Many Gyms today are dropping their prices to beat their competition and some of them are Gyms that provide very high quality equipment. It is a very tempting model - all you have to do is drop some prices and as you already have some fixed overheads - dropping your price might actually increase your revenue by increasing sales.
Many Gym owners lead to the above conclusion and drop their prices and in effect drop the quality of the product that they had set out to achieve. When you drop your prices, essentially 2 things happen:
- A lot of people decide to join your Gym because you are offering a great product at dirt-cheap prices but suddenly your Gym is over-capacity and your clients start to think that you don't really have that great a product as they have to wait so much to get on the treadmill.
- You don't have enough profit margin to hire enough competent staff to satisfy all our clients.
So, as a result the service that was once considered Premium is now considered an average service that actually deserves nothing more than what you are asking. We understand that if this model makes money for you then you really can't complain - but will it really make money? A price race is really just a race to the bottom. How can you stop the neighbouring Gym from dropping their prices to 900? And if they drop their price and all your clients are in your Gym only because they want the cheapest Gym in town then they will hop on to the next one. By competing solely on price you will never have any Brand loyalty.
This could become the worst financial decision you have ever taken as it is very hard to raise your prices once you have dropped them so much.
There are even more problems with this model - to generate any kind of serious revenue you need a very BIG volume of customers - it is probable that you don't even have enough potential members in your area.
This kind of pricing strategy turns Fitness service into a commodity and your Gym is better than that. You are providing your members with a better way of living their lives - and you should be able to charge a little more for some quality services.
If you are providing the best service in town then your prices should show that as well. Learn more on How to make your Gym a Premium Gymand more managing and marketing tips on our Blog.