums
- Buying ads, to make sure you reach a wider segment of the
- general public
- Sending out local flyers, in case your client lives in your area
- Mailing postcards or emails to your previous clients, in case one of this particular group has a thing for your service
- Sell the sizzle, not the sausage1
- Sell the sausage as well (i.e. emphasize its exceptional
- quality!)
2. Be visible. Frequent health and fitness forums, social media and blogs regularly and consistently. Be there with advice on making getting fit, when people bewail on Facebook that they’re feeling sluggish and overweight. Answer questions. Discuss fitness every chance you get. Be approachable. But above all – be there.
Most important factors: Compete on your unique advantages -- service quality, ability to meet deadlines, ability to meet expectations, ability to throw extra skills into the mix and last but not least, your persona (is it matched to your client base’s communication preferences? Are you “one of us”?)
Don’t compete on price alone. Clients who are out for the bottom dollar are more likely to bail ship on you when someone cheaper comes along (unless you’re underpricing yourself so drastically that using you is a no-brainer: In which case, you’re not likely to be making a profit at all).
And no matter what economic strata they’re coming from: Clients who demand “cheap” are usually the most demanding and unrewarding to work for.
Focus on the client you want – not the client you can get.
Step 5: How Can I Test My Prices?
You need to test the real-world demand for your products or services before you finalize your prices. And it would also be nice if you could reap some recommendations and testimonials to use in your official Product or Business Launch promotions – as well as get feedback so you can tweak your product or services; or focus in new directions; or expand various areas of your business offerings that prove to be surprisingly lucrative.
The best way to do this is with time-limited “Sneak Previews”. You can do this in a number of ways. Offer:
1. Free “review copies” – Make it clear that there is a condition; and that is you get a detailed review (and give some pointers on what to include in that review)
2. Free samples – If yours is a physical product. But again, ask for a review of your product, making it as easy as possible for the customer to provide it. (E.g. a follow-up email along the lines of “did you like your free sample? Tell us what you liked HERE –and be entered in our free draw!) (Be sure to calculate the cost of XX samples into your initial pricing calculations.)
3. Closed Forum Special Offers – If you belong to a mastermind group, forum or membership site, this is the perfect venue for testing the waters with your product or services!
Most of these will prohibit selling within the main forum, so be sure to read the guidelines. Look for a “Members Services” or “Special Offers” section, since many forums do allow members to offer services strictly within such a section.
Be sure to read the rules or any “sticky” guidelines for that section too, since there may be set ways of presenting these offers – you don’t want to alienate the very influencers who might prove most helpful.
4. Simple JV partnerships – This consists of offering a limited-time, limited-number of your product, pre-launch, at a special price to one of your niche’s influencers (preferably one with an affiliate program!)
To make the most out of this:
Once you have taken one or more of these steps and tested out your prices, you can more accurately set them for general release of your product or business service announcements or main promotions.
Pre-testing is a vital part of pricing strategy – so be sure to plan for it in advance.
The best way to do this is with time-limited “Sneak Previews”. You can do this in a number of ways. Offer:
1. Free “review copies” – Make it clear that there is a condition; and that is you get a detailed review (and give some pointers on what to include in that review)
2. Free samples – If yours is a physical product. But again, ask for a review of your product, making it as easy as possible for the customer to provide it. (E.g. a follow-up email along the lines of “did you like your free sample? Tell us what you liked HERE –and be entered in our free draw!) (Be sure to calculate the cost of XX samples into your initial pricing calculations.)
3. Closed Forum Special Offers – If you belong to a mastermind group, forum or membership site, this is the perfect venue for testing the waters with your product or services!
Most of these will prohibit selling within the main forum, so be sure to read the guidelines. Look for a “Members Services” or “Special Offers” section, since many forums do allow members to offer services strictly within such a section.
Be sure to read the rules or any “sticky” guidelines for that section too, since there may be set ways of presenting these offers – you don’t want to alienate the very influencers who might prove most helpful.
4. Simple JV partnerships – This consists of offering a limited-time, limited-number of your product, pre-launch, at a special price to one of your niche’s influencers (preferably one with an affiliate program!)
To make the most out of this:
- Make sure your offer is absolutely perfect for your potential JV partner’s subscribers: You know they’ll be delighted.
- Make it easy for your potential JV partner. Do all the work so that all she has to do is send out an email to her list
- Make sure you can deliver the goods – and have people thrilled with them
Once you have taken one or more of these steps and tested out your prices, you can more accurately set them for general release of your product or business service announcements or main promotions.
Pre-testing is a vital part of pricing strategy – so be sure to plan for it in advance.
Before setting any prices, remember to always factor in:
- Your experience
- Your skill sets
- Your professional credentials, licenses or certifications
- Your clients
- Your competitors
- Your strengths and weaknesses
- Materials Costs
- Operating expenses
- Other costs (e.g. computer equipment, rent, insurance, courses you know you’re going to have to take)
- Whether or not you’re planning to outsource or hire staff o How you’d like to grow your business and services
- Profit you’d like to generate
- Location and visibility
Step 6: How Can I Increase My Prices?
