Group Training Programs: Picking The Right Price Points by Bob & Jolyn Esquerre

DATELINE JULY 20, 2009. In the past 3 weeks I have heard either the following comments or I have been drawn into discussions about these comments:
1. I don’t think I can get away with charging more money for my TRX Group Training Program because the Club is already charging $10 per person/per class!
2. I don’t want to spend money to launch the TRX Program because we do not have the money in the budget!
3. We have to cancel some fee-based Group Training Classes because the attendance is dropping!
4. My Group Training Program will not be successful! My Trainers refuse to support the concept because there isn’t enough money in it for them!
5. How do I know that my members will pay for Group Training Programs?
6. I do not know how to distinguish a fee-based Group Training Program from our Group Exercise Classes which are free?
Who are the individuals who are making these statements…Club Owners, Corporate Executives, Club Fitness Managers and Fitness Professionals!

Each of these 6 comments, statement or observations have a common and consistent thread……the commentators have a poor understanding or have a lack of appreciation for one or more of the following 12 points:
1. They do not know how to define the member experience;
2. They do not know how to manage the member experience;
3. They do not know how to continually optimize [i.e. reinvent] the member experience;
4. They do not know how to create programming value;
5. They do not know how to manage programming value;
6. They do not know how to launch a new value-added program;
7. The commentators do not believe that they can add value to their programs;
8. The commentators do not know how to stimulate consumer “demand”;
9. The commentators do not understand the correlation between value and price;
10. The commentators do not know how to coach their employees on “how-to” manage the member experience;
11. The commentators fail to appreciate the fact that club members are really educated consumers who will respond in a positive, receptive manner, if and only if “value” is truly embedded in a new fee based program; and
12. The commentators do not appreciate the need to incentivize their fitness professionals to make fee-based programs successful.

What Determines the Right Price?…… The “V” word………VALUE!

What Determines “Value”?
There are several theories about how to determine “Value”! The subjective theory of value is an economic theory that states….”to possess value, an object or service must be useful and scarce with the extent of that value dependent on the ability of an object or service to satisfy “the wants” and/or “the needs” of any given individual.  If the service is wanted, it has value! A service can be wanted, it we can guarantee specific but very different outcomes. If we create value in the eyes of the educated consumer, they will want it! If we make the service scarce enough or hard to find, the service becomes valuable! They will want the service!

What Are The Components Of Value?
1. The new program must be extremely different and unique;
2. The new program must have very specific & distinct goals and objectives;
3. The Fitness Professionals who deliver these programs must believe that they can deliver an enhanced type of value with very unique results and/or outcomes;
4. The new program must use very different equipment that is not available in traditional non-fee based classes;
5. The new Program must be delivered by specialists; after they had obtained specialized training, they will be positioned as Professional Fitness Coaches and not Instructors or Trainers; and
6. The schedule must be strategically limited and restricted to stimulate demand.

Setting The Right Price
Once the value proposition is established for the Group Training Program, the price must be set. In some circles, clubs examine what other clubs &/or their competitors are charging for similar services. However, if your program is unique enough, you must determine & control the price points. The following 9 considerations will determine the value/price relationship for your Group Training Program:
1. What are your price points for your current Personal Training Programs?
2. What is your current payout to your Personal Trainers?;
3. What is your net income from your current Personal Training Programs?;
4. What is your current pay structure for your Group Exercise Instructors?;
5. What are your costs associated with launching your Group Training Program?;
6. What are the skill sets of your Group Training Coaches?;
7. How much will your incentive bonus be for your Group Training Coaches?;
8. How many Sessions will be in each Group Training Program?;
9. How many fee-based Group Training Sessions will be scheduled per week?

The benefits of a successfully priced Group Training Program include the following 11 points, as a minimum:
1. The strengthening of the Club’s Brand [i.e. the Club’s Value Proposition
2. The strengthens the Club’s Competitive-Points-of-Difference
3. The reinforcement of the Club’s Customer Relationship Program
4. An increase in Gross Income to the Club
5. A higher Profit Margin to the Club [i.e. Increase in Net Income]
6. Lower Club Member Attrition Rate
7. Higher Club Member Retention Rate
8. Higher Referral Rates from more satisfied Members
9. An increase Club Income per Member
10. An increase in Percentage of Non-Dues Revenue
11. An increase in Synergy of All Club Programs

Are your current Group Training Programs working for you?

GET YOUR COPY NOW!

If you want a sample copy of a priced Group Training Program

that reflects these concepts, please leave your name

and email address at the bottom of this blog.

 

Advertisement

21 Comments

Comments RSS TrackBack Identifier URI