Are high satisfaction
levels among members a vital prerequisite to any price rise?
PHOTO:
WWW.SHUTTERSTOCK.COM/WILLIAM PERUGRINI
TIM BAKER Touchstone Partners • Director
“C
lubs shouldn’t be frightened about price increases: it’s a perfectly
reasonable thing to do and everybody’s aware that price increases are a fact of life. However, it’s important to understand the membership and the local competition first. Clubs must be aware of why their members come to them
and what they’re saying about them. However, if you don’t already know your members, don’t do a survey right before a price increase; it will make them wary of any future surveys. There’s more scope for a price increase with loyal members, although it’s important not to exploit them. Clubs must also do a competition audit to see how they compare. A one-off 5 per cent rise works better than nominal annual
increases. Members should be sent a letter explaining the reasons for the rise. Options for member retention could also be offered, such as freezing their membership at the current rate if they pay for a year upfront. It’s important to monitor the impact. Members should be
classified into active, sleepers, reasonably active and so on. If too many leave from one group, they could be tempted back with some special offers. One downside of a price increase is that sleeping members are more likely to leave.
” July 2013 © Cybertrek 2013
BAARD WINDINGSTAD Evo Fitness • CEO
“O
nly monopolies and the public sector can easily implement a price
increase. In a competitive market like health and fitness, it’s important to balance the costs and margins of your business against what the competition is offering. Prior to an increase, clubs should know about each of these points. Another issue for the health and fitness industry is that
historically the business is known for its binding contracts, so clubs don’t actually know much about the loyalty of their members. Evo Fitness is built on a non-binding contract, so people can leave when they like. This means we have to keep standards high, and we also have to know our members. At Evo Fitness, we have written into the contract that we
can increase the price on an annual basis by up to 3 per cent, without any notice. This means that we can easily implement a price increase, because our members have agreed to the terms and conditions. Despite this, we have not increased the cost of memberships since 2010 because of the local competition. Our costs have gone up in this time, so our margins are being squeezed. As a result, we’re planning to introduce a less than 3 per cent rise next January. It’s a small increase because the market is tough, but we’re not expecting members to leave.
” Read Health Club Management online at
healthclubmanagement.co.uk/digital 31
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94