There is one mistake we see far too many fitness professionals and business owners making and it’s incredibly painful to watch: They are vastly undercharging for their services, writes Sean Greeley, NPE Founder & CEO.
Undercharging can take many forms. It can mean charging too little, poor packaging, and incorrectly structured margins1.
But all these mistakes mean slim to zero profit in your business.
If you’re working your butt off, and aren’t finishing with more money at the end of the month than when you started, this area needs your attention.
How do you know if you’re currently undercharging?
More important, how can you make changes once you’ve identified them to ensure your continued success?
Well, let’s dive into that…
Pro tip 1: Price = The most important component of your business success
Pricing is the first step in becoming profitable and having freedom. If you don’t get it right, you won’t have either.
Don’t keep scraping by every month or discounting your services. If you value yourself, your business, and your clients, you must charge what you’re worth.
And once you get your pricing and packaging right, you’re well on your way to closing bigger sales, delivering what your clients need, and growing a profitable fitness business… fast!
Pro tip 2: Pick the right target market
If you’re in the habit of discounting your services, or you’re frustrated with clients not paying on time, you’re probably not serving the best type of client for your business you could.
You want clients who can afford your (new, higher) pricing and will pay on time. You want clients you are well-positioned to support on their journey and who will do the work. And you want clients who you can reach, so you can offer them a valuable service and who exist in enough quantities close enough to come see you for sessions each week.
So get clear on the profile of the clientele you wish to serve, services you’ll provide, and why you are the best one to help them, and you’ll have a much easier time charging what you’re worth.
Pro tip 3: Win the mental game
In business, consumers either want the best or the cheapest. When it comes to health and fitness and looking after your body, prospective clients always want the best! How you ever overheard anyone say "I want the cheapest personal trainer I can find"? No.
What do clients want? They want the best personal trainer they can find. And who’s the best? We assume it’s the one who’s charging the most. What do we generally think about a trainer who’s charging £200 an hour versus one that’s charging £20 an hour? We figure the one who’s charging £200 an hour is way better.
But are they? Maybe, maybe not. But we assume this because their price is the first sign of their value and how they are positioning themselves to the market.
And who sets our own prices? We do!
You’re talking to yourself about your own value and your belief system about your value. You need to get the conversation between your eyes right, first and foremost.
Limiting yourself by believing you can’t charge a premium price (because you don’t believe you are worth it) is probably biggest obstacle to your success.
If you want to get results and focus on serving clients better, you want to position your price in line with that value2. There’s tremendous price elasticity in the fitness industry.
If you don’t feel you’re good enough yet, then get better … but you have to charge more … you have to be charging more to grow.
Again, you can’t be cheap. No one wants the cheapest personal trainer.
Pro tip 4: Don’t let clients off the hook (and don’t sell 10 packs)
One of the most common pricing and packaging mistakes is this: Your client doesn’t commit to the length of time required to hit their goals.
It’s very likely that five or 10 session packs won’t get your clients to their goal. As a fitness professional, it’s your responsibility to recommend a realistic programme to your client to best serve them.
And your clients will be much more committed to achieving their goal if they invest in a long-term package. We call that "having skin in the game".
Many trainers get psyched when they sell a five or 10 session pack. But when the sessions are used up, they have to sit down with the client and sell them again on their services.
That’s not an effective use of your time and can quickly turn into a major problem.
The more clients you get, the more time you’ll spend chasing them, tracking them, and reselling them. And it’s not easy for a client to maintain that initial enthusiasm that comes after first signing up.
After a couple months, fitness is less glamorous and more about consistently doing the work. That’s not as “sexy” to sell.
Pro tip 5: Restructure your programmes
For the best results, you and your clients are best served by creating packages that are tied to solving the prospect’s problem and achieving their goals in a specific timeframe.
This is critical because it also helps give your business predictable cash flow. And you deliver what your clients need to achieve their goals - which is the whole point of your service!
Regardless of the type of programming you offer, the best packaging we have ever tested (it’s been the “control” since April 2010) is three, six and 12-month commitments for all of your training services (and when you’re really advanced, our top clients are selling 6, 12, and 18-month packages).
Before we talk about how to fix your pricing, let’s figure out how and why you created your current pricing. Many people base their current pricing model on:
- What they’ve seen their competition charging
- What they’ve always charged (many still have clients on billing plans from three, five and even 10 years ago)
- Or they’ve got no idea how they came up with their current rates.
None of those are good strategies to base your business (and personal income) around, especially when you’re scraping by each month.
Pro tip 6: Stop discounting your prices
Many fitness professionals and business owners resort to discounting their rates in a race to the bottom of the market. “Oh, the other guys are now charging £120 a month for unlimited classes? Let’s charge £105 a month!”
If you are doing this, you are committing business (and financial) suicide! There is no profit at the bottom. Correct pricing is the first step in getting profitable and having freedom.
Pro tip 7: Review your business model
Is your business model as efficient and profitable as you want it to be? There’s lots of different ways to grow: group classes, private, semi-private, high-end private. The goal is to find the market you like to work with, match the right price and service offering to it and get a model that works as you grow.
In every fitness business, there’s time when what’s worked in the past isn’t going to help you get to the next step. It’s time to unpack that, review it, and make some changes, and design a more profitable machine. And that’s one thing where you talking to a coach who can help you take a look at that and make suggestions.
Your target market and business model play a huge role in your pricing. You must match your price point and service offerings to the clients you wish to serve.
Get this right and you’ll be set up for success. Get this wrong, and it’s difficult to make the economics of your business ever work right.
Don’t ever compete on price.
Understand that margin equals profitability, and profits will give you the freedom (and funding) to take your fitness business to the next level.
And once you get your pricing and packaging right, you’ll start closing big sales, delivering what your clients need and growing a profitable fitness business… fast.
Download NPE’s new business guide How to Fill Your Schedule with Great Clients You Love Working With here to discover the steps you need to take to fill your schedule, how to work with committed clients you love, and get on the path to earning a professional income.
About the Author
Sean Greeley, CEO and Founder of NPE, has an unrelenting passion for empowering fitness business owners to grow their business and create the life they want. Since 2006, NPE has served 36,000+ fitness business owners in 96+ countries and is an award-winning company with offices in Los Angeles, London, and Sydney.