One of the main concerns of those who have or want to open a gym is the pricing of the monthly fee. After all, this is an aspect that not only influences customer acquisition and loyalty , but also directly impacts the revenue of your business.
The ideal price is one that generates increasing profit, working as a strategy to avoid student dropout and default .
However, due to fierce competition and the different business models that exist in the fitness market, finding the ideal price becomes an even more challenging task.
According to IHRSA, Brazil ranks second in the world in terms of the number of official gyms, with around 35 thousand units, behind only the United States.
In this context, it is essential to keep in mind that the amount charged must balance customer satisfaction without forgetting the financial viability of your business.
Setting monthly membership prices for your gym cannot be a task based on assumptions. A price that is too high may not attract the desired target audience, making the sale even more difficult.
On the other hand, an excessively low price can raise doubts about the quality of your services and compromise the financial health of your Academy, causing it to always be in the red.
The best strategy, therefore, is to take the time to analyze your business, the market in which it operates and then carry out a careful calculation of your finances, until you arrive at the most appropriate pricing method for your Academy.
But how do you know if you are charging too much or too little? And how do you differentiate yourself from the competition and offer a quality service without compromising your finances?
In this text, we have gathered some valuable tips that will help you with strategic and efficient pricing of monthly fees at your gym.
Based on these guidelines, you will be able to make informed decisions, balancing customer satisfaction with the financial health of your business. Check it out:
1. Know your target audience
Understand the profile of your potential customers. Consider demographic factors, needs, consumer behavior and financial capacity.
For example, if you cater to a high-end audience, who seek exclusivity, comfort and technology, you can charge a higher monthly fee.
On the other hand, if your gym caters to a popular audience, looking for practicality, savings and results, a lower price may be more attractive.
This information will help you set more attractive india business fax list and affordable prices for your target audience, without compromising your gym's revenue.
2. Analyze the competition
Do some market research to understand the prices charged by other gyms in your area.
This will give you an idea of the average prices and positioning of your competitors. It is also important to look at the services they offer, the quality of their facilities and, most importantly, how you differentiate yourself from them.
This information is important for you to position your Academy in the market and define a competitive pricing strategy .
The important thing is that you have a clear justification for your price and that it is aligned with your market positioning. Communicate to your audience the benefits and advantages of training at your gym, demonstrating why your price is fair and appropriate.
When a competitor offers more affordable prices, it is important not to rush into following their lead. Remember that the price you currently charge takes into account the specific costs and expenses of your gym!
By reducing your prices, you may be compromising your profitability. Before making this decision, you will first need to evaluate and reduce your costs strategically.
3. Know your costs
Before setting the monthly fee for your gym, it is essential to calculate and understand all of your operating costs. How much does it cost to keep your gym running? What are your fixed and variable costs?
Fixed costs are those that do not depend on the volume of sales or customers, such as rent, water, electricity, telephone, internet, etc. Variable costs are those that vary according to the volume of sales or customers, such as commissions, consumables, maintenance, among others.
To calculate your total costs, simply add your fixed costs to your variable costs. This amount represents how much you need to earn to cover your expenses and avoid potential losses at your gym.
Those who are not clear about their costs cannot establish an efficient and profitable pricing policy.
However, by obtaining detailed knowledge of your costs, you will be able to establish a monthly fee that reflects the value of your services offered, which is fair and, at the same time, viable for the financial sustainability of your Academy.
4. Estimate your demand
How many clients do you expect to have in your gym? What is the average occupancy rate of your equipment and rooms? What is the cancellation rate of your clients?
This information is essential for you to project your revenue and establish an adequate profit margin .
To calculate your gross revenue, simply multiply the number of clients by the monthly fee for your gym. To determine your profit, simply subtract your total costs from your gross revenue. This analysis gives you a more accurate picture of your financial return.
Ideally, you should have a profit margin that is sufficient to cover your investment and allow your business to grow . It is also important to note that these calculations must be constantly monitored and updated as your gym develops.
By understanding these numbers and setting realistic financial goals, you’ll be prepared to make strategic decisions. This includes adjusting your monthly payment, optimizing costs, identifying growth opportunities, and anticipating potential challenges.
5. Perform periodic tests and adjustments
Pricing monthly fees at your gym should be a dynamic and continuous process .
It is important to always keep an eye on your Academy's financial performance, customer satisfaction and market trends .
Don't be afraid to experiment with different price points and see how customers respond.
Keep a close eye on your monthly fees and be ready to make adjustments when necessary. If you notice that you’re losing a lot of customers due to pricing, you may need to reevaluate your strategy.
Pricing flexibility can bring benefits such as attracting new customers and retaining existing ones. By adapting to market demands and customer expectations, you demonstrate your commitment to providing quality service at a fair price.
6. Offer flexible plan options
It is essential to recognize that not all clients want or can pay a high monthly fee at a gym.
For this reason, it is important to offer different plan and package options, with varying prices. This will allow you to serve different market segments and expand your customer base.
