Strategies for pricing your activities
The success of your sales will depend on the pricing strategy you establish in your center.
admin timp
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Reading time: 4 min.
16 November 2020
For most fitness and wellness centers, the monthly fee accounts for 80% of their total revenue.
The rest of the revenue usually comes from tuition, additional products or promotions.
This means that it is essential to get it right when setting the fixed price of the monthly fees.
The rest of the revenue usually comes from tuition, additional products or promotions.
This means that it is essential to get it right when setting the fixed price of the monthly fees.
In many cases, most managers rely on production costs to calculate the profit they want to extract from each customer, but it is also interesting to think about setting prices based on competition.
In today’s digital world, consumers are more informed and want to try sessions before venturing to choose a sports center.
In addition, this new way of consuming is joined by the birth of new platforms that aim to capture the fleeting customer looking for one-off sessions in different cities.
In addition, this new way of consuming is joined by the birth of new platforms that aim to capture the fleeting customer looking for one-off sessions in different cities.
In this context, the most logical thing to do is to identify our target audience and investigate what their needs are, what services they are looking for and also to analyze what is the active offer that exists among the competition. Until we are clear about to whom and at what price to sell, we cannot compare ourselves with our competitors to know if the price we have set is competitive.
This will allow us to set the session or activity at an appropriate cost and we will be able to offer our services in the market at a price that the consumer is willing to pay.
Pricing strategies for our fitness center
The success of our sales will depend on the princing strategy we establish at each moment. Do you want to know some strategies for a fitness or wellness center?
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Penetration strategies: this model is suitable for managers who are willing to lower their profits in exchange for a larger market share.
This involves setting more attractive prices to attract a larger number of clients; leaving the same prices but improving the service; or increasing market share by implementing more marketing strategies to make themselves known.
It may also be an option to increase the distribution channels for the sale of the service in order to penetrate new markets.
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Competitive advantage strategies: in our opinion, this is the most attractive strategy of all, as it involves creating services that are not offered by the competition.
It is the added value we provide that really attracts customers.
The idea is to differentiate ourselves from competitors both by being market leaders and by specializing in the services we offer.
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Strategies low costThis method is based on offering basic services at very low prices.
The real profit is obtained with complementary services and products that can be charged separately.
It tends to work very well in times of crisis but it must be taken into account that only a minimum service can be offered for the business to be profitable.
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Premium strategies: another of the pricing strategies of a gym is to offer higher quality services at a higher price to reach the type of customers we want to have.
A more select public willing to pay more for certain privileges and amenities.
Tips for pricing the activities you offer at your gym
When setting prices for a fitness center, it is important to take into account different factors such as the type of fitness center, the target audience, competitors’ prices, desired profit margins, business costs and the market’s sensitivity to price (supply and demand rule).
Opt for realistic prices in your industry
Perhaps you have chosen to offer your services at a price well below the market price, adopting a low cost business strategy.
The problem?
You need to sell a lot to be profitable, and to sell a lot you’re going to have to invest a lot in marketing.
Your profit margin may be so small that the fixed costs make your business unprofitable.
Beware of discounts on installments or one-time promotions.
Keep in mind that many unjustified discounts are deducted from your profit margin.
Imagine that you only get a 20% margin, if you make a 15% discount to your customers you would barely get a 5% profit.
It is a business model that has many risks and it is difficult to be always profitable.
Imagine that you only get a 20% margin, if you make a 15% discount to your customers you would barely get a 5% profit.
It is a business model that has many risks and it is difficult to be always profitable.
Control your fixed costs well
We insist: do not focus on production and service costs.
You must take everything into account: electricity, water, telephone, advertising, taxes, etc.
You must take everything into account: electricity, water, telephone, advertising, taxes, etc.
If your profit margins are too low, you will have a hard time keeping your business afloat.
A good help for you to have a good overview of this situation would be to use a business management program that allows you to clearly visualize income and expenses, as well as the profits you ultimately make, within a myriad of possibilities.
A good help for you to have a good overview of this situation would be to use a business management program that allows you to clearly visualize income and expenses, as well as the profits you ultimately make, within a myriad of possibilities.
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