Drawing from her own inspiring success story, founder of Studio Grow Lise Kuecker shares the most important aspects of pricing in this week’s episode. Learn how to not only be profitable, but to create pricing that supports your lifestyle and work-life balance. Whether you’re just starting out as personal trainer/studio owner or are more experienced and want to reevaluate your current prices and packages, this is the episode for you!
What You'll Learn from this Episode:
- How to structure your pricing and packages
- Understand the importance of recurring revenue
- How to ensure your pricing evolves alongside your studio
Here's the Complete List of Tips:
Lise Kuecker talks about her success story of taking that failing studio and turning it into a 7 figure, multi-state, empire; one that leverages systems to allow for a life of freedom and balance. Fun fact: at one point she was running a multi-million dollar business, and working 5 hours a week.
Core Strategies for Pricing (12:24)
- The first major priority to keep in mind when establishing packaging and pricing is that there has to be some kind of recurring revenue option. When your clients commit long-term it gives you more financial stability and foresight. Psychologically it also increases accountability and helps your clients to reach their goals, which in turn increases satisfaction with your product.
- “Anchor pricing” (16:45): You want to make sure that your most profitable option is the second priced option; meaning that your highest priced item should be the least incentivizing one (e.g. drop-in rate) and the second priced option should be the most incentivizing one (e.g. longer-term contract).
- Right incentives (18:36): Make sure there’s enough difference in pricing to incentivize people to make a long term commitment.
- Expenses (19:06) Figure out how to pay your staff and what the base operating expenses are.
How to Position Yourself in the Market (21:55)
People will pay for the results they are going to get. Don’t be shy of charging what your services are worth. In order to determine the value of your services and your position in the market, first you need to acknowledge who you are and what you want. Do your research and get people’s opinion and input on what they want. Consistently test the market and reevaluate as you go along. You don’t have to offer everything at once but can build up your services.
Your Business and Prices Are Always Evolving (32:18)
As your experience and services grow (but also to keep up with inflation) you will need to adapt and increase pricing alongside your business. One strategy to do that is to introduce small pricing upshifts every year that won’t make a big difference to your clients.
The one consistency among failed pricing changes is bad communication: Mass communication causes mass chaos, therefore make it as personal as possible! You don’t have to change pricing for every existing client right away. Take a personal approach; you can take your clients on a reset and help them connect with their WHY again.
Indicators that Your Pricing/Packaging Should Change (40:39)
If you’re not happy and/or burnt out, you definitely need to make a change. Ideally, you should continually survey your clients and take on their feedback (not so much on pricing but on your programming and services). When you hit 80% capacity on your services think about how you can expand outward and evolve. As you grow you might want to think about licensing and franchising or teacher trainings etc. At the same time, you have to be equally willing to cut things that no longer profit you.
Tips Around Pricing (50:45)
Be aware of how often people use your studio when establishing your packages and prices.Provide a downgrade option for people who want to cancel. And very important: Offer a significant reduction for someone who is willing to commit!
Action Tip: Start at your least expensive, longest-term option and work your way backwards.That’s the best way to get the prices you need.
Tips for New Studio Owners (54:14)
- Be aware of the market around you and what other studios around you are charging.
- Start with limited options and add on to that inspired by your clients feedback.
- Build a pro forma: a living spreadsheet detailing out all the expenses that you have as well as the income over a period of time to determine profits.
Other References in This Episode:
The Client Cure
Spin Towel & use promo code "BARRY" or for studio owners, mention FCM!