If you’re in the fitness industry, chances are you’ve offered a free introductory promotion to new members.
Free class, free week, free month – you name it!
And while this may be a popular tool to get people in the door, is it really the best approach to growing your business?
At The Fitness CPA, we think not.
In fact, we know not!
In this blog, we’re going to address the free membership offer and convince you to ditch it once and for all.
Let’s dive in.
Why It’s Time to Ditch the Free Introductory Offer
Let’s talk about why offering a free membership is not the best strategy for your fitness business.
Sure, it may bring in a lot of people who want to try your gym or studio, but how many of the bargain hunters actually stick around and become paying members?
The answer? Not many.
That’s why we suggest associating a small dollar value with your introductory offer, such as $30 or $45. In another blog post, we’ll write about why we also advise extending the length of the trial but let’s save that for another time .
Getting back to the dollars and sense: by assigning a dollar value to your intro offer, you will weed out the people who are just looking for a free ride and never intended to buy a membership anyway.
And here’s the thing: if someone isn’t willing to give you $30 or $45 for a trial, what makes you think they would ever pay $100 or $150 for a private training session, semi-private classes, or unlimited class-based instruction as an actual member?
The likelihood is fairly low.
By weeding out these non-paying individuals (okay, I’ll say it, “stingy individuals”), you can focus your team’s sales and training efforts on people who are more likely to convert.
And let’s face it, the last thing you want is to constantly have people come in and out of your gym without any intention of joining.
Moreover, it can be quite draining for your staff.
It takes a lot of effort and energy to coach a class or greet someone at the front door, and if you’re doing this for people who will never pay for your services, it can be demotivating for your team.
By associating a small dollar value with your introductory offer, you can gauge someone’s actual interest in your product. This way, you can concentrate your resources and assets on people who may actually become paying members and help grow your fitness business.
It’s the best way to ensure that you’re not wasting your staff’s time and energy on people who are not serious about joining your gym.
Free introductory offers also take away from your regular paying members’ experience. How do you ask? You already know that non-paying members crowd facilities and classes and reduce the focus that paying members receive from trainers and staff, but let’s be honest – it’s often those taking advantage of a free trial who don’t wipe equipment, neglect putting their weights back, make a mess of the locker room, and are on their phones when they should be focusing on their workout. Free introductory offers attract a type of visitor that is a total distraction from the culture and environment you are striving to build for your loyal members.
Now that we have you convinced of the why, let’s cover the how-to.
How Much Should You Charge for a Trial Period?
Well, we have a couple of rules of thumb that should help you find the sweet spot.
First of all, we recommend a one-month introductory offer, but have seen offers as short as a week and as long as five weeks or even 45 days. All of these are really good lengths of time and the key is that they provide the potential member the opportunity for more than one visit. Ultimately, it really depends on the type of facility you run, the services you offer, and your target audience. We’ll cover this more in a separate blog post.
When it comes to deciding on an actual dollar figure, there are a couple simple pricing methods we recommend.
One method is to try an introductory offer that costs roughly 1.5 to 2 times your daily drop in rate.
For example, if your daily drop in rate is $25, that means you’re probably going to charge about $40-$50 for your introductory offer. If your drop in rate is $40, your introductory offer would be about $60-$80.
The key is that it’s just slightly higher than your one day drop in rate so that the marginally increased cost is of great value to your new visitor. They’ll be encouraged to take advantage of the offer they’ve paid for by returning for multiple visits and ultimately finding themselves hooked on your services, the community, and the brand that you’ve confidently built to win them over.
The other method we suggest for pricing your introductory offer is to use one third of your monthly pricing.
So if your monthly pricing is $90, that means your introductory offer would be $30. If your monthly pricing is $150, that means you would set your introductory offer around $50.
Again, the pricing is set so that the member feels incentivized to return. Multiple visits also provide a buffer against the possibility that a new member has an off visit. Whether they don’t vibe with an instructor, have an off day themselves, or even if they have a great experience – we want trial members to have multiple touch points with your brand so they can see what all the hype is about before they are asked to sign up for a recurring membership.
What is the Value of Free?
By charging a small introductory price, you’re immediately monetizing what would otherwise be a free giveaway. The truth of the matter is, free doesn’t really have any value for the consumer or the business owner. Whether it is a free hotel breakfast, the free toy in the kids meal, or a free couch on the sidewalk, free doesn’t exactly inspire value, and it certainly doesn’t inspire prospects to make a purchase. If you’re anything like me, more often than not, ‘free’ leaves me with buyer’s remorse.
By charging a reasonable price for your introductory offer, you’re showing your potential customers that you have something valuable to offer. The simple act of pricing your introductory offer assigns value to the services your brand offers.
One more thought on converting trial offers to paying memberships — It’s much easier to convince a prospect to go from a $40 trial to a $125 service than to go from $0 to $125. And that’s because whether the prospective member thinks about it or not, by explicitly exchanging value for the introductory offer, the lead has already implicitly agreed that your brand has value worth paying for.
In fact, since we began working with fitness businesses in 2012, we’ve seen time and time again that monetized introductory offers convert at a significantly higher rate than free introductory offers.
What Happened When One Business Owner Moved to Paid Intro Offers?
As experienced fitness accountants, we’re not just telling you this information for you to go trial and error.
We have the experience to tell you that it works!
We’ve been tracking the numbers across our fitness studios and have found that consumers are just as willing to pay a low introductory price as they are to try something for free.
One studio in particular had about 150 people taking advantage of their free intro offer every month.
That’s a lot of people not paying a dime! And to make matters worse, the studio wasn’t even doing a good job of showing off their value proposition.
When we had that studio convert to a $40 intro month, they improved their conversion rates. Yes, there were times that less leads were coming through the door for the initial visit (because it was no longer free), however assigning a value to the intro offer mostly reduced the number of bad leads. This in turn reduced the amount of time and labor invested chasing bad leads that had no intention of converting. Best of all, they actually increased their number of converting members per month. It was a triple win.
And get this – they made an extra $36,000 in revenue per year just from monetizing the intro offer alone!
How do we know this? Because we painstakingly track each revenue stream for our fitness clients and help owners use that data to make more profitable decisions.
We’ve seen similar results across the board with other fitness businesses.
By changing from a free intro offer to a monetized one, our clients are making anywhere from $36,000 to $72,000 in extra revenue per year.
How would you feel about having an extra $72,000 of revenue added to your business’s top line rather than giving it away for free?
What’s the Next Step For Your Fitness Business?
We encourage you to begin monetizing your introductory offer sooner rather than later by following one of our recommended pricing strategies.
It’s important to remember that every fitness market is unique and what works for one business may not work for another. So, it’s best not to simply copy your competitors when it comes to pricing your introductory offer.
To make sure you stand out and offer the best value to your potential customers, consult with a fitness advisor. They can help you determine the best pricing strategy that aligns with your business goals and target audience.
If you don’t have a fitness advisor that you’re happy with, you can reach out to us anytime by visiting our Get in Touch page.
Remember, you want your offer to be irresistible and make people say, “Wow, that’s a great deal! I need to sign up now!”
You also want your offer to show that your business offers real value and a top-notch experience that people will love being a part of.
So, don’t be afraid to invest in your business and take the time to craft an introductory offer that sets the bar high and attracts the right customers to your fitness community.
Until next time!
Fitness is such a big part of who I am. Maintaining a healthy lifestyle, eating well (mostly paleo), hiking, backpacking, mountaineering, practicing yoga and Crossfit are all important cornerstones of life. But I love ice cream and cookies too much to say no!
I love helping owners make sense of their business and finding ways to grow it. It’s an honor to help you see situations, scenarios and opportunities from all sides so you can make informed decisions.
- Should You Buy a Fitness Franchise Now? - September 10, 2024
- Best Converting Intro Offer For Fitness Businesses - August 25, 2024
- It’s Time to Ditch Your Free Introductory Offer - July 30, 2024
