What’s the best gym pricing strategy for a health club or fitness studio? The right approach to pricing can turbo-boost sales, revenue, and profitability. But what are the different options and how do you decide which to take?

 

In this article – we explain the strategic approaches to pricing gym memberships that can maximise customer conversions, revenue, and profitability.

 

 

What is a pricing strategy?

A pricing strategy is the approach you take to charging clients and members for your services. It’s a fundamental element of a gym’s business model and therefore vital to get it right.

 

Pricing impacts sales, marketing, and operations. It influences the number of customers who decide to purchase, the cash flow of your business, and overall profitability. The right approach can be the difference between success and failure in a business, so it’s crucial to decide it carefully. 

 

You might also like… How To Write An Awesome Gym Business Plan.

 

How to set your gym’s prices

Broadly speaking, there are three approaches to setting prices in your gym…

 

  1. Look at how much your competitors charge
  2. Calculate costs + profit
  3. Begin with the end in mind

 

These are similar to the strategies for pricing personal training but differ in which is most appropriate. Let’s look at each of them in more detail…

 

1 – Look At How Much Competitors Charge

The gym pricing strategy involves researching the competition and then price yourself slightly higher or lower. Depending on what you offer, you’ll probably have a gut feeling about whether to charge more or less than other gyms in your area.

 

Example ⇒ Competitor A charges $60 per month and competitor B charges $70per month so you charge $65per month.

 

The good thing about this method is that it’s easy to implement. Just spend a few minutes researching the competition, and you’re away! It also ensures that your pricing is competitive in the short term, which will help you generate membership sales from the outset.

 

However, this method does have its downfalls. The most obvious is that the price you choose may not cover your operating expenses which will quickly lead to financial ruin. It might be ok for PTs since they have lower outlays but isn’t recommended for bricks and mortar gyms that have higher costs to cover.

 

Another drawback is that it can lead to a race to the bottom. If you base your prices on your competitors’, then what happens if they drop theirs? Do you drop yours? And what will they do to counter this? Yep, that’s right, drop their price again.

 

This can lead to a downward spiral until prices hit rock bottom and no-one’s making any money. Eventually this devalues everyone’s services, and it’s incredibly difficult to raise them back the other way. So, whilst it’s an easy option, it’s worth treading carefully.

 

2 – Calculate Costs + Profit

This is the classic approach that most bricks and mortar businesses (as opposed to online ones) take. It involves calculating your costs and then adding a profit margin on top.

 

Example ⇒ It costs $40 to produce the product, pay staff and bills, and transport it to the customer, so we’ll add on a 50% profit margin and charge $60 in total.

 

For gyms and fitness studios, it means calculating the cost of your…

 

  • Building rent
  • Staff salaries
  • Utilities
  • Equipment
  • PPL licenses
  • Insurance
  • Marketing
  • Taxes 

 

The great thing about this gym pricing strategy is that it’s totally logical. It ensures your costs are covered and bills are paid (assuming you meet your minimum sales prediction).

 

The downside is, you may end up selling yourself short. What if the market would be willing to pay more? You’ll miss out on potential revenue and no-one wants that. So, it pays to combine this strategy with sound competitor research to ensure your prices reflect the market opportunity. 

 

3 – Begin With The End In Mind

This method involves deciding the total amount you want to generate and then creating an offering that’s worth the money. It’s a more goal-orientated approach, where you decide on the end result, and then work out what’s needed to achieve it.

Example ⇒ I want to generate $120,000 a year, which equals $10,000 per month. If I charge $100 per month for a membership, then I’ll need to find 100 regular members to meet the target. What can I offer that’s worth that to clients?

 

This approach allows us to think bigger, achieve financial freedom faster, and on our own terms. However, it also vital that you factor in your operating costs to ensure those are sufficiently covered.

 

You’ll also need to think carefully about how you create value for members… What can you offer clients that’s worth it? Because unless you can truly provide value to them, it’s just not going to be successful.

 


 

Types of gym pricing strategy

There are lots of different gym membership pricing strategies and some will suit your business more than others. Here’s a quick overview of the different elements that define a strategy…

 

  • Price point – budget, premium, or something in between.
  • What’s included – the services, facilities, and times that a customer can access in return for their membership fee.
  • Duration – whether you charge monthly, quarterly, annually, per session, or session bundles.

