How to Tell Customers About a Rate Increase (Without Losing Clients)

Monday, July 18, 2022
Run Your Fitness Business

Increasing prices is a standard – and necessary – part of running a fitness business (especially  if you want to thrive long-term). Price increases help offset expenses, provide revenue for investing in training and hiring quality staff and communicate value and growth to your customers. 

So how do you tell your customer you’re increasing your rates in a way that builds your business and helps you attract and retain customers? 

We’ve compiled the following tips for announcing a price increase that will help you appropriately raise your rates and feel confident and positive along the way. 

Why Fitness Studios Raise Prices

There are plenty of reasons fitness businesses increase their rates. The cost of doing business, from rent to staff wages to supplies, inevitably grows.

Often fitness studios up the number of classes and programs, locations and special offerings over time. You and your trainers may also have invested in additional professional development and you may have added amenities as you’ve learned more about what your customers want from a fitness studio. Lastly, you want to keep pace with price changes in your market and stay competitive while maximizing revenue. 

Price is closely linked to value in the minds of consumers. It’s important to note that people expect to get what they pay for.

One of the biggest mistakes fitness studio owners make is to underprice their services thinking they will attract more customers.

In the long-run this can de-value your offerings and put your business at risk of a cash-flow crunch, or lower profit potential. Make sure that your prices are set to help you hit your revenue goals. 

Make sure that your prices are appropriate to your market and that what you charge realistically reflects the quality of the experience you offer.

Don’t be afraid to ask for what you’re worth!

If you communicate your fitness business’s value clearly and confidently, you may even see your business grow with a price increase. 

Yes, you may see some attrition, but a side-benefit of increasing your rates is that you may happily rid yourself of problem clients. 

Different Types of Rate Increases for Fitness Studios

Typically gyms and fitness studios increase prices for services at least once a year.

The most common places to increase rates are for:

  • Memberships and Class Passes (where pricing is co-dependent)
  • Drop In/Day Use Price
  • Special Promotions/Introductory Offer
  • Workshops and Training Programs
  • Retail

Consider whether you will keep existing auto-pay members at their current pricing levels and only implement the price increase for new members. Alternatively, you may have a specific date, such as Jan 1 on which all memberships increase in price. 

Make sure that you’re aware of any customers benefiting from special promotional deals and clearly communicate how your price increase will or will not effect them. 

How to Calculate Fitness Class Rates and Price Increases

When increasing monthly membership dues and class packages, it’s important to remember that these prices are tied together and often anchored by the single-class drop-in rate. This is because with each step up in price and commitment you want to offer added incentive – i.e. discounting to reward the customer for making the bigger purchase. 

🡢 For example, if your drop-in rate for a single class is $25, your 10 class pass should be priced less than $250.

Your unlimited monthly membership plan costs less than using three, 10 Class passes per month. For more details on how to price group fitness classes and create membership plans see our blog post, How Much to Charge for Fitness Classes: By Class Type and Pricing Your Group Fitness Classes: Getting It Right!

Be strategic and adjust pricing to meet your studio’s needs.

🡢 If you are looking to increase the number of customers on your monthly membership program, you may want to consider increasing the price of your class passes, but not your monthly membership to drive more sales.

🡢 Or, maybe you’ve got a robust and loyal following that’s already mostly on monthly unlimited plans and your business simply needs to keep up with market pricing, better cover costs and boost revenue. In that case and across the board rate increase makes the most sense. 

It all depends on your fitness studio’s market and your unique business circumstances. 

In addition to doing research to find out what the competition is charging, you’ll also want to consider your fitness business’s average expenses and revenue per class so that you ensure you’re operating in the black. For more check out our blog, 10 Critical Numbers that Will Make or Break Your Fitness Business

You may also want to download our free resource, The Ultimate Guide to Grow Your Fitness Business

How to Plan for a Smooth Price Increase

Communicating clearly to your customers with a single-minded message of celebrating your fitness businesses’ growth and value is key to retaining loyalty when telling your customers you’re increasing rates. 

Get Your Team On Board

First, get your entire team on board and supply them with talking points to ensure that everyone is on the same page about:

  • What the price increase is.
  • When it will take effect.
  • Why you are raising your rates.
  • Who it impacts.
It’s critical to avoid apologizing and giving long-winded explanations justifying your price increase.

