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Raising Prices: When is the Time Right?

Here are some tips that we’ve done our own proof of effectiveness on in the Patti’s All American gym.

Your parents can make some comments that definitely get you thinking but don’t react to their comments. Do your own research and do the right thing for your business. Note Patti’s advice on how to drive home the benefits of choosing your facility and the consistency that you should apply to your price increases. With these points in mind, you can make your pricing decisions with confidence.

So what happens when you hear, “Your prices are too high?” Or “The other gym is lower in tuition than you.” These comments make you want to price cut, but you can’t, because it will make it impossible to provide the quality lessons at your typical superior high standard. Remember, it’s not about price-at least not most of the time. The percentage of your prospects who would choose a lower price over greater value is far lower than you might think, because price objections is related to the perceived value of what we offer. So, if we aren’t going to lower our prices, how can we compete?

1. Increase the perception of value-As often as you can, convey the benefits of your lessons; increased self-confidence, coordination, flexibility, strength, and poise.

2. Remember the parent isn’t buying the service you sell, they’re buying the outcome you offer. That can be for their child to make cheerleading, their child to lose weight, for their child to gain new friends, and more self-confidence.

3. Make your prospective parents aware that you offer  superior lessons to those of your competitors, and therefore the outcome is worth paying more to obtain.

4. Explain what you can give that no one else can. Maybe it’s your quailty teaching staff, your super-clean facility, the owner’s background, the state winning teams, or the success-proven curriculum.

5. Show results by talking about stories of successes in your gym–and not only medal winning, but “life-winnings” from your students.

6. Increase the perception of risk by explaining your safety measures and what you do to protect their child.

7. Make sure you’re raising prices each year and be aware of how your customers perceive that process.

Here is an example where Patti applied her own advice in her gymnastics facility.

We just raised prices January 17th. We were already 10% more than our competitors, but I know we need to raise prices every year to stay at the level of profit needed to be the superior gym. The problem this year was we have a year-round schedule. That means there is no time during the year our students re-register. We used to make them re-register every fall and would raise prices at that time with no explanation… just, “Here are the class schedules and fees for this year.” So, we didn’t raise prices last fall, because it was the first year to try the year-round schedule. By the way, I loved not re-registering anyone. So, when I raised them last month, this was the email we sent to the parents explaining the raise. I had to tell them; because I auto bill all of their credit cards.

“At Patti’s All-American, we are committed to constantly improving your family’s experience, and we continue to invest in education and equipment that will create safer, more fun, and rewarding lessons. As you might have noticed we acquired new equipment in the gym (a huge safety mat, a foam pit to learn skills more easily and safely, new bars, and lots of new teaching aids). We also purchased a display case for the lobby to showcase our internationally known curriculum and skill progression system, so students can see what awards they can win at the gym. Over the holiday break we brought in two nationally known gymnastics experts and had a day-long training seminar with our entire staff. All of this is to help us bring more happiness, success, and confidence to your children. As we make these and other investments, we periodically need to adjust prices due to increased business costs. Starting with your next tuition payment, you will see a slight $.50 per lesson increase. We have not raised prices in over a year and a half. We promise to continue to provide you with consistently superior service and great lessons. We value you for being part of the PAA family. Thank you.”

With that, it all went off without a hitch.

Patti has fantastic resources that cover every angle of your gym business. Check out #159, “8 Key Business Strategies“on Patti’s Tumblebear site.


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