 

Price Point

There’s a huge variety of price points in the gym industry, from less than $20 at Planet Fitness to over $100 at Equinox.

 

Budget gyms adopt a ‘high volume low cost’ pricing strategy. This is where you price your memberships as low as possible in order to attract the highest number of members.

 

This approach involves offering the most basic services you can – usually just access to machines. Then you’ll need to charge extra for other optional add-ons or upgrades, such as classes and showers.

 

At the other end of the spectrum, you have the all-inclusive gym pricing strategy. This is where access to absolutely everything is included in the membership. This is the strategy typically adopted by premium health clubs where access to the pool, sauna, and classes are all included in the standard fee.

 

The key with this approach is to include access to features that have fixed costs. This means things that cost you the same to run whether one person uses them or 20 people do. For example, the cost of heating a pool, purchasing cleaning chemicals, and paying a lifeguard doesn’t change if more people use it. The same goes for classes – the instructor’s salary and PPL music license stay the same.  

 

There are lots of options in between budget and all-inclusive too. It’s similar to holidays – you’ve got self-catering, bed and breakfast, half board, and all-inclusive depending on the venue and customer preferences.

 

What you choose to include (or charge extra for) might be influenced by what your competitors offer. If you can offer customers more features for their money, then they’ll choose your club over another. The important thing is to focus on value over just price in order to avoid a race to the bottom.

 

What’s Included

We’ve already covered the access to facilities that you might include or charge extra for. But another consideration is the times at which a member can access the gym.

 

Many gyms offer cheaper membership options for people who can train at quiet times of the day. For example, students, shift workers, and retirees are the perfect audiences for ‘off-peak’ membership packages. 

 

There’s also the question of whether to charge a joining fee. It’s marketed as covering the initial setup costs for membership but actually puts a lot of people off. There aren’t many industries that charge people an extra free for the privilege of paying them!

 

In reality, it’s a tool gyms use to discourage cancellations and drive retention. People are less likely to leave if they know they’ll have to pay again if they decide to rejoin.

 

Duration

So, should you charge by the month, quarter, or year? Most gyms offer a range of different choices to their customers but the majority opt for monthly. This tends to be the most affordable for people’s budgets.

 

However, you can also offer them a discount for paying annually. This can aid your cashflow since it gives you a larger injection upfront. But in order to persuade people, it’ll need to be exceptional value. 

 

How to make your prices appealing to customers

Our recommendation is to keep things simple and transparent. Here are our top pricing strategy tips for gyms and fitness studios…

 

  • Offer 3 pricing tiers – basic, medium, and premium
  • Be transparent about the total costs including tax
  • Don’t charge a separate joining fee – build any genuine setup costs into the total price
  • Offer flexible commitments instead of a minimum 12-month contract
  • Spell out the value of what each membership includes
  • Break down the cost per day or per visit and then compare it to a coffee or newspaper

 

By following these gym pricing best practices, you’ll find that more enquiries convert into paying members.

 

You might also like… Price Presenting Tips For Personal Trainers.

 

 

Should you publish prices on your website?

We recommend a transparent approach to pricing which means being open about them on your gym website. This is the strategy that boutique fitness studios have employed to great effect.

 

Being secretive about prices creates a negative first impression and will mean many people don’t even bother getting in touch. It also helps to qualify leads and ensure your sales team receive enquiries from people who can afford your fees.

 

Gym Business Templates

Take the time, hassle, and guesswork out of sales and marketing…

 

Our ready-made templates make it quicker, cheaper, and easier to promote your fitness business. They can improve the effectiveness of your sales and marketing campaigns. If you aren’t an experienced marketer, then templates also provide a useful guide for you to follow.

 

Whether you run a gym club, fitness studio, or personal training business, these templates will save you time and effort. They’ll help you to plan and organize your promotional activities so that you generate more revenue. You’ll get 40+ templates covering sales, marketing, and business start-up resources.

 


 

Gym Membership Pricing Strategies For Fitness Clubs Studios