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How oſt en is it OK to raise dues? Q
No one likes to raise prices. And the fi tness industry is no different. “Is there an
How oſten is it OK to raise dues?
netNo one likes to have to raise prices. And the fitness industry is no different. increasing club membership dues. In my experience, there are questions asks how often is it OK to raise membership due . Brad Wilkins, Justin Tamsett and Wayne Westwood each give their opinion on the b st amount of time in between each ease.
This week's Ask an Industry Leader typically two reasons clubs will raise du s: 1) to pass on any oper- ational burden to the consumer, and 2) due to increased perceived value through club improve- incrments (e.g., capital improve- ments, product and/or service offerings, etc.). Our goal as club operators should be to do both; and you should address how you are going to accomplish this goal through your annual strategic planning process. Therefore, I am one who typically favours annual dues increases. Now you do need to have both internal (inside the club) and external (outside the club) eco- wilnomic stability. For an example, this club member hip dues. In my experi- ence, there are typic lly two reasons clubs will raise dues; 1) is to pass on any operational burden to the consum- er, and 2) due to increased perceived value through club improvements (e.g. cap tal impr vements, product and/ or service offerings, etc…). Our goal as club operators should be to do both; and you should address how you are going to accomplish this goal through your annual strategic planning pro- cess. Therefore, I am one who typical- ly favors annual dues increases. Now I do preface this with you have to have
A
Read on for their answers. “Is there an industry average for how
often clubs increase membership dues? Every year, every three years, every five years? What is common practice for increasing dues?”
A: Throughout the industry you l find many practices for increasing past rec ssion (external) caused dif- fi cult waters to navigate through for the majority of club operators. For most of us, raising dues was not a realistic option; we were just try- ing to hold on during this challeng- ing economic time and mitigate our losses by controlling expenses. But as the external economy stabilizes, club operators who have focused on main- taining internal economic stability and increasing perceived value should be primed to get back on track with a strategic and progressive dues struc- ture format.
Brad Wilkins Vice President and General Manager Cooper Fitness Center/Cooper Spa
16 Fitness Business Canada July/August 2013 16 Fitness Business Canada July/August 2013
Throughout the industry you will fi nd many practices for
industry average for how often clubs increase membership
increasing dues?” Image Jomphong ,FreeDigitalPhotos.
dues? Every year, every three years, every five years? What is common practice for
Brad Wilkins Vice President and General Manager Cooper Fitness Center/Cooper Spa
bwilkins@cooperfitnesscenter.com
both internal (inside the club) and external (outside the club) economic stability. For an example, this past recession (external) caused difficult wa- ters to navigate through for the majority of club operators. For most of us, raising dues was not a realistic option; because we were just trying to hold on during this challenging economic time, and mitigate our losses by con- trolling expenses. But, as the external economy stabilizes, club operators who have focused on maintaining internal economic stability, and who have focused on increasing perceived value, should be primed to get back on track with a strategic and progressive dues structure format.
possibly have not increased the dues enough. My argument for
A: There is no industry average. There are several schools of thought
around increasing dues and from my experience it comes down to the phi- losophy of the owner.
My philosophy is shaped by the fact that ALL expenses for running a
business increase annually, so if you don’t increase your dues you are tak- ing from your bottom line.
not increasing the dues annually is that when you do need to increase them, you will have to increase them by a larger amount to cover increased expenses. Therefore, I prefer small, regular increments as opposed to large, irregular increments. The decision you
I believe the best business decision is to increase dues annually on the
same date each year. I would ensure the increase is written into my mem- bership conditions and also provide 60 days written notice. While I think you could have the increase a set % of the dues, I would prefer not to stip- ulate, giving me that flexibility to be either or greater or less than the stat- ed amount.
I also believe if you increase your dues and no-one cancels, then you
possibly have not increased the dues enough. My argument for not increasing the dues annually is that when you do
need to increase them, you will have to increase them by a larger amount to cover increased expenses. Therefore, I prefer small, regular increments as opposed to large, irregular increments.
have to make is to whether you increase just new members or your total membership base. I see the logic in rewarding loyalty for current members and therefore not chang- ing their dues. However, remember expenses to run a business are always increasing, so I would increase all mem- bers’ dues. My strategy would
A
be increasing the dues for new members four
There is no industry average. There are several schools of thought around increasing dues and from my experi- ence it comes down to the philosophy of the owner.
crease all members’ dues.
members or your total membership base. I see the logic in rewarding l y- to feel more comfortable with the
The decision you have to make is to whether you increase just new for current members. This allows you
months prior to increasing the dues
alty for current members and therefore not changing their dues. However, new dues and ensures that they are
My philosophy is shaped by the fact that ALL expenses for running a busi- ness increase annually, so if you don’t increase your dues you are taking from your botltom line.
I believe the best business decision
Justin Tamsett Owner Active Management
jt@activemgmt.com.au
is to increase dues annually on the same date each year. I would ensure the increase is written into my membership conditions and also provide 60 days written notice. While I think you could have the increase a set percentage of the dues, I would prefer not to stipulate, giv- ing me that fl exibility to be greater or less than the stated amount. I also believe if you increase your dues and no-one cancels, then you
prior to increasing the dues on current members. This allows you to feel months.
Justin Tamsett Owner Active Management
My strategy would be increasing the dues for new members 4 months have ‘put off’ their price rise for four
remember expenses to run a business are always i creasing, so I would in- appropriately priced based on your sales results. You can also sell the loy- alty reward by telling members you
more comfortable with the new dues and ensure that they are appropriate- y priced based on your sales results. You can also sell the loyalty reward by telling memb rs you have ‘put off’ their price rise for 4 months.
Reprinted with permission from IHRSA. For more information visit:
www.ihrsa.org/industryleader
®
Reprinted with permission from IHRSA. For more information visit:
www.ihrsa.org/industryleader
®
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