"If You Were To Increase Your Prices Right Now, What Would Your Clients Think?"
I originally wrote this for another website. That website has shown no signs of publishing it (or intention to do so), so now you get a free lesson in growing your PT business. Enjoy!
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"If You Were To Increase Your Prices Right Now, What Would Your Clients Think?"
I bet I know how you’d answer that question. But guess what?
You’re probably wrong.
As I sat in the middle of a room full of personal trainers just like me, this is the question that was asked of all of us. The answers that the various trainers came up with were an eye-opener. I thought I was insecure, but after this I felt like I must be one of the most self-respecting trainers in town.
The awkward truth is that it's normal for businesses to increase their prices periodically. I say awkward, because that’s how many personal trainers feel about this reality, but it really shouldn’t be awkward to us. After all, it is normal, isn’t it?
The Trap 8 out of 10 Personal Trainers Lock Themselves Into
You’re a middle class person from a middle class family, who have always earned middle class pay. $25-30/hr for a secure job sounds perfectly reasonable to you. So when you decided to become a personal trainer and heard that other trainers are charging twice that much, you became both excited and terrified. Excited about getting paid so much, and terrified of asking that much.
“Could I really be worth that much?” you ask yourself. “Will people really pay that much just for a workout?”
Then once you started working as a personal trainer, something really shocked you: that one guy in the gym who charges $150 for a session. You’re freaking out over one-third of that pay, while he’s charging an insanely high rate and seems completely unfazed by it all.
“What’s going on?” you ask.
You Really Can Be Worth That Much. Get Used To It.
If you’re struggling to believe that your services are worth $50/hr, then you’re really going to struggle with the reality that your charge out rate should be greater this year than it was last year. This is for three key reasons.
Firstly, prices should go up by about 3-4% per annum just to cover inflation (of course, inflation rates will vary depending on your location). So if you charged $60/hr this year, you should be charging about $62.50/hr next year just to get the same return on the time you give to your clients.
Experience also drives prices up, because with experience comes knowledge and understanding which leads to better results for your clients. Remember, while your income may come in the package of hourly sessions, from a client’s perspective, they aren’t buying time or even workouts – they’re buying results. As a basic sum, results = value, so as you get better at delivering results, your value increases.
As your experience (both working in your business and working on your business) increases, so should your demand for service. When the demand for your service or product increases, I won't say that your prices necessarily have to go up to reflect this, but they certainly could. After all, the market value of something is exactly what someone in their right mind is willing to pay for it.
Let’s run that through the calculator:
So, if you have more experience than you had a year ago, your demand has increased, and inflation has occurred, your prices should be increasing by more than 3-4% per annum over the long term. This should be expected.
The Reasons You Worry About This Are All In Your Head
In light of that, let’s reflect back on the original question. If you were to increase your prices right now, what would your clients think? There were a lot of trainers in the room that day. Can you guess what the array of answers to the original question looked like? Let's break it down:
I'll be honest, I'd have difficulty thinking of 15 objections to a price rise on my own. I'd have difficulty even thinking of five on my own. But 15? Really? Here are some of the objections the trainers around me came up with. Maybe you’ll resonate with some of these:
Increasing Your Price is a Good Thing
There were only three responses offered that reflected a brighter picture:
(You get exactly three guesses to figure out which response was mine.)
The truth is, 90% of the time, these last three responses are much closer to what you'll actually get. This is especially true if you use some tact while announcing the increase of your prices. Following is a simple strategy to handle this effectively:
• Set a date 4-6 weeks in advance.
• Write a personal letter to each of your current clients.
• In this letter, tell each client that, starting at the set date, all new members will be charged your new fee.
• Go on to say that because of their loyalty and commitment to training, your current clients' fee will only increase to an amount that's somewhere between their current fee and the new fee.
Here’s An Example
By Doing It This Way, What Do You Achieve?
You:
If you handle it this way, the majority of your clients will respond well. However, a small number of clients may still raise some of the objections listed above, or some other creative objections. If you know that your new asking price is right (given the equation used earlier), oftentimes, you can handle objections simply with confident diplomacy. But if someone does decide to stop training with you because of your new price...so what? I mean it.
