For your fitness studio or gym to succeed in the competitive health and wellness industry, you must first learn how to price gym memberships.
Creating the right gym membership pricing strategy for your business and its customer base, however, can be challenging. Price your memberships too high, and you will scare off many potential clients before they ever set foot in your studio; price your memberships too low, and you’ll hinder the growth of your business or reduce your operating margins to unsustainable levels.
The good news, though, is that you can identify the optimal pricing model for your gym by following a simple roadmap. To jumpstart the process of structuring your gym membership model, you should accomplish the following:
Analyze Your Business
Before you can master more exciting concepts, such as how to sell gym memberships at scale, you must first take a closer look at your business and its current performance.
First off, don’t under-value your gym, even if it has not been generating the revenue you had hoped for. As long as there is ample market demand for the services you offer, there is value to be found — you just have to tap into it.
Next, calculate your profit margins over the last year to determine whether they have been growing, shrinking, or holding steady. If your margins are razor thin, it might be time for a price increase, which we’ll cover in an upcoming section.
During your business assessment, you will need to review performance metrics that include your average customer’s lifetime value, churn rate (membership cancellations), and others. If these metrics reveal issues with your current business model, you’ll need to take an objective look at your current offerings. Use your findings to identify which aspects of your business model could be causing customers to leave your gym.
Know Your Clients
Once you have pinpointed where your business is doing well and where it could improve, you are ready to take a deep dive into the minds of your clients. During this phase of your planning process, identify your ideal customer, including their age, which services they would find most appealing, and how often they’d visit.
It is critical that you understand who your audience is and why they are interested in your studio. These insights will help you set pricing at levels that align with their spending habits and income levels.
Like most studios, you probably serve multiple demographics and age groups. Therefore, you will not have one single audience but instead multiple audience segments. In order to better understand each of these segments and how to connect with them, we recommend creating customer personas for each group, which are fictional profiles that outline each segment’s buying habits, interests, motivations, and demographic details.
Once you understand who your client base includes, you will be able to create a gym membership pricing strategy that appeals to members of all audience segments.
Know Your Competitors
Knowing your competition is a critical component of creating fitness studio membership pricing models. Remember, if your studio serves youth clients, your competition does not only include other gyms. It spreads to include after-school care providers, sports teams, and summer camps, which can all cut into your market share and reduce your profitability.
When assessing your competitors, you should ask questions like:
- How much does each option cost?
- Do these providers offer services similar to mine?
- How does my business provide better value to clients?
- Do my competitors offer transportation?
Answering these questions will help you identify ways to differentiate your offerings from those of other fitness studios and programs. You don’t necessarily have to undercut them on pricing, but if your services cost more, make sure to convey why and demonstrate that you are providing your customers with better value, even if the price tag is higher.
With that said, if you can beat your competitors’ prices while still maintaining good margins and offering better service, you will put your gym in a great position to thrive.
Fitness Membership Package Models
The final step to creating your strategy involves selecting a pricing model. While there are tons of options out there when it comes to gym membership pricing models, some of the most popular include:
- Pay-per-class
- Unlimited memberships
- Contract
- Class packages
- Monthly memberships
- Add-on packages (i.e., personal training, group fitness classes)
- Digital fitness/hybrid
All of these membership packages might not align with your business model, and that’s perfectly fine. Even if you have the capability to offer all of these different membership models, you don’t necessarily need to.
In fact, limiting your selection to a handful of membership options can actually streamline sign-up processes and remove friction from the buyer journey. For instance, you could offer monthly memberships, class packages, pay-per-class services, and add-on packages, an approach that would give your potential customers four different membership options to choose from and fit their budget.
Manage Your Gym Membership Packages with MyStudio
Now that you know how to sell gym memberships by creating the ideal membership pricing strategy, you need a way to efficiently manage your customers and their accounts.
Enter MyStudio, the premier fitness club management software on the market. MyStudio is a user-friendly yet dynamic gym membership management solution that allows you to oversee everything remotely. You can effortlessly manage client accounts, studio events, trial memberships, and more.
To try MyStudio club membership management software for yourself, contact our team and schedule a free demo.
