5 Steps For Pricing Your Virtual & In-Person Offers
Independent gym owners often struggle with setting prices. The process is more complex than usual these days, with the common addition of online training and hybrid services in the wake of the Covid-19 crisis.
Fitness Revolution leaders discussed this in a recent webinar. This is a recap of some of the key points covered in the webinar, which you can view on the page of resources we have gathered for you.
Remember that pricing should be set with objective intentionality and based on solid principles. This is the same whether we’re talking about in-person, virtual or hybrid offers.
Here are five steps to follow.
Always Be Making Money.
You need to be making money on every class or session. Find your break-even point by evaluating monthly expenses and spreading them out between your total offerings; figuring out how much it costs to run one class or session; and documenting that baseline by the month, week, and class or session.
For example, it if costs you $2,000 a month to run your business, and you run 40 sessions a month, your average cost is $50 per session.
Set A Price.
Start by figuring out pricing for your Core Offer (CO) and Front End Offer (FEO) or secondary offers. Remember, your core offer is the economic driver of your business. The FEO will typically be priced at around 75 percent of our core offer at a prorated rate.
Example: Your CO is 30 days of training at $200. Your FEO is 14 days of training, or $100. At 75 percent, that’s $75.
Frame Your Price.
To do this, you must know your audience and price appropriately. Luxury pricing won’t work if your audience is focused on bargains, and vice versa.
Learn the details about how to set prices to remove customer barriers. Did you ever wonder why prices are often set at $4.99 instead of $5? There are proven reasons for this. Use 99 cents for cheaper services ($19.99) and 95 cents for higher-priced items ($79.95). See the webinar for more useful insight on tactical pricing.
Think about when to raise your prices – at the start of a new year, perhaps, or when your operating costs have increased. Consider how to implement the increases. Will they be across the board, just for one program, or bundled together?
Again, be deliberate. Discount only with a strategic intention that aligns with your business direction. Is the value different on a virtual offering than the physical version? Or is this something new just for online? These kinds of questions speak to the change in supply or demand, and to the change in value of what you’re offering.
Avoid Pricing Mistakes.
Sometimes the easiest pricing strategy is to avoid common mistakes. So don’t price off your competition alone, don’t price yourself in the middle, and don’t default to discounting. Don’t try to please everyone, and similarly, don’t let your own beliefs or ambitions dictate your pricing. Remember: You’ve got to be objective about this.
Be sure to watch or review the webinar for more details. And please, schedule a time to talk with us in a free consultation with one of our Success Coaches now.