The last thing you want to do when increasing your fitness studio’s prices is to leave the customer feeling like the change will negatively impact them and isn’t truly justified. Consider creating an internal FAQ document so that you and your staff are prepared to quickly and concisely answer any customer questions or concerns. 

 Make sure to practice and train your staff on how to handle any negative feedback.

One great response that nearly always assuages any complaints is to tell customers that you are constantly training and improving your professional skills, adding new, high-quality staff and upgrading your facilities and programs as you grow as a business.

You can be proud of these things and let your customers know that you are constantly striving to increase their satisfaction and experience – something you feel good about charging more to accomplish. 

Communicate Your Fitness Business’s Value

When announcing a price increase to your customers it is critical that you communicate your fitness business’s value and how that’s grown over time. This will vary depending on your unique circumstances, but here are few areas to consider when letting your customers know how you’re investing in their success:

  • Additional professional training and certification of instructors.
  • Expanded variety and number of group fitness classes.
  • New props and equipment.
  • Upgraded facilities and amenities.
  • Implementation of customer suggestions and requests.

Ask yourself what’s changed over the past year at your fitness studio? What new staff have you brought on board? What new classes are you offering? What additional perks have you added or could you add? 

How to Communicate Your Rate Increase Clearly and In a Timely Fashion

In addition to training your team and nailing your talking points, you can ensure that all customers are adequately informed of your rate increase by sending out information through multiple channels and far enough in advance that no one is taken by surprise. 

Consider crafting a multi-email campaign to send messages over a several week period.

🡢 Make sure that your website and all pages mentioning prices are updated.

🡢 Check to make sure all of your ads and online listings are updated with your new prices and retire any special promotions or coupons that utilize your old pricing. 

🡢 Post information about what, when, who and why the price increase is happening on fliers or signs in-studio. 

Have as many in-person conversations as you can.

Talking face-to-face, especially with your long-time, loyal members is key to keeping everyone happy. It may be worth creating call lists and reaching out to each of your members one-on-one. 

Make announcements before or after class and maybe even use SMS messaging. The bottom line is to ensure that everyone is well informed way ahead of time to minimize any confusion or complaint. 

What to Avoid When Raising Rates for Customers

We’ve already mentioned that it’s important to avoid over-explaining, apologizing and giving vague answers to customers when increasing prices at your fitness studio. 

Other mistakes to steer clear of include:

  • Giving little to no notice.
  • Not adequately communicating through multiple channels (email, in-person, text, phone).
  • Going silent post-increase.
  • Failing to consider who is and who is not impacted (current members v. new members, for example).

What Happens After Raising Rates for Customers

In the aftermath of a price increase, you may experience some anxiety as some customers fail to re-up passes or cancel memberships.

Stay the course and don’t worry.

If you’ve communicated your value clearly and been up front and honest with your customers, you will retain those who truly have come to love your studio, instructors, and the results they’ve gotten. 

Know that many of your customers won’t have a negative view of your price increase.

Remember, price equals value in the mind of the consumer – if you’ve communicated it appropriately. People understand that prices go up over time for many things, from milk and eggs to rent. 

Also, if you do see attrition, know that you are evolving your customer base to eventually be positioned as more of a top-tier studio where you are paid what you deserve!

Lastly, switching fitness studios is a hassle for many people and they just won’t do it because it would disrupt their routine and mean they’d have to shop around for an alternative. If you’ve got a strong community at your fitness studio, most customers won’t bail on it if they’ve come to find true workout buddies and support. 

How Often to Raise Rates

Just as the consumer price index increases the cost of living each year, the cost of owning and operating a fitness business goes up, even if you haven’t added staff or upgraded facilities.

🡢 Add to this that over time there’s wear and tear on your equipment, space and people and you’re justified in collecting more just to maintain what you’ve got. 

When you are in growth mode – and hopefully you are – you’re bound to be investing in growing your skills and that of your team with professional training programs and as you collect customer feedback you’re adjusting your class schedule and offerings.

During the pandemic many fitness businesses added online live and on-demand video, for example, which enriched their customer’s experience. 

Additionally, fitness studios will come and go from your local market and prices will naturally fluctuate. 

Your revenue goals are also likely to shift and change over time. It’s imperative that what you charge customers keeps pace to ensure the long-term health and vitality of your business. 

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