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 not 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.
Should I Raise Prices?
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 level of 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 winnings, 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.
Make sure you’re raising prices each year and be aware of how your customers perceive that process.
More thoughts on every angle of your gym business, check out #159, “8 Key Business Strategies”-click here.