3 Things to Consider For Your Fitness Studio’s Pricing Structure
When growing your fitness studio or wellness business, there are many decisions that have to be made. For starters, how are you going to optimise your studio to attract and retain clients? The goal of any business is to become and stay profitable.
Think of it this way—the purpose of the studio is to help your clientele become healthier and happier. To do this with your best capability, we need to focus on one thing and absolutely make sure you get right: Pricing.
Pricing is the lifeblood of any business, as you don’t want to scare customers away by breaking the bank with high prices. But at the same time, you don’t want to under-price which would undercut your business.
Many factors go into pricing—especially when you’re looking to improve your customer acquisition and retention. You have to find that delicate balance of creating a pricing structure that makes your classes affordable for your target demographic, but also enables you to keep your business afloat and pay yourself and your employees.
There are three main factors to consider when setting up your pricing structure:
1. Market demand and supply
Before you make changes to your pricing structure, it’s imperative to test your market to better understand what the competition is charging and what your clientele desires. You don’t want to be that studio that charges luxury pricing in a market that is saturated with plenty of low-cost options.
You also need to analyse your consumer base. Who is currently coming to your studio? Are you in a dynamic, metropolitan area? Rural? Are your businesses in a college town? Knowing your consumer plays a huge role in organising your pricing structure. Do your research to find out what studios are charging in similar demographic areas to yours. You might also see value in talking to friends, family, and even strangers asking what they would pay for services your studio offers to gain insight as to what your consumer base would look like.
There are many services that you can use to host surveys to gain this type of insight, including free ones such as SurveyMonkey. Knowing your market and consumers are crucial as you don’t want to come into the market too high compared to competitors. In business, you can always start low to gain traction and climb up, but when you start high and trend lower, it raises eyebrows and can get consumers weary.
2. Your break-even
Secondly, it’s prudent to look over your income statement and figure out your break-even point. Your break-even point is the amount you need to generate to cover any operational fees such as leasing fees for the studio, payroll expenses, insurance, maintenance, paying yourself—the list goes on.
You do the math to figure out the amount it costs to run the studio and BOOM—that’s how much you need to generate. From that amount, you can figure out how much you need to charge for different types of clients, whether they are drop-ins, class passes, or monthly memberships. This should give you a fairly accurate idea of how income should look in order to keep your studio running and give yourself a decent living.
3. Customer experience
Make sure that your pricing structure is transparent and easy to understand. Hitting clients with hidden fees and having them keep an eye on the fine print will cause them to grow weary towards your studio and possibly give your studio a bad reputation.
Just keep it simple. Once you’ve figured out your pricing structure, put out a solid number and keep it that way. Be transparent. If you charge $30 for drop-ins, $50 for class passes, and $75 for a monthly membership—charge them exactly that! Don’t include a hidden fee for processing a credit card or something random— if there is an additional fee for anything, just state it.
By having a simple structure, you will see that clients will be more willing to commit because they know exactly what they are getting. Most of the time, clients won’t commit to a purchase or recurring payment—not because of the price—but because they don’t know exactly what they are getting. Tell them exactly what they are getting and give them more! Being generous with your benefits and offerings is an easy way to provide value and sell authentically.
With a simple pricing structure, you’ll be able to get those drop-ins, regarded as the least optimal by many studio owners, and turn them into monthly memberships and downgrade monthly-memberships to class-passes instead of losing them altogether. These simple pricing hacks allow you to simplify your life and be flexible with your consumer base.