Offering plans with varying prices also provides a competitive advantage, allowing you to serve different customer profiles and stand out in the fitness market.
You will be able to attract both those students who are looking for a greater investment in their health and well-being, as well as those who prefer a more economical option.
By providing affordable options that are aligned with different needs, you demonstrate a commitment to offering a comprehensive service that is adapted to the different financial realities of your students.
7. Value your difference
Analyze and highlight the differences in your Academy, such as the quality of service , the variety of modalities, the qualification of professionals and the extra services offered.
These aspects not only add value to the student experience, but also justify charging a higher monthly fee.
Furthermore, it is essential to show potential clients what makes your Academy unique and why it is worth choosing.
The higher the value perceived by students, the more willing they will be to invest in your Academy and the greater the margin you will have to set your prices.
8. Set your price
To set the monthly fee for your gym, you must take into account all the factors we have seen so far.
Additionally, a simple formula can help you set your prices:
Price = (Costs + Profit) / Demand
This formula allows you to find a price that covers your costs, generates the desired profit and is compatible with expected demand.
For example, suppose you have the following data:
- Total costs: R$ 50,000.00
- Profit margin: 20%
- Demand: 500 customers
Applying the formula, we have:
Price = (50,000 + 10,000) / 500
Price = R$ 120.00
Therefore, the monthly fee to be charged would be R$120.00.
Of course, this is a simplified way of defining the price, which does not take into account other aspects such as demand flexibility, market seasonality, promotions and discounts.
Oh, and another very important thing, don't forget to take into account that some of your students may become delinquent. Therefore, it is recommended that you repeat the calculation considering the delinquency rate in your Academy.
Therefore, it is important that you carry out a more detailed analysis and review your price periodically, according to changes in the market and your Academy.
Students' monthly fees don't pay the Academy's bills... what should I do?
After carefully analyzing your numbers, you realized that your Academy's expenses exceed the amount you collect from student fees.
In this scenario, you have two options before closing your doors: reduce expenses or increase the value of services provided.
One way to increase your profit margin is to invest in improvements and specializations that allow you to raise your prices. By providing a higher quality service, your customers are likely to be willing to pay more.
Additionally, it is essential to act strategically and reshape various areas of your business, including sales , operations, and marketing . Any changes must be well researched and validated to avoid deviating from your goals.
In many cases, there are several expenses that can be reduced or eliminated from your budget.
For example, consider whether it is really necessary to keep the air conditioning on all the time. There is no point in having a modern appliance if it consumes a lot of energy and requires high maintenance costs, right?
Focusing on these details will allow you to maintain a healthy financial balance and continue offering a quality service.
Defined monthly fee amount? Learn how to charge strategically
The number of defaulters in Brazil grew further in April 2023, reaching 66.08 million consumers , according to CNDL (National Confederation of Shopkeepers) and SPC Brasil (Credit Protection Service).
Maintaining the profitability of your business is essential, and when dealing with defaults in a gym, choosing strategic collection methods becomes a priority.
Although offering different payment options, such as installments, annual payments and PIX is important, it is recurring billing that stands out as an accurate and efficient solution .
This payment method circumvents default without harming the student's credit.
In addition to avoiding default issues, recurring billing also offers payment guarantees to the manager. With this option, it is possible to increase student retention, ensuring a more stable and predictable revenue flow month after month.
Automate your Academy's financial management with a powerful system
Now that you've figured out how to price your services, it's essential to regularly monitor your metrics to ensure your pricing strategy is actually working.
But before you get lost in spreadsheets or papers, remember that your time is also very valuable ! Therefore, hire a management system to simplify the interpretation of your indicators and optimize your financial management.
There is nothing more advantageous than having a practical and efficient system , capable of helping you make the best decisions to boost your business, right?
With the SCA System , for example, you will be able to control your cash flow, receive monthly payments, manage income and expenses, create reports and much more. All of this quickly and easily .
SCA provides detailed financial analysis , based on data collected from your Academy, in a matter of seconds.
In addition, you will be able to intuitively view graphs of: cash flow , receipts by category , (registrations, monthly payments, sales and services), receipts by form, (cash, machine, PIX, deposit, check,…), expenses by category and much more.
And these are just some of the countless graphs that will help you closely monitor your Academy's financial performance in a simple and practical way.
How can the SCA System help?
The SCA System is a complete and powerful platform that helps thousands of gyms throughout Brazil to increase their profits, improve their organization and avoid defaulting .
With advanced management features, access control, automatic billing and data analysis, the system is the perfect solution to enhance your gym's results.
And that's not all, we have an incredible option for you! The SCA System offers the convenience of Recurring Billing . With it, even if the student doesn't go to the gym, the due date arrives and the system automatically charges the payment.
Have you heard of Netflix or Spotify? Then your gym will have a billing system similar to the one they use. In other words, the student registers the card once and the billing is done automatically every month.
