Fitness industry archives and news

Between now and the end of the year we’re going to take a look at 5 areas to help you Get 2023 ready.  Follow us on Facebook, Instagram, Linkedin or Twitter to be sure you don’t miss our follow-up posts.

In our third blog post in the series, we looked at how pricing tactics and how to think about using incentives to increase sign-ups, improve customer retention and motivate referrals.  In this post, we build on that topic to think about operational efficiency and specifically what booking availability and cancellation policy tactics you can employ to boost efficiency and revenue.

Manage when booking opens

Many businesses create, and publish their schedule and create a simple structure whereby anyone can book in immediately, right up to the start time of a session.  Whilst this may be fine if capacity isn’t a constraint, we think it’s still a good idea to consider a more refined policy because of the messaging it can send your customer base…

For example, if you note that bookings for a session open X amount of time before it starts (e.g. 1 week), then you can create (whether it exists or not) a sense of demand/urgency for people to book their space because they may fear on missing out otherwise, as they know others are going to be looking out to grab it.  This additionally prevents customers from booking too far into the future, decreasing availability when there’s a reasonable chance their plans may yet change and be unable to fulfil the booking.

Manage when booking closes

Perhaps less obvious is the idea to set when booking closes for a session past the start time of a session. How many times has someone turned up last minute, or a customer brought someone new for an intro session where admin is done in a hurry?  By closing bookings for a session at a set time after the session finishes you can enable anyone that turned up late or failed to book on to still participate and yet still go back and pay what they owed whilst keeping your and their booking records up to date.

If you record your sessions and want to have a timetabled set of pre-records for sessions (rather than just keeping it in a static on-demand library), this tactic can also be really handy for securing some extra revenue, allowing customers to book the session/pre-record long after it’s finished.

Manage prioritised access

You can also consider whether you want to give certain customers priority access to being able to book before others.

This can be a great way to reward customers for making a purchase.  For example, perhaps a benefit of booking a course/block is that you’ll get a priority buying period on the next course/block that’s released.  This can create good ongoing commitment with an incentive to maintain their spot based on knowledge may not be able to get it back if they don’t recommit.  By making that repeat buying decision, it can also reinforce a feeling of accountability and desire to attend, something that in our experience can naturally wain with standard recurring memberships.

Another option with this feature would be to offer certain sessions as ‘Member’ only, creating further value differentiation as against pay-as-you-go or shorter-term commitment packages.

Enable digital payments

If you’re reading this post, it’s perhaps unlikely that this isn’t taken for granted, but we think it’s worth noting nonetheless!

Some businesses decide to take bookings without enabling any payments, saving some transaction fees in the process.  Whilst this can work ok for some, and indeed Gymcatch can support this too, our experience is that this often proves a false economy.  Remember this gives people that cancel free access to your sessions and the potential to cost you both the money they would have spent, but also the money that someone else who could have booked the space would spend.

You’ll also have to spend time checking bank accounts against attendance and chasing for payment where necessary.  Assuming your time is limited, you should put a cost to this activity in a week – in our experience, even something at less than minimum wage more than pays for the related transaction costs (and in Gymcatch’s case, the software costs too!).

Sensible wait lists

Ensuring you use a waitlist strategy that maximises revenue for your business is important. Historic first-in-line methods can prove counter-productive, as they entail that those who were on them have had the most time to make other plans.  Indeed, the time it takes those on them to confirm or reject the take-up of their place further reduces the time others have to reply.  Far more efficient is to release any spare spaces on an equitable first come first served basis.

Use reminders and calendar sync

Reminders can be a double-edged sword – for some, if they’ve made a booking and it’s on their calendar, a reminder is an unwelcome interruption.  That said, they can be helpful if your client base are busy and decided to disable that setting/haven’t put it in their calendars and we’d always offer a customer the ability to configure their notification settings, so in moderation, they can certainly be value add.

Set a cancellation policy

Setting a policy is a delicate balance between ensuring you give your customers an incentive to book early / flexibility in case their plans change and the fact that you’re running a business and need the certainty of revenue and attendance to successfully deliver your services.

Our data supports the view that offering some flexibility for customers is a good idea and, indeed, now the market norm.  We’d strongly recommend enabling a swap should be the means of ‘refund’ rather than cash. This ensures you don’t miss out on the revenue whilst giving your customers some additional flexibility.

Clearly stating the cancellation policy at booking is evidently a good idea, and ensures any disputes or issues are kept to an absolute minimum.

In terms of what timeframe you’d allow a credit back/swap to a different session, factors such as what number of attendees makes a session profitable, the notice period you think alternative customers would need to be able to fill the space and a headline assessment of your ideal customer’s typical schedule all feed into this equation.

Generally, we see 3 hours – 24 hours before a start time as the norm but do remember you can set different policies for different sessions if you wish.  For example, perhaps you might be more generous with your 5-6:30 pm sessions than in-school/middle-of-the-day sessions because you recognise that work/traffic variables may be more of a worry for your target customers.

In our experience, as long as you build some flexibility into your model and clearly communicate the policy, customers are thankful for whatever you choose so be sure to think carefully about your policy and ensure you don’t encourage behaviour that ultimately costs you money.

With your operating tactics optimised in our next blog post in the Get 2023 ready series, we’ll consider when and how you’re going to promote your business. Follow us on Facebook, Instagram, Linkedin or Twitter to see when it drops in the coming week!

Ollie is the founder of Gymcatch, a booking and customer management software company. Visit gymcatch.com/pricing for pricing information.

Between now and the end of the year we’re going to take a look at 5 areas to help you Get 2023 ready.  Follow us on Facebook, Instagram, Linkedin or Twitter to be sure you don’t miss our follow-up posts.

In our second blog post in the series, we looked at how to set a pricing strategy.  In this post, we build on that topic to think about pricing tactics and what incentives you may consider both to bring in new customers but also to increase spending and retention from your existing ones.

Broadly these incentives fall into three types:

• Incentives to try/join
• Incentives to commit
• Incentives to refer

Incentives to try/join

These incentives are well-known and would include ‘First class free’, ‘First month free’ or ‘Free PT consultation’ etc.

When thinking about these types of incentives it helps to think about three questions.

First, consider how long is needed to determine whether they’ll benefit from your services.  This also, of course, should take into account how long you’re asking your customer to commit. For example, if you’re requiring a yearly contract you may want to give a potential customer longer to decide than if you are offering pay-as-you-go classes.

Secondly, consider how long you think a customer needs to become an engaged customer. How long do they need to build a routine or habit that ensures you’ve converted them?

Thirdly, consider the cost to you of the offer.  Can you afford a strong take-up of the incentive?  The cost to set up and administer the offer should also be factored in.

It is also worth noting, that if you don’t feel a free or longer free period is justified, a discount can work just as well for many, especially in relation to more expensive services.  This approach can also place a higher perceived value on quality and demand which for less price-sensitive buyers may be desirable.

Incentives to commit

These incentives are more business model considerations and would include decisions around whether to offer memberships, courses/blocks and class packs etc.

The consideration here is how much you want to require or even incentivise a bigger upfront commitment as against short-run or even per-session payments.  For many smoothing and visibility of future income is desirable, but in an age where customers increasingly value flexibility, this can be a difficult balance to strike.

For some businesses with high demand or waitlists, the right decision here will be to not incentivise commitment at all, but rather just enable a regular full-priced (e.g. membership, or course/block) for customer convenience of buying or securing a space.

A second option where demand is strong or artificially creates that view is to incentivise commitment based on the access.  For example, you could give members or course buyers priority access to sessions, or an existing course buyer priority over a space on the next.  This can create an incentive to commit without costing you anything.

Where offering a price incentive to commit is desirable, matching that to your customers’ cash flow and own schedule is a good idea.  For example, if your customers generally have children, would it be a better fit to offer term-time blocks rather than year round memberships?  Or perhaps if you want to keep a premium pay-as-you-go pricing model just offering a small discount on class packs that expire based on a date from purchase may make more sense than a discounted membership.

Incentives to refer

Finally, we consider incentives you may wish to offer to customers or local partners for referring new customers.  These are often more costly than standalone free trial products, as it generally makes sense to also include your standard offer for the new customer.

Examples might be a free class pass when you bring a friend, a month’s free membership for a successful sign-up, a gift card on success or even straight cash.  Generally, it makes most financial sense to offer incentives where you can absorb your margin as part of the cost (i.e. it’s not an additional hard cash outgoing), but this of course is only the case if the incentive proves sufficiently motivating as against offering something more tangible like a gift card or cash.

Given their additional cost, we’d recommend carefully considering when and for how long these types of incentives are used, as well as meticulously tracking how successful they are.  The one big advantage they have is that it’s very likely that your existing customer base has good access to potential customers with a similar demographic and set of needs/preferences.  As such, whilst these incentives cost more, there’s every chance they’ll convert well and, indeed, may be less costly than other more outward-facing marketing initiatives.

Thinking more widely than your existing customer base for referrals can also be beneficial.  Perhaps there are local businesses with a large employee base, a service provider or even a coffee house/restaurant that has a client base that would match up well to your services who you could create a more bespoke offer for.  There’s every chance there are businesses that you may even be able to partner with to offer something in return to reduce or even remove the cost entirely.

With your pricing strategy and incentive tactics now thought through, in our next blog post, we’ll move to thinking about operational efficiency strategies, including cancellation policies. Follow us on Facebook, Instagram, Linkedin or Twitter to see when it drops in the coming week!

Ollie is the founder of Gymcatch, a booking and customer management software company. Visit gymcatch.com/pricing for pricing information.

How to price your fitness services.  What are your customers willing to pay for your services?  How long and what are they prepared to commit to?