So What If A Client Quits Because You Raised Your Price?
You raised your price because of increased experience and demand for service, didn't you? That means that there's someone in line waiting to pay the higher rate. But even if there isn't someone keen to take an old client’s place...still: so what? If you increase your price by 10%, and 10% of your clients drop out, you're now getting paid just as much for only 90% of the work. So even if you lose a client or two, you’re still in a better situation.
What You Can Do Right Now
The application here is to realise that there are always three factors driving an increase in the price of your time: experience, demand for service and inflation. Do not underestimate these factors. Expect the value of your services to increase, and be proactive in making that happen. Then charge accordingly. Look at it this way: if you don’t increase your rates to meet the growing value that you provide, then you are demeaning your business.
Your job today is to take some time to think about how long you’ve been training people and how you’ve changed as a trainer over the years. If there’s something you were teaching a year ago that you kick yourself for now, good! It means you’ve learned something and therefore are a better trainer now. And that means it’s time to plan how you’re going to charge more.
<><><>
Author: Ryan Ferguson
Alias: Goldfish
I originally wrote this for another website. That website has shown no signs of publishing it (or intention to do so), so now you get a free lesson in growing your PT business. Enjoy!
<><><>
"If You Were To Increase Your Prices Right Now, What Would Your Clients Think?"
I bet I know how you’d answer that question. But guess what?
You’re probably wrong.
As I sat in the middle of a room full of personal trainers just like me, this is the question that was asked of all of us. The answers that the various trainers came up with were an eye-opener. I thought I was insecure, but after this I felt like I must be one of the most self-respecting trainers in town.
The awkward truth is that it's normal for businesses to increase their prices periodically. I say awkward, because that’s how many personal trainers feel about this reality, but it really shouldn’t be awkward to us. After all, it is normal, isn’t it?
The Trap 8 out of 10 Personal Trainers Lock Themselves Into
You’re a middle class person from a middle class family, who have always earned middle class pay. $25-30/hr for a secure job sounds perfectly reasonable to you. So when you decided to become a personal trainer and heard that other trainers are charging twice that much, you became both excited and terrified. Excited about getting paid so much, and terrified of asking that much.
“Could I really be worth that much?” you ask yourself. “Will people really pay that much just for a workout?”
Then once you started working as a personal trainer, something really shocked you: that one guy in the gym who charges $150 for a session. You’re freaking out over one-third of that pay, while he’s charging an insanely high rate and seems completely unfazed by it all.
“What’s going on?” you ask.
You Really Can Be Worth That Much. Get Used To It.
If you’re struggling to believe that your services are worth $50/hr, then you’re really going to struggle with the reality that your charge out rate should be greater this year than it was last year. This is for three key reasons.
Firstly, prices should go up by about 3-4% per annum just to cover inflation (of course, inflation rates will vary depending on your location). So if you charged $60/hr this year, you should be charging about $62.50/hr next year just to get the same return on the time you give to your clients.
Experience also drives prices up, because with experience comes knowledge and understanding which leads to better results for your clients. Remember, while your income may come in the package of hourly sessions, from a client’s perspective, they aren’t buying time or even workouts – they’re buying results. As a basic sum, results = value, so as you get better at delivering results, your value increases.
As your experience (both working in your business and working on your business) increases, so should your demand for service. When the demand for your service or product increases, I won't say that your prices necessarily have to go up to reflect this, but they certainly could. After all, the market value of something is exactly what someone in their right mind is willing to pay for it.
Let’s run that through the calculator:
[rate] = [value] x [inflation]
[value] = [results] + [demand for service]
[results] are a function of [experience]
Therefore [rate] = [experience + demand for service] x [inflation]
[value] = [results] + [demand for service]
[results] are a function of [experience]
Therefore [rate] = [experience + demand for service] x [inflation]
So, if you have more experience than you had a year ago, your demand has increased, and inflation has occurred, your prices should be increasing by more than 3-4% per annum over the long term. This should be expected.
