125: Should You Raise Your Rates?

The question of raising rates is almost a taboo in the fitness industry. However, this something you must think about because the costs of operations of your gym keep increasing and at the end of the day, you need to make a profit. The fear of losing clients is what holds back many gym owners. However, even if you lose a few of your clients, your revenue will go up and your net profit.We look at the example of a gym that charges $150 and has 200 members. This leads to revenues of $30,000 a month. This gym owner feels like this revenue is not sufficient to run the business and make a profit. They have three options to increase it. Either they increase memberships, sell other things like supplements ,T-shirts, etc. or increase the rates.If they were to raise their rates to $200 for every member and assuming all of them stay. That will increase the revenue by 25% to $40,000 per month. If they lose 50 clients out of 200 due to the increase, then they would have a much leaner operation and lesser costs for the same amount of revenue as before meaning higher profits. If they were to lose 25 clients, there would be an increase of $5,000 a month while reducing some burden on the business.Tune in to this episode to understand why you should think about raising your rates and how this helps you serve your ideal client better. Key TakeawaysWhy the question of raising rates is viewed as a taboo in the fitness industry (01:21)Some hard math on increasing rates (04:30)The three options that a gym owner has to increase revenue (05:09)How we ended up losing just 1 client after we increased our rates (07:11)Why having a policy of never increasing rates is wrong (09:08)Having annual increases on contracts based on current client’s rate (10:11)As a gym owner, your focus should be providing better service to your clients and net profit (13:23)Determining your type of ideal client to attract them (20:07)Additional Resources:www.PFMarketingSolutions.com/Automationwww.CLACourse.comwww.ProFitGPS.netMarketing Talk with Fitness Professionals Facebook Grouphttps://PFMarketingSolutions.com/Datawww.PFMarketingSolutions.com/Callwww.ProfitGPS.com--If you are interested in a free audit for your gym, visit http://bit.ly/free_gym_audit--You can find out more about Tim and the strategies covered in this episode by checking out our website.--Would you rather watch the video version instead?Head over to our YouTube channel to watch this episode by going here--If you don’t already have my book, get your copy FREE here.--Connect with Tim:Schedule A CallFacebookInstagramLinkedInConnect with Randy:FacebookInstagram--Subscribe to the podcast on Apple, Spotify, Google, Stitcher, YouTube or anywhere else you listen to your podcasts.If you haven't already, please rate and review the podcast on Apple Podcasts!

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