One final key area to consider, when pricing your services for maximum profit, is how you are going to raise your prices.
The whole key to doing this without alienating existing clients (or stressing yourself out completely, if you’re not the assertive sort) lies in giving them advance notice of changes and training your clients to expect price increases – suddenly springing a hike of £5 per hour on your best client is only going to end in tears... for someone, anyway. Whether you get your way or not.
If you’ve already got regular, recurring clients, but you’re dying because (a) you’re not assertive (b) you’ve never raised your prices in five years – and your clients are now publicly stating they’re making millions, the most minimal action you should take for your fitness marketing is to raise those prices now.. but make it such a small increase, they breathe a sigh of relief.
After that, raise your prices regularly – always at the same time of year (e.g. January 1st) or at clockwork-regular intervals. Use the steps and example script below to write an effective price increase email/letter:
The whole key to doing this without alienating existing clients (or stressing yourself out completely, if you’re not the assertive sort) lies in giving them advance notice of changes and training your clients to expect price increases – suddenly springing a hike of £5 per hour on your best client is only going to end in tears... for someone, anyway. Whether you get your way or not.
If you’ve already got regular, recurring clients, but you’re dying because (a) you’re not assertive (b) you’ve never raised your prices in five years – and your clients are now publicly stating they’re making millions, the most minimal action you should take for your fitness marketing is to raise those prices now.. but make it such a small increase, they breathe a sigh of relief.
After that, raise your prices regularly – always at the same time of year (e.g. January 1st) or at clockwork-regular intervals. Use the steps and example script below to write an effective price increase email/letter:
- Explain but don't apologize
- Talk about your value
- Offer loyal customers a better deal
- Manage expectations (communicate the price increase well ahead of time and repeatedly)
- Offer choices (stay on the same fee but get less value)
Dear [NAME],
It has been a pleasure to serve you in the past, and we look forward to doing business with you in the future.
As you may know, [STATE REASON FOR PRICE INCREASE].
Our priority is to provide the best possible service to our clients. However, we will not be able to serve you if our business incurs losses. Unfortunately, we are left with no rational alternative but to increase our prices. We are confident, nonetheless, that you will find the quality of our [products/services] even in light of these new prices to be quite reasonable and competitive.
Enclosed, please find a copy of our new price list, which is effective [DATE].
While we are not happy about this announcement, we are confident you will continue to be pleased with our superior [products/services]. We look forward to continued business together.
Sincerely,
[YOUR NAME]
It has been a pleasure to serve you in the past, and we look forward to doing business with you in the future.
As you may know, [STATE REASON FOR PRICE INCREASE].
Our priority is to provide the best possible service to our clients. However, we will not be able to serve you if our business incurs losses. Unfortunately, we are left with no rational alternative but to increase our prices. We are confident, nonetheless, that you will find the quality of our [products/services] even in light of these new prices to be quite reasonable and competitive.
Enclosed, please find a copy of our new price list, which is effective [DATE].
While we are not happy about this announcement, we are confident you will continue to be pleased with our superior [products/services]. We look forward to continued business together.
Sincerely,
[YOUR NAME]
If you’re still not comfortable with that (and if you’re so timid your “raises” don’t even pay for a book of postage stamps) you could try a different option: Renegotiate your terms.
- Suggest payment per package, rather than by the hour. Position this as an advantage to the client and make sure it is also an advantage to you.
- Suggest a monthly retainer, if your monthly payments are fairly fixed – ask for fifty per cent
- Upgrade your prices when you add or upgrade services; or introduce new staff
- Give your clients the option of working with your new junior staff member, if they don’t like your new prices. (Most clients will quit grumbling at this point, and capitulate)
Finally, remember that most clients know when they are ripping you off so if you are one of those helpful service providers who haven’t raised their prices in years, it might be time.
Having all the information at your fingertips should go a long way to help you set prices confidently, so that you really do get paid what you are worth.
That’s the best way to ensure your services return you maximum profit – right from the start.
Frequently Asked Questions
WHAT PRICING MODEL SUITES ME?
This depends on lots of factors doesn't it? Will you be working on the ground or online? What type of services are you offering? Packages, coaching plans, nutrition based learning, online coaching? How much do you want to earn? Research the industry averages and then you can price accordingly. If you have started to work out your business plan, then you may have these answers to assist you. Revisit the pricing tears above for support.
HOW CAN I INCREASE MY RATES FAST?
Ok, its not about just raising your rates quickly, it is about keeping your excising clients happy, giving them pre-warning of a raise in rates and not to alienate your potential clients with a huge price tag for your services without enough industry and customer backing (reviews). If you just hike your rates months after someone has signed up for your services, you may expect some tears.
HOW CAN I BE MORE ASSERTIVE?
Your clients understand that you are a business and will want to expand and increase sales somehow. Having regular set dates for price hikes, being confident and highlighting the value of the services for the price increase will help. revisit these steps when engaging in communication bout price increases.
- Explain but don't apologize
- Talk about your value
- Offer loyal customers a better deal
- Manage expectations (communicate the price increase well ahead of time and repeatedly)
- Offer choices (stay on the same fee but get less value)
