How to perfect your pricing strategy
Are you looking to, or have recently digitised your gym? You might be wondering where to start when it comes to pricing your new or upcoming offering?
Digitisation isn’t just about the technology, it’s about how your fitness business makes money. With this being said, your pricing strategy is extremely important – if you get it right, you have the potential to generate sustainable profits.
You might be asking yourself “is my pricing competitive?” or “how many members do I need to make a profit?”. We’ve put together some top tips to help you perfect your digital offering pricing strategy.
1. Member demographics
Who are your customers? And where are they coming from? Your customer demographics are important – appealing to the right ones will help them utilise their own membership as well as recommending your offering to others, too.
You should consider:
- Income level – what level of income do your members earn?
- Disposable income – what are your members spending money on? What other health, entertainment or fitness products and services are they paying for?
- Age – can you offer packages that cater to both young and old? You may want to consider family deals etc.
2. What is your competition’s price point?
Have a look at the market and what other gyms are offering. You should consider what makes you different from your competitor and keep this in mind when pricing your offering.
Your customers are going to know what is being offered by other, nearby gyms and you need to understand this too. They will have a clear idea on what they expect to pay, and what they want in return for their membership fee.
You can either offer a similar style of pricing – one that is familiar and easy for customers to compare, or offer something a bit more different and stand out, highlighting the unique features and benefits of your gym compared to competitors.
3. Position yourself in the market
Positioning looks at your brand in comparison to your competitors. Are you a high-end gym with the best digital offering or a low-end gym with a smaller digital offering? Where you position yourself will help determine your price point.
4. Consider incentives
There are a few things you might want to consider at the initial stage of your pricing, to maximise sign ups and increase retention:
- Free trial – Some customers will want to try before they commit. At this point you can make a good impression and prove the worth of your digital offering.
- Lower introductory rate – You might want to offer a percentage off for the first couple of months, this convinces members to come on board and gives you the chance to make a good impression and ensure they stay signed up.
- Discounts – Make the most of lead generation or family and friend discounts. Because who can recommend your club as convincingly as your own members?
5. Bundle pricing vs optional pricing
Decide the pricing strategy that suits both your offering and your members.
Bundle pricing is where a member pays one rate, whether that is weekly, monthly or annually and it is all inclusive of everyday services a member may require from your facility. This is a more traditional membership pricing approach, and one that some will argue is no longer fit for the digital world we find ourselves in post-pandemic.
Optional pricing is where you can offer a lower rate for the customer to have flexibility to select what is included in their membership. This is a good place to start for a hybrid fitness offering as members can scale their membership up or down depending on what they want. For example, some members may want a digital only membership whereas some may want to use both in-centre facilities and have a digital membership. You can then offer different prices according to what they are using.
Need more information?
Want to find out more about how you can price your digital offering? We’re here to help!