Run the Numbers
Industry veterans agree that there isn’t one definitive way to successfully implement dues increases.
“This is more art than science, and our pricing must connect to our brand and brand promise,” Carlson says. “We focus on a slight price increase every two years, but I’ll admit that very little science goes into this.”
That said, pricing adjustments must be thoughtful and purposeful. “When, where, and how any brand raises prices should be very strategic, and a business can only ask for more when it gives more,” Scartozzi suggests.
Some fitness centers opt for a planned annual or biannual dues increase to reduce surprise or pushback.
“When you provide what members deserve and keep things current, raising prices 3%-5% every one to two years will not be a big issue,” says Larry Conner, CPA, a business and financial consultant in the fitness industry. “Continue to invest in the products you sell, and members will understand.”
Studios have had a pricing problem for some time, according to Kuecker. "Most studios have priced based on competition and their own perceived value, not on their demographics, operating expenses, or behavioral economics. We recommend raising prices once a year to accommodate the increased cost of living."
Adjusting dues can look different among facilities, such as increases impacting all members, grandfathering in existing members, or providing tiered options, which are popular in HVLP facilities. Consumers are attracted by the low price, but clubs offer several membership levels to boost revenue.
"Obviously, it’s important to do the math," Saracco says. "Some facilities may choose a flat dollar amount, while others use a straight percentage based on inflation, rent, and more."
Communication and Cancellations
Saracco recommends using email, SMS, social media, in-app push notifications, and mailing a letter to communicate a price change to members.
“Communication is the fundamental building block of all successful relationships,” he says. “Tell members why you’re increasing prices so they understand that you’re paying employees more, making capital investments, signing a new lease, or whatever.”
Discover Strength does just that via an email to members about price increases one month before they take effect, explaining that funds are allocated for pay raises, new equipment, remodeling, 401K company match, and health insurance.
Kuecker advocates transparent pricing for studios that spells out where each dollar is allocated for a $25 class, for instance.
“By showing your clients how you earn a living, it makes pricing conversations much easier,” she says. “Nearly everyone can understand increasing pricing to pay your team more, better support your clients, and ensure the best experience.”
Also be sure to equip your team to answer members’ questions. “Staff training is critical so everyone is on the same page before the member communication goes out,” Saracco suggests. “Hold a meeting, role play, and have a FAQ cheat sheet to prepare your team to address concerns in a positive, productive way.”
Does a price increase automatically mean increased cancellations? Tock says no. "When our REX clubs have raised pricing recently, none have seen a spike in cancellations. But they provide outstanding experiences
It's all about value, Kuecker adds. "What's most important is to price with perceived value. That can trump what one ‘expects’ to pay every single time."
But Saracco acknowledges that some attrition may result. "Nobody likes to have prices raised, and you can’t stop people from leaving. But you can protect yourself by creating true value, building a winning community, and making your facility THE fitness destination in your market."
Cancellations can be attributable to other reasons as well. "Price increases don’t necessarily lead to cancellations, which are more often a byproduct of other factors, like club experience or competitors with better offerings and value," Scartozzi points out.
The Good News
Price changes come with any membership business. Regardless of price point, operators should be optimistic because the industry is growing and gaining visibility.
“The fitness industry is booming right now, and memberships and revenue are up,” Saracco says.
As the perceived value of gyms continues to grow, the cost of dues is only one part of an important offering.
"While there are pricing caps beyond which some clients are unwilling to spend, the good news is that fitness consumers are less price-sensitive than 20 years ago," Kuecker says. "They’re more willing to absorb these costs for something they love."
