Pricing Personal Training Services
For most personal trainers the business side of the profession is a far less desirable environment to spend time on than the actual training side. When personal trainers are working with clients the intrapersonal interactions are generally supportive and functions much like a team approach, where client and trainer collectively work together for a better outcome. Whereas when the business aspects of personal training occur, the selling process and money exchange activities place the client and trainer on opposite sides of the cash register. Pricing and selling personal training do not have to be complicated tasks, but they do require thoughtful planning. Many trainers undersell their services because they are uncomfortable with the situation or do not fully recognize their worth. The reality is, it is tough to put a price on one’s health but certainly value needs to be assigned based on some objective metric.
Trainers may set their worth by education standards, experience, or the number of certifications they maintain, but most consumers see very little difference between trainer capabilities. Therefore, value and pricing should be based on specific contributing factors which may be hard costs, such as overhead or perhaps more socioeconomic drivers. A good starting point is to analyze the competition in the area. If there is little to no competition in the surrounding area, a higher price may be charged because you have a substantial competitive advantage. In most cases though, the advantage is not sustainable. The higher pricing tends to attract competition and as supply increases, like any market, prices tend to shift downward based on demand. This though will be based on the service culture established and high “country club” pricing may be maintained if the services and economic dynamics support it. If not, other pricing strategies can flow out of a high initial offering price, but price slashing is never a good idea because it devalues the product.
When competition or environment place strain on a pricing strategy, using product line pricing or optional product pricing may greatly assist in supporting revenues. Product Line Pricing is where there is a range of products or services and the pricing reflects the benefits of parts of the range. For example, a basic personal training program package may be $500, add two specialized sport training classes and its $550, whereas the personal training program package plus sports training package costs $650. The other concept is to use Optional Product Pricing. This method attempts to increase the amount a client will spend once they start to buy. Optional 'extras' may increase the overall price of the product or service but secure higher price with value added. For example, charging more for premium time slots, providing charted reports and physical profiles, or adding metabolic or dietary analysis in addition to the normal services.
If these services warrant additional charges independent of the initial product it makes sense to use Product Bundle Pricing. Product bundles collect complementary products and services and bundle them for better pricing. For instance, training sessions bundled with an added stretching session or massage or using a service menu not unlike the way a day spa bundles packages. It is important to show the price difference of the bundle when compared to the higher price a la carte items. This way people can see significant savings in the bundled options.
If the recession has taken its toll in the area, a temporary adjustment, key word temporary, may warrant using Promotional Pricing or Value Pricing. Pricing to promote a product is a very common application in selling. There are many examples of promotional pricing including approaches such as Buy One, Get One Free. But in personal training “free” should never be used. When free is used it devalues the service. Psychologically speaking, if the service is free it must not be worth much. Instead a loss leader approach should use concepts like “for a short period we will pay the initiation fee” or “we will cover the costs of ….” These terms provide ‘free’ without the devaluing of the product or service because someone has to pay for it. Value pricing on the other hand may also be presented for short terms and usually reflects a discount. This may be on new member sign-ups or a special temporary deal. Value pricing may be assigned to a seasonal “sale” when there is a connection between the consumer and the environment; “Four week summer weight loss program” in April, for instance. The program and value should have a defined size including a beginning and an end (always use expiration dates). When discounts are applied it is important to control for when they are used. You never want these programs to overflow into periods of high demand or they will cannibalize profits.
Also do not make the mistake of offering initial discounts with hopes of raising prices later. Although many companies offer a discount as an incentive to use or try a product or service with the hopes it will lead to future full price purchases, it rarely works out. Offering periodic discounts in the right manner serves price sensitive customers but it must not devalue a product in customers’ minds (see above). If a trial period is used, the product must be somehow smaller or of less value than the original and no longer offered in that size or price after the trial is over or the devaluation will impede future full price purchases. If they received the full size, full price service for an inexpensive price they will perceive the value to be exactly that price and when the price changes will not likely view it to be worth the money. This is why grocery and supplement companies give out small trial sizes but do not give away full size samples.
Another common error in pricing is using the “one price fits all” concept. Oftentimes customers are interested in a product but refrain from purchasing simply because the pricing plan doesn’t work for them. While some want to purchase outright, others may prefer a pricing option. It is the same concept of home arrangements, most want to buy a house outright but cannot afford it so they rent, lease, or subscribe to any number of mortgage options. Innovative pricing plans attract customers by providing service options. When terms are used, the price increases but the payment at any given time is more affordable. This can also be done by offering different versions of the service line. Rather than a “one product fits all” approach, an easy way to enhance profits and better serve customers is to offer good, better, and best versions – or more commonly silver, gold, and platinum programs. Although the silver is the lowest end of the line it still speaks to value, using bronze may not have the same effect. American Airlines noted this and uses Gold, Platinum, and Double Platinum to demonstrate high value at all levels. The idea is these options allow customers to choose how much to pay for a like, but tiered product line.
For any product or service, there are always customers who are willing to pay more for the same outcome than others. Using coupons or discount codes is another way to create differential pricing. Generally the service is the same but getting a discount involves tactics that create a challenge or barrier to some segment of the market. Price sensitive customers will be identified as those customers willing to deal with the hurdles. For example, customers who look for, cut out, and then redeem coupons are demonstrating their willingness to jump through the hurdles to receive lower pricing. These individuals are important to recognize, track, and sell to via selective marketing. If coupons seem a bit dated, discount codes are the 2010 version of the same concept. Placing the website on marketing pieces that require the client to go to the web to access the coupons or discount codes equally demonstrates the price sensitivity and may allow for point of purchase savings via electronic means. Your full price customers should be recognized similarly and appropriately marketed to as well.
Pricing and selling are very dynamic business concepts and therefore should follow a planned approach including tracking metrics to evaluate the effectiveness of the pricing strategy. Timing is a relevant component to the concept and therefore some trial and error is to be expected. An important step is to evaluate why or why not a pricing strategy was effective and to employ the best responses based on the market segment. A one size fits all approach may be easy but is not likely going to offer the best return on investment.