When it comes to your fitness studio’s long-term vitality and sustainability, one of the most important decisions you will make is how to price your services. As a studio business consultant of 10 years and a former Pilates teacher, pricing is a topic that comes up with every studio owner I work with.
Studio owners and solopreneur teachers are asking:
– Are my sessions priced right? Am I overpriced or, worse yet, underpriced?
– How do I figure out the right pricing model for my business?
– I want to raise my prices – what do I do?
Pricing is a bit of an art and science for every studio business, making it a tricky challenge to take on. But don’t worry; there are ways to ensure you get your pricing right.
The Personal Factor that Influences Your Pricing
First up, let’s tackle the elephant in the room. An emotional factor comes into play when a business owner is pricing their services – especially in the early days.
Starting a studio business is very exciting, but it certainly comes with many worries, too. One of them is how to get new clients. When you are just starting out, the temptation to simply undercut your competition or to price on the lower side to attract clients is very strong.
However, this is not usually sustainable long-term. You may be losing money on each and every sale you make. On top of that, you risk attracting clients who simply want the lowest price – not those who desire the valuable benefits only you and your studio can provide.
You don’t want to lock yourself into a position in the market that you can’t get out of later, and being the Walmart of the boutique fitness world is not what you are going for with your business.
How to price right for your business
As a studio owner, you’ll want to get comfortable with numbers. And some numbers must be considered when it comes to your pricing. You have to cover your costs and account for your profit margin. Once you know your expenses and cost of delivering your services, you have your breakeven price point: this is the science part of the pricing equation.
The artsy part is how you quantify your value.
Perceived value plays heavily on pricing. Yes, you want to make sure that you are not priced way out of line with competitors, but, let’s be clear,
your competition does not set your price. Your price should reflect the incredible experience and results you offer your studio clients.
Perceived value is driven by:
– The experience clients have inside your studio
– The benefits your clients receive
– What do your clients get from you that they cannot get anywhere else?
Remember: you are not selling a single session. You are selling a lifestyle, health, vitality, and community.
And, can you charge a premium for that? Yes – you absolutely can and should.
How to Handle a Price Increase with Your Clients
The pandemic has presented many challenges, and now we are facing the aftermath in the form of rising inflation. Your business is likely experiencing increasing costs. If you haven’t adjusted your prices in 18 months, now is probably the time.
Pricing increases come with their fair share of considerations. However, clear and transparent communication is key to successfully handling a price increase with your clients.
Inform your clients with a concise and polite notification that includes the following three key components:
- Shows appreciation for their business
- Spells out the price update clearly
- Affirms your commitment to delivering your brand promise
Will you get a little pushback? Perhaps. But it’s more likely that you’ll be pleasantly surprised by how understanding your clients are about updated pricing.
Your pricing reflects the value you deliver to clients and can make or break your position in the market. That’s why it’s critically important to get it just right and, when it’s not, to make the necessary changes.