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In fact, the average fitness professional with an advanced certification and Masters Degree is currently earning between 20.42-28.23 per hour.*
*Pulled from the American Council on Exercise, National Registry of Personal Trainers, and PayScale.com.
That’s pretty rough.
I’ve never worked in the fast food industry, but I wouldn’t be surprised to learn a shift manager at McDonalds takes home more.
However, I personally know a TON of fitness professionals who earn as much as 150-250+ per session… or run semi-private or group training sessions that gross as much as 350+ per session.
Why is there such a tremendous gap in earnings and pricing models within our industry?
Well that’s a long and complicated story.
But a MUCH more valuable question is… what must occur in order for YOU move up the hourly rate (and personal income) ladder?
We’re going to explore the answers to those question in this article, but first we’ll need to start with an understanding of…
How did you get here?
What are you currently charging for your services right now?
How did you determine those rates?
For many fitness professionals, they’ve based their current pricing model on:
- What they’ve seen their competition charging
- What they’ve always charged (many still have clients on billing plans from 3, 5, event 10 years ago!)
- Or they’ve got no idea how they came up with their current rates
Neither of those are good strategies to base your business (and personal income) around.
Especially when you’re just scraping by each month.
And what’s even worse, is that in failed attempts to market themselves, or position their business in an increasingly competitive environment, MANY coaches resort to the terrible practice of “discounting” their rates in a race to the bottom of the market.
“Oh, the other guys are now charging 120/month for unlimited classes? Let’s charge 105/month!”
Let me be clear… if you go there, you are committing business (and financial) suicide.
There is no profit at the bottom.
And unfortunately, this is where some people live their lives… eeking by each month, living paycheck to paycheck, with NO savings account, large amounts of credit card (and other) debt, always avoiding facing and dealing with financial challenges going on in their business and personal life.
I hope this article can serve as a STRONG WARNING and wake up call to all those amazing coaches in our industry currently stuck in this plight.
YOU (AND YOUR FAMILY) DESERVE BETTER!
But life will not hand you anything.
And nobody can make the necessary changes for you.
Only YOU can take personal responsibility for your success.
Now there are amazing coaches, mentors, and leaders out there who will show you the way… but YOU must be willing to take the first step.
YOU must be willing to take a stand and say “no more!”
YOU must be ready to truly value yourself, your services, AND best serve your clients.
And YOU must be willing to make some changes, which will require you to let go of your current habits, belief system, and past dysfunctional relationships… including the one you may very likely have with yourself as a boss right now!
If you’re ready and willing to engage each of these frightening tasks (some folks are simply too fearful to move forward just yet), then great rewards await you.
Take a moment to think about really think about this.
How quickly would the economics of your business change if you increase your rates by 10%, 25%, 50%… or more?
What if you could dramatically restructure your business and DOUBLE your rates over the next few months?
What would be different in your life with MORE income from working LESS?
With PROFITABILITY in your business EVERYTHING works.
You have money left over to repay debts.
You have money to build savings (for a rainy day and to not feel the pain of slight “bumps in the road” from month to month).
And you have money to hire and build a team.
You may not be at the point where you’ve given this much consideration yet. Perhaps you’re satisfied with simply paying your bills, being able to buy some things you like, and so on.
But I assure you, as you grow older, you will value your time much higher than you do now.
And by extra time, I don’t mean a fantasyland where you sit on a beach in a hammock holding a drink in a coconut.
I mean being home by 5pm for dinner with your family each night.
Being able to take your son to soccer or football practice at 3pm, three times per week.
Or being there for your daughters dance recital, instead of being stuck in the gym helping someone else workout and counting their squat repetitions.
Helping others is a great and noble cause, but at some point you have greater responsibility to yourself and your family that depend on you than you do to others.
And when you decide you’re ready and, well then it’s time to step up and do something about it!
But in order to get there, you can’t just “get by.” You got to have profits.
PROFIT really is the end-all-be-all word in business.
With it you can accomplish just about anything and are sustainable.
Without it, you’re struggling and the walls are constantly closing in on you until you run out of oxygen and can’t breathe anymore.
How To Set Prices
All right, so we’re back to pricing.
Pricing is the first step in getting PROFITABLE and having FREEDOM.
If you DON’T get your pricing right, it’s impossible to have much of either (profits and freedom).
So, now that we’ve set the stage … let’s talk about some mechanics.
HOW should you set your prices?
Well, the #1 factor MUST be profitability.
At NPE we talk to people all the time who have big dreams of growing a significant business, having multiple locations, franchising their concept, and more.
You must understand that until you get really profitable in just YOUR little business, you can’t do anything big time.
I know, I keep harping back on this “profits” thing.
It’s just that I could go on for 4 hours about this point… and some people will still miss it.
So, I feel the need to keep challenging you on it.
Please take this to heart, ok?
Now… back to pricing.
So if profit is top priority in terms of setting your pricing, how do we use that in order to determine your rates?
In all the thousands of models we’ve seen over the years in the fitness industry, I’ll tell you that unless gross profit is between 60%-74%… it’s nearly impossible to make the economics of a small facility work.
No matter how much you love your staff, how great you think they are, how much you want to hire amazing talent to join your team… if you can’t get your business model really profitable… it will fail.
Generally we have to go back and forth with clients on various options and models to pay their staff.
Because in most cases, everyone is waaaay overpaying their staff based on what they would have liked to earn as an employee… without the knowledge and understanding of all the other costs and risks that go into running and growing a business.
Anyway, we go back and forth on this until it’s solid.
And this allows us then to determine your GROSS PROFIT.
GROSS PROFIT is the amount of money you have left over after you pay out labor costs.
And from your GROSS PROFIT… you must then cover other expenses like your rent, overhead, utilities, non-training salaries (including your own), etc.
Next most important number you want to watch is NET PