According to CrossFit CEO Don Faul, “There are too many gyms who... could be doing a lot better financially.” He cites gym membership pricing as one of the biggest culprits, stating, “Most of our gyms underprice.”
According to the Two-Brain Business 2023 State of the Fitness Industry Report, the median price for a group training membership is $165. That number, collected by surveying 13,444 gyms worldwide, is up from $160 the year before.
But the experts say that gym membership pricing number is not high enough. Regardless of your market, most business mentors agree that $200 is the minimum for long-term business success.
If that’s not where you’re currently at, you’re not alone. Most CrossFit and functional fitness gyms fall below that line. But the secret to driving gym revenue isn’t adding more members. Instead, it’s increasing your ARM (average revenue per member).
Three Steps to Choose the Appropriate Gym Membership Pricing.
Seasoned gym owners know that it’s significantly less expensive to keep long-time members than to consistently bring in new ones. Similarly, you’ll spend less time and energy selling more to current members than adding new faces.
The key is to provide value and charge accordingly. Here are three ways to adjust gym membership pricing and services to increase revenue.
1. Increase Gym Membership Pricing.
First, it’s important to understand why you need to increase prices. Ultimately, your gym needs to be profitable. Although this may seem obvious, gym owner burnout often happens without ever making the business financially viable.
On the other hand, successful gym owners know that it’s possible to run a rewarding business while driving profits at the same time. But this only happens when your members are paying you what you’re worth.
First, check out the guide to increasing gym membership pricing. It gives you five simple steps to calculate your new rates and communicate with members.
Now, let’s talk about the elephant in the room. Gym owners are generally not opposed to raising rates for new people. But what about your long-term members? After all, grandfathering has been a long-term part of the culture in CrossFit gyms. And while the concept of rewarding loyalty is great, connecting it to membership revenue doesn’t make business sense.
For this group, think about options like an incremental increase, instead of all at once. Also, consider speaking with each one privately. Explain why you’re raising rates and be willing to listen to concerns. But with that in mind, be firm and unapologetic about your business decision. Chances are, a majority will understand. And you might even get, “It’s about time!”
2. Implement Hybrid Memberships.
Hybrid memberships are recurring monthly memberships that bundle various services. For example, a hybrid client might attend two classes and one personal training session per week. Or they might take three classes weekly, along with a monthly nutrition coaching session.
Check this out: Data shows that the average gym membership pricing for a group class membership at a CrossFit gym is $165 a month. However, the average monthly cost of a hybrid membership is $337.
In this sense, it seems like a no-brainer for the small gym owner. Start offering hybrid memberships.
For members, the value is in the results. First, they get one-on-one coaching toward their specific goals. Second, they still get the social benefit of working out in class with the community. And they’re willing to pay for that value.
One thing to note is that switching to a hybrid model with your gym membership pricing doesn’t have to be done all at once. Some gyms have seen success with offering hybrids as a base membership option for new clients. Or choosing a handful of your most motivated members as a pilot group. Then, as existing clients see coaches working one-on-one with other members, they inquire naturally. And you can build the program as you go.
3. Explore Other Services or Products.
When members sign up at your gym, they’re looking to you for advice on how to get the best results. That generally starts with fitness guidance, followed by nutrition suggestions. But what about other services and products that can help with their goals?
Chances are, some of your members are already buying supplements elsewhere. They might also be paying for a sauna or cold plunge membership. They’re spending the money, just not in your gym. So why not provide them with more value by offering these things in house? By including them in your gym membership pricing - or as an add-on - you’re providing the value of convenience.
Plus, never underestimate the opportunities for apparel and branded merchandise sales!
Here are a few recent blogs to get you started:
- Five Ways to Increase Gym Revenue by Selling Supplements
- Beyond Apparel: Six Merchandise Ideas to Increase Gym Revenue
- The Ultimate Guide to Increasing Gym Revenue with Retail Sales
Pro Tip: Want to learn which PushPress products can help you run your gym more efficiently, and grow? Schedule a demo with our team today. We’d love to help!
In Summary: Start Charging What You’re Worth.
If you’ve ever wondered whether you’re not charging enough for a service that helps people live healthier, happier lives, here’s a thought. People are willing to pay $300 for Apple AirPod Pros. They’ll shell out $30 for a poolside cocktail at a Las Vegas hotel. Yet we, as gym owners, struggle with the idea of increasing gym membership pricing. We often have an inner narrative that says, ‘My members won’t be willing to pay more.’
The truth is, if people see value, they will pay.
Start by calculating your new rates and communicating the increase to members. As part of that calculation, explore hybrid memberships as a way to boost your ACV. And finally, consider other products and services that your members might be paying for elsewhere. These three steps can significantly increase gym revenue, and help grow your gym for years to come.
