The Dos and Don’ts of Membership Discounts

Gym membership pricing and discounting is a debatable topic among fitness business owners. Especially when you’re starting a gym, discounting memberships to get people in the door is tempting.

Some gym owners believe offering promo pricing is considered a great marketing effort. Others lean toward discounts to honor people like police officers and firefighters.

However, seasoned gym owners will generally tell you to steer clear of the promos and discounts. Many gym-mentoring experts agree, for various reasons.

First, you’re attracting the wrong people. Your typical “Groupon crew” are just there for the deal, then off to another gym with another cheap offer. Similarly, price-sensitive clients will always be looking for the best deal. So as soon as they find a lower price, regardless of the service, they’re out.

Second, in regards to profession-based discounts, the reality is that people appreciate the discount the first time they get it. But then the appreciation fades because it’s just the price they come to expect.

Setting A Standard For Value And Price.

Ultimately, when you’re starting a gym, your goal is to attract the clients you really want. This happens when you offer value and a solution to their problem. Then, when they believe you can help, they will pay whatever you’re asking.

Here are two things to consider:

1. You Sell A Service, Not A Product.

When a business selling physical products runs out of inventory, they (hopefully) restock and continue to sell. Their inventory might not be infinite but the concept is that they’re able to create more.

On the other hand, you’re selling a service and your time is finite. Therefore, you can start by calculating the amount of money it will take to “use up” your time. In other words, you have limited inventory when it comes to your schedule, so discounting it isn’t the smart play.

2. Discounts Devalue Your Service.

People come to you and your gym for help with something they can’t do on their own. They need your expertise and that’s the value you’re providing them. Don’t devalue your services by offering a discount.

Every time you offer 10% off or “get a month free with a 12-month membership,” you’re devaluing your services. Services that people intended to pay full price for, especially when they know they’re unable to achieve their goals on their own.

This is even more true when you’re starting a gym. You don’t want to set the precedent of members who’ll harbor a negotiating mindset for years down the road.

The Dos And Don’ts Of Discounting When Starting A Gym.

1. Don’t Discount Your Core Services.

For most gyms, core services include things like membership, personal training and nutrition coaching.

Offering a discount on any of your core services is detrimental for two reasons. First, you’re devaluing the biggest revenue-drivers for your gym. Second, you run the risk of upsetting your current, loyal members.

If your community hears that new members are getting a better deal then those who’ve supported your business for years, they’re likely to feel slighted.

For a further example, let’s say you offer a promo on your gym’s onboarding program. Once per quarter, you reduce the normal fee by 50 percent. Your members may start to catch on to this trend. So even though a friend is interested in getting started right away, your member tells them to wait until the promo happens.

Not only does this decrease your revenue but can lead to dry spells in between promo periods. Especially when you’re starting a gym, this can be a road block to your growth plans.

Pro Tip: Looking for more help with starting your gym? The PushPress team is here for you. Download the Gym Startup Guide today

2. Do Consider A Promo For Specific Programs.

With the above in mind, there are some gym promos that can be run successfully to help you reach specific goals.

Consider offering a promotional discount on specific programs or products.

For example, you may have a slower, mid-morning class time that you’re looking to grow. While you don’t want to offer a discount on the membership to attend for the long term, consider an intro promo. Offer a discounted one-month trial, marketed to local stay-at-home moms.

Another example is aimed at growing your nutrition coaching program. Again, discounting the program isn’t the best route. But you could offer a discount on a nutrition seminar or challenge as the entry point to coaching.

Finally, your members would probably love to stock up on gym apparel and rep your brand. Before an upcoming gym merchandise pre-order, offer a discount on your current inventory to clear it out and drive some additional revenue.

3. Don’t Deceive Customers.

Unfortunately, the waters have been muddied in the past by gyms who have been deceptive for new members. As an example, owners have intentionally inflated the cost of membership when they’re starting a gym, so it look like they’re always offering a discount.

If you want to run a reputable business with integrity, don’t try to trick your customers.

People are savvy. Especially the people you actually want in your gym. Most leads will be exploring a variety of options in your area. So if your “regular” rate is nowhere in the ballpark of the competition, this could raise a red flag.

4. Do Consider Niche Demographic Promos.

Some select markets are more prone to have a niche demographic. For instance, your gym might be in a college town or near a military base. In that situation, there may be an expectation for a correlating discount.

In this situation, it may be wise to cater to this expectation, with one major caveat: Your services still need to be profitable, even at the discounted rate. This should be a long-term strategy, especially a market like a college town.

5. Don’t Grandfather Rates.

This is a “read that again” moment. Seasoned gym owners may have differing views on many topics but they’ll agree on this one. Don’t grandfather your rates.

Many fitness business owners initially view it as a way to reward their loyal, long-term members. But consider this: Imagine you offered a deep discount when you were starting a gym. What if, ten years down the road, some of your members are paying 50 percent less than the rest of your gym?

Remember, it’s pretty rare for someone to sign up for your gym expecting that their rate will be locked in forever. That’s simply not the nature of the industry anymore.

Instead, they know that rates will occasionally need to go up in order for your business to be sustainable and grow. So it’s okay to outline that the expectation early, then people will be more likely to accept it.

6. Do Offer A Great Referral Program.

First things first, a strong referral program can be incredibly impactful for your gym’s revenue and retention. If you’ve built a solid community, and you encourage your members to refer like-minded people, you’ll thrive.

However, the key to success is in the rewards structure.

It might be tempting to offer a free month or a membership discount for either the referring member or their guest. Instead, consider surprising the referring member with a thank you card and a gift. It could be anything from a Starbucks gift card to a custom gym duffel bag.

Present the gift to the referring member in front of the whole class. This demonstrates your appreciation to everyone, and reminds others to invite their own friends and family.

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7. Don’t Be Afraid To Explain Your Policies.

The bottom line is that, from starting a gym to being a long-term, successful owner, you get to call the shots. When you decide on the policy regarding discounts, stand your ground.

For example, when someone comes in asking if you offer discounts for teachers, simply say, “We don’t offer discounts.”

You do not need to over-explain. Your business is a professional service with (as discussed above) the finite resource of time. You’ll sleep better at night knowing you offer the same service for the same price to everyone who walks through your doors.

8. Do Use Charitable Opportunities In Your Community.

One exception to the “don’t give things away for free” rule is charitable causes. It can often be useful to consider donating services for a specific cause. For example, donate personal training sessions or nutrition coaching for a silent auction.

The benefits are two-fold. You’re doing good in the community and the strategy can be considered marketing outreach as well. It gives your fitness business some visibility and shows that you’re trying to help a local organization. Plus, you might just land a new, long-term client.

In Summary: Steer Clear Of Discounts When Starting A Gym

When you’re first starting a gym, it can be tempting to discount your prices as a sales and marketing tactic. But heed the advice of fitness business owners who have been running successful gyms for years. Charge what you’re worth and avoid the discounts.

This will help your clients see the value in the services you provide, in addition to the fact that your time is finite. Start your client relationships off on the right foot by showing them how you can help them. Once you’ve done that, they’ll be willing to pay a price that’s fair to both sides.

REMINDER: The Gym Startup Guide is designed to help with every stage of running your fitness business. Download your copy today

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