The Reasons You Worry About This Are All In Your Head
In light of that, let’s reflect back on the original question. If you were to increase your prices right now, what would your clients think? There were a lot of trainers in the room that day. Can you guess what the array of answers to the original question looked like? Let's break it down:
• We recorded a total of 18 answers.
• 3 of those answers ranged from neutral to positive.
• The other 15 answers were negative.
• 3 of those answers ranged from neutral to positive.
• The other 15 answers were negative.
I'll be honest, I'd have difficulty thinking of 15 objections to a price rise on my own. I'd have difficulty even thinking of five on my own. But 15? Really? Here are some of the objections the trainers around me came up with. Maybe you’ll resonate with some of these:
• "You're greedy."
• "You just want my money."
• "I'm offended."
• "I feel let down."
• "It's not worth it."
• "What's in it for me?"
• "I quit."
Something to be really clear about is that these objections do not reflect what the majority of your clients will think about you or your business if you increase your prices. These objections only reflect your own fears.• "You just want my money."
• "I'm offended."
• "I feel let down."
• "It's not worth it."
• "What's in it for me?"
• "I quit."
Increasing Your Price is a Good Thing
There were only three responses offered that reflected a brighter picture:
• "That's reasonable."
• "That's fair."
• "It's about time!"
• "That's fair."
• "It's about time!"
(You get exactly three guesses to figure out which response was mine.)
The truth is, 90% of the time, these last three responses are much closer to what you'll actually get. This is especially true if you use some tact while announcing the increase of your prices. Following is a simple strategy to handle this effectively:
• Set a date 4-6 weeks in advance.
• Write a personal letter to each of your current clients.
• In this letter, tell each client that, starting at the set date, all new members will be charged your new fee.
• Go on to say that because of their loyalty and commitment to training, your current clients' fee will only increase to an amount that's somewhere between their current fee and the new fee.
Here’s An Example
By Doing It This Way, What Do You Achieve?
You:
• Show personal respect and honour to your client.
• Explain the increase in your prices without being ****y about it.
• Give the client the opportunity to organise any changes they need to make (for example, the extra money probably isn't a problem for them, but if it is, they may wish to revert to shorter sessions, or go from 3x per week to 2x per week).
• Give the client forewarning instead of hitting them with an unexpected price hike.
• Make the client feel special while still increasing their rate.
• Explain the increase in your prices without being ****y about it.
• Give the client the opportunity to organise any changes they need to make (for example, the extra money probably isn't a problem for them, but if it is, they may wish to revert to shorter sessions, or go from 3x per week to 2x per week).
• Give the client forewarning instead of hitting them with an unexpected price hike.
• Make the client feel special while still increasing their rate.
If you handle it this way, the majority of your clients will respond well. However, a small number of clients may still raise some of the objections listed above, or some other creative objections. If you know that your new asking price is right (given the equation used earlier), oftentimes, you can handle objections simply with confident diplomacy. But if someone does decide to stop training with you because of your new price...so what? I mean it.
So What If A Client Quits Because You Raised Your Price?
You raised your price because of increased experience and demand for service, didn't you? That means that there's someone in line waiting to pay the higher rate. But even if there isn't someone keen to take an old client’s place...still: so what? If you increase your price by 10%, and 10% of your clients drop out, you're now getting paid just as much for only 90% of the work. So even if you lose a client or two, you’re still in a better situation.
What You Can Do Right Now
The application here is to realise that there are always three factors driving an increase in the price of your time: experience, demand for service and inflation. Do not underestimate these factors. Expect the value of your services to increase, and be proactive in making that happen. Then charge accordingly. Look at it this way: if you don’t increase your rates to meet the growing value that you provide, then you are demeaning your business.
Your job today is to take some time to think about how long you’ve been training people and how you’ve changed as a trainer over the years. If there’s something you were teaching a year ago that you kick yourself for now, good! It means you’ve learned something and therefore are a better trainer now. And that means it’s time to plan how you’re going to charge more.
<><><>
Author: Ryan Ferguson
Alias: Goldfish