Between now and the end of the year we’re going to take a look at 5 areas to help you Get 2023 ready.  Follow us on Facebook, Instagram, Linkedin or Twitter to be sure you don’t miss our follow-up posts.

In our first blog post in the series, we thought about how to define your target customer and how that should inform the services you offer.  In this post, we build on that topic to consider the evergreen topic of pricing. Here we focus on your pricing strategy, and in a follow-up post, we’ll get deeper into specific promotional tactics. 

Be aware of bias

Before we think about your business, it’s worth raising a couple of important human characteristics that invariably influence pricing.  The first is a psychological bias known as ‘loss aversion’.  This bias can unconsciously lead you to under-price your services.  The bias entails that we fear loss more than valuing potential gains, so as applied to pricing, it entails that it’s natural to take what you’ve charged to date, or what the competition charge, as a reference point, fear the worse with regards customers’ propensity to not pay or switch services, and undershoot what you could charge.  i.e. you fear the worse when considering a price change rather than accurately weighing that as against the potential upside.

Secondly, there’s an emotional element to pricing for many. One likely strength of your business is its sense of community and your relationships with your customers.  Many may be considered friends who you socialise with.  This can naturally lead to a desire to please/aversion to confrontation and impact your confidence in making price changes, especially in a scenario where you feel funds are tight.

Of course, both of these natural tendencies exist for a reason, they serve us well in many situations, and ultimately you won’t (nor should you) try to ignore them completely but being aware of them can help in driving a more objective assessment of your businesses’ pricing strategy.

Keeping those tendencies in mind, we move to assess two important inputs to your pricing strategy; your business and your customers.

Your business

As you think about pricing your fitness services, you need to start by ensuring you understand the costs that need to be met by the output of your strategy – i.e. to understand your breakeven point.

Your monthly breakeven point should include your desired base income and all venue and marketing costs.  If you know you’ll be quieter in certain months of the year (and have required outgoings for those months) you should factor this into your thinking for busier periods.  A good exercise during this time is to assess your costs for any efficiencies that can be made. This will help you identify the common costs you can reduce (insert link). This is to say, you’d increase your income target in the busier months to make up for the quieter ones.

A second business-level consideration is cash flow. This is really about the timings for incoming and outgoing cash to your business and ensuring that they are aligned.  Generally, there’s a trade-off between offering longer-term (e.g. monthly memberships, courses/blocks) and shorter-term (e.g. pay as you go, class packs) commitment-based products. 

The former strategy gives greater visibility of revenue but the latter, as it’s normally priced at a premium, would be, all things equal, revenue maximising.  The extent to which you want to smooth cash flow versus relying on regular repetitive purchases feeds into how you price the different products you offer.  Of course, what your customers are able and willing to commit also feeds into this.  Quite often the right answer is a blend, but every business is different and should think through the value to them of each.

Your customers

With your breakeven point and cash flow needs to be established, we’d recommend experimenting with different pricing and customer purchasing numbers on paper or a basic spreadsheet.  From this, you can begin to get a feel for what range of pricing and demand meets your breakeven point and generate some ideas from which to evolve your thinking.

You can now look at your pricing ideas from your customers’ (and target customers’) perspective.  Assessing willingness to pay is difficult but using your customer profile from our first post in the series and reviewing, if applicable, how customer retention changed after a previous price change will all feed into your overall conclusion.  Trying to place them (generalised) on a 1-10 sensitivity scale may help.  If you think they are highly sensitive then you may also want to consider what the local competition is doing and pay some attention to that. This is not to say you match or undercut, more just be sure that the value you offer can be clearly communicated in comparison.

Once you’ve formed a view on price sensitivity you can overlay that against your range of high-low pricing and product commitment (long v short-term options) models to conclude what makes sense for your business.

Track and review

As you launch your new strategy, be sure to regularly review how it’s performing and consider whether the assumptions you’ve made throughout this process are holding true.

Having followed a logical process, you should feel confident in the strategy and launch.  That said, as the above has revealed, determining a sound pricing structure requires you to make reasonable assumptions across often inferred preferences, so ultimately you can’t be 100% certain on how a new offering or changes will land.  As such, how you communicate price changes is also important – our 5th blog post in this series will come back to the subject of messaging.  So, as you launch, stay close to your customers as you launch it and watch for feedback. 

‘Watch’ is the right word, because stated versus revealed preferences can be very different here.  For example, I might indicate that I’m upset about a price rise, but if I still pay/keep coming there’s perhaps a reality that I can’t be that upset about it.  Indeed, it may be that you’d weigh that type of feedback from customers more than others.

With your base pricing strategy now established, we’ll build on these considerations in our next post and look at how you can evolve your pricing tactics to add incentives for current and target customers.  Follow us on Facebook, Instagram, Linkedin or Twitter to see when it drops in the coming week!

Ollie is the founder of Gymcatch, a booking and customer management software company. Visit gymcatch.com/pricing for pricing information.

For more information on Gymcatch personal training booking software and how it can help your business get in touch to book a demo or start a free trial.