All too often, gyms and fitness clubs become stuck competing on price. Shifting to selling on value can help you charge what you deserve for memberships. Learn more and find out how to take the leap and start charging on value.
The famous Warren Buffett quote goes: “Price is what you pay, value is what you get.” Often, people (and especially those who’ve never had a gym membership) judge gyms purely on price.
And that’s especially true given the growth of low-cost gyms across Australia and New Zealand over the past decade.
People have become used to membership prices being low. And, while average membership prices at privately-owned gyms have increased over the past few years, the impact of low prices lingers on.
For many, a gym membership is a cost to be paid for a commodity, rather than an investment that’ll pay off in time. How can you help your target audience to shift their mindset and really see the value of being a member of your gym?
Let’s get stuck in!
Cost of Living Means A Membership Is an Investment Choice
With New Zealand making the top 15 most expensive countries globally, it’s understandable that stretched household budgets make cost a key factor in both quitting and avoiding gym memberships.
World Population Review recently conducted a global comparison of living costs, analysing how factors like housing, transportation, and everyday goods contribute to the overall cost of living in each country.
As the cost of living keeps rising, it’s stretching household budgets, and gym memberships can start to feel like a luxury. Many people are expressing that their increasing expenses are leading them to cancel, and potential members are thinking twice before joining, concerned about getting value for their money.
The benefits of selling on value over price
So, how can you tackle the financial pressures your members face while ensuring your gym remains profitable?
You could try to get around it by lowering prices to attract and keep more members. Yet, in doing so, you’ll cut your profit margins. And become reliant on signing up more new members to chase growth.
Overcoming cost as a barrier, and being able to charge what you deserve, is essential to boosting profitability and building a thriving business.
And to do this you need to convince prospects and members that a membership is a long term investment worth making.
That means you need to sell the value you provide to members. To do this you need to:
- Know what members really value
- Satisfy and exceed member expectations
- And, ultimately, offer something they can’t get elsewhere
Value-based pricing
TipValue-based pricing is based on a consumer’s perceived value of a product/service. It’s a customer focused approach to pricing based on how much they believe an offering is worth.
Learn more about pricing strategiesValue-based pricing
Tip
Value-based pricing is based on a consumer’s perceived value of a product/service. It’s a customer focused approach to pricing based on how much they believe an offering is worth.
Learn more about pricing strategies
Perceived value for money
‘Value for money’ means different things for different people. Generally, when it comes to perceived value for money, people judge gym and fitness club memberships based on a combination of:
- The amount paid compared to the amount of service they get (for example, cost per use)
- The ‘products’ included (classes, inductions, PT-led sessions etc.)
- The environment of a facility (changing rooms, gym floor, wellness facilities, studios, car park, etc.)
Retention Guru research found that the exact combination that constitutes value for money differs based on experience level:
- Those who’ve never been a gym member are more likely to judge on cost per use – and can have unrealistic expectations of how often they’ll visit. They’re also influenced by the look of a club
- Experienced members know specifically what they want and measure value against this
Effectively selling on value means you need to understand and tap into what each individual wants based on their experience level and preferences.
Tap into the true motivations of your target audience
Having a clearly defined and well-researched target audience can help you understand what they’re looking for in a fitness club. And knowing what their true motivations in joining (and sticking with) a gym can help you emphasise the right things.
For example, that might mean emphasising:
- How your team goes the extra mile to support and motivate them towards their goals
- The opportunity to be part of your thriving community
- Ways you can help them manage, overcome, and prevent health problems and chronic diseases
- The mental health benefits exercise offers
- How keeping physically fit can improve quality of life for the long-term
People will pay more for something they feel they get exceptional value from. High quality, clean facilities and an efficient experience are a must.
And to succeed with value-based pricing and selling, you need to focus on member satisfaction. Satisfied, happy members will stick with you and talk positively about your business.
Offer something genuinely different
If you want to sell on value rather than price, you need to stand out from your competition. Prospects and members must believe that you can offer them something unique and valuable that they can’t get from another gym.
When selling, focus on educating prospective members. Understand what they’re really looking for and their motivations for joining a gym like yours. Provide compelling content to show:
- How you can help solve their problems
- And how enjoyable their experience will be
The power of your team
Your gym staff can be a powerful resource to help you offer something genuinely different.
Research shows that member-staff interaction has the biggest impact on perceived value when:
- It’s personal
- And helps the member on their way to achieving goals
The research also shows that some interactions have more impact than others. Interactions while they are physically active have a high perceived value.
Make sure all members feel valued and staff understand the importance of everyday interactions in helping members feel part of your gym community.
Recognise that price is still important
Price will always be important to some prospects and members when weighing up their fitness options. So, if you want to charge a higher price, you need to make sure you back up prices with real value and a satisfying member experience.
When introducing value-based pricing, or simply increasing your prices to better cover operating costs, make sure you’re able to communicate the value you provide clearly. Let members know about the increase well in advance of the change happening and talk about the value you offer.
The wrap up…
When choosing whether or not to join a gym, and picking a specific club, price can play a significant deciding role. Often, gym memberships are viewed as a commodity, rather than an investment that will pay off in time.
Cost and lack of perceived value is also a reason why many members choose to cancel.
It’s easy to overcome objections to cost by lowering prices. But, this can negatively impact your ability to run a profitable fitness business. To charge what you deserve and build a thriving business, selling on value is a must.
To take a value-based approach to pricing, you need to understand what your target audience perceives as value for money. And what really motivates them to be a part of your gym. Plus, it means providing a satisfying experience that they can only get from your fitness club.
You need to communicate your value really clearly and convincingly. And tap into what value for money means for different groups within your target audience.
The right gym management software can help you deliver the type of member experience that exceeds expectations. Software like Xplor Gym.
Book your free personalised demo now.
by Xplor Gym
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First published: 15 October 2024
Written by: Xplor Gym