Pricing Strategy
Finding the right pricing strategy is as much a bout trial and error as anything else.
There really is no hard and fast way, you have to learn (usually through trial and error) how ‘elastic’ your pricing strategy is and how tolerant your target audience may be to price increases.
One thing is for sure, if you focus everything on the quality of your teaching and create a priceless experience for your clients (which extends beyond simply teaching the class) you will be better able to add a premium price tag to it.
Here are some of our do’s and don’ts for pricing:
Don’t
* Offer you first class free. You will discover that you have attracted people most likely to try ANYTHING once for free - and by their nature people who won’t pay to do it again. Your marketing efforts and service delivery have been in vain.
* Offer unlimited pricing options if you can’t cater for the demand that may bring. Nor if your pricing is set so low that someone attending classes twice a day is paying an amount that doesn’t reflect your value.
* Run too many promotions - or any at all! Under-selling yourself is one of the fastest routes to failure.
* Under-estimate how hard it is to increase your prices. You can always offer timed promotions at key seasonal moments, but if you set your pricing too low at the outset, you will find it very difficult to justify increasing prices down the line. Clients may view this as being misleading or worse, dishonest.
* Run surveys to ask clients what they are prepared to pay. Rarely will this give you an answer you are happy to accept!
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Do
* Offer a second class free. We all know if takes a while to set new habits. Incentivising clients to attend their second class for free (especially if within a limited timeframe) encourages them to make that repeat visit. You are one step closer to getting them hooked.
* Run refer-a-friend schemes. Word of mouth is the most powerful marketing tool you have at your disposal - and encouraging friends to attend classes together increases their level of commitment and accountability.
* Consider unlimited pricing, IF you have capacity and there is no additional cost to you to cater for demand. If you offer annual all-inclusive options, be sure to factor this into your cashflow model.
* Bundle together group workouts with private sessions and online access (if your model allows). Encourage your clients to try classes different ways and incentivise them financially.
* Talk to your clients. Ask trusted members of your client base what they think about your pricing, how highly they value your offering. Be prepared for the feedback they may offer!