#037: Programs, Pricing, and Policies

#037: Programs, Pricing, and Policies

Programs, pricing, and policies aren’t just something you set and forget. They represent strategies to increase your gym’s profit, shape the culture of your community, define your way of life, and communicate critical messages about the value of your services. So, you can see why this is so important.

On this episode of Gymwright LIVE, we answer some of your questions from The Network regarding this foundational trinity. 

Join us every Friday at 10 a.m. PT on The Network where we’ll be airing live. Be sure to stick around for the live Q&A session at the end of the show so we can answer any questions you have.

This show was recorded live in The Network on Friday, June 22, 2018. Click the video to watch. 

In this article:

Image Credit: CrossFit Active Performance

5:00 Why are the 3Ps so important to the success of your gym business?

Increase your gym’s profit and defend your way of life.

You need to see a profit to continue running a sustainable business. You can only run on passion and purpose if you feel safe and secure in your current state and about your future. This can define your way of life.

Shape the culture of your community by communicating critical messages about the values of your services.

When you get really clear on your policies and the purpose of your gym, you’re communicating that you’re a legit business, therefore, cultivating a sense of respect about your policies and procedures. This can deter people from canceling on their contracts – something they probably wouldn’t jump to do with any other legitimate business. You can also have the opportunity to craft a story around why you have the highest prices in the area. While it does have to do with your coaching and your programming, it can also symbolize a deeper meaning. It can be something people are proud of and intrigued with instead of irritated by.

Image Credit: CrossFit Active Performance

7:15 How do you determine your premium program offerings?

Joe Hashey, President of Synergy Athletics: Joe specializes on 1 service. He wants to be the best in that service and doesn’t want to chase too many rabbits at once. But he’d like to know more about the benefits of offering other non-training services like nutrition and in-body.

As Joe did, you first want to focus on your core membership suite. This is the bread and butter of what you do and will be your most popular class. After you do this, you can move on to identifying your premium services which is what Joe’s asking about.

To do this, identify your brand hero – who it is you can and want to serve best. Most boxes go right to personal training but it might not be a good fit for you. Custom program design is a great upset as well which allows you to scale and raise your average member value. Nutrition services are also an awesome way to go because it will get your clients the best result when you’re supplementing it with even just your regular group fitness classes. The good nutrition support system is complementary to your core offering.

We suggest looking at a few things to determine your premium offering and ensure that its the natural next step from core to premium:

  1. Availability, interest, and expertise of your staff
  2. What your brand heroes want

Image Credit: CrossFit Active Performance

16:00 How do you refine your core program offering?

If you’re looking to remove some of you underperforming classes, communicate that you want to make sure you have a minimum attendance to keep the program.

If it drops below that, then the program will fall into a probationary mode and we’ll have to reassess if we’re going to continue to do it. Much like taking anything away, you might feel like you’re going to get a lot of negative feedback. In reality, if you clearly communicate it, your members should understand and respect your decisions.

Image Credit: CrossFit Active Performance

21:00 How do you create a pricing structure that works for your gym?

How did you determine your gym’s membership pricing structure? Did you create it based on your competition, or was there a method to the madness?

“Be careful copying the pricing structure of someone who appears to have their shit together.” Don’t make any assumptions.

Here are the steps to creating a pricing structure that works for you;

  1. Get clear on your vision and WHY you do what you do
  2. Get clear on USP (unique selling proposition)- what makes you different? This needs to excite your members and they need to know it.
  3. Determine the kind of business you want
    1. What size do you want to be?
    2. How personal do you want the experience to be?
    3. What is your service level and what do you want to be known for?
  4. Figure out all the costs necessary to deliver that experience
    1. taxes
    2. annual affiliate dues
    3. employment taxes
    4. equipment repairs
    5. on-going education
    6. Marketing etc
  5. Determine your salary, then add it to your cost of doing business
  6. Determine your desired profit – 10-20% is standard
  7. Add all that together and now you have your total

Image Credit: CrossFit Active Performance

36:00 How can you best articulate why your prices are much higher than the typical gym?

Emily Cabral, Owner of Chalkline CrossFit wants to know how can she best articulate the value to prospects who come in and question why they’re so much higher. And how do you articulate it to our current members?

It all comes down to your sales process. Built trust by finding out what they want and being a personal professional all the way through their journey with you. This will increase their perceived value of your gym. And if the conversation ever comes up, you can share that your goal isn’t to sell a gym membership.

Your goal is to help them achieve their fitness goals and so there’s more to it than just the workouts. Get into what you offer that’s a part of your service suite that makes you different. If you’re not doing anything different than the other competitors, this is your opportunity to fill that gap.

Gabrielle Boger, Owner of GB Training Center wants to know how to compete with the Anytime Fitness and Planet Fitness going in and offering dirt-cheap memberships? She has lost members to this, and although her style and quality of training are completely different, she thinks so many people just want the lowest price deal.

In this case, you also want to point out all of the issues people commonly have with training at a globo gym doesn’t tend to work out for people who do it on their own in those environments. If you’re getting a lot of price hunters, you also should look at your marketing efforts and see if they’re attracting low quality leads with overly used fitness buzz words that gain the wrong people’s interest.

Image Credit: CrossFit Active Performance

41:00 What are the pros and cons of published pricing?

Jean Carlos Gonzalez, Owner of Total Body Fitness wants to know the pros and cons of published pricing

It’s a matter of commoditization. When you publish your pricing, you’re allowing people to make the decision to compare you to other gyms based on pricing. Most consumers have a skewed understanding of how you can actually become healthy and fit.

It’s obviously not just about getting the cheapest gym membership. Give them enough information to get them to reach out to you, but you’re going to want to have the conversation with them before you share the pricing.

Image Credit: CrossFit Active Performance

45:00 What are they important policies you need to have?

It’s important to have information on the following policies:

  1. Cancellations
  2. Holds
  3. Renewals
  4. Waiver (which we’re not discussing today)

You’re going to want to design them around who you are, what you believe in, and what works for your average member. As the captain of the ship, you can choose to go as strict or lenient with your contracts as you like, but having them set and solid is an important aspect of your business.

Your business is worth the value of your used equipment only if your members aren’t on contracts. You won’t be able to get a loan or eventually sell your gym because of the risk.

Image Credit: CrossFit Active Performance

50:30 How do you actually enforce a membership contract with the least amount of blowback?

Drew Cost, Owner at Conquer Fitness United wants to know how to enforce a membership contract without an uproar.

Address the contract thoroughly when they first sign up by putting the contract in  big, simple, plain English so they can fully understand what the agreements are. If that’s being done, those following conversations will obviously be a lot easier.

Getting personal with someone when they’re exiting to find out more about why they’re leaving to show you care BEFORE you get into the contract policy will be a good segue.

Also remember, you can be flexible with contracts when it makes sense. If someone moves away, if they hurt themselves, if they have a circumstance that would warrant needing to stop payment – this could also be your chance to create some goodwill with someone who will continue to promote you long after they’ve left your box.

 

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Jessica Depatie About the author

Jessica is the marketing maven here at Gymwright. She's a business consultant and holistic marketer for fitness businesses. She specializes in the decision-making psychology of what makes everyday people want to optimize themselves. She dives deep into how people seek out growth in the pursuit of living happier and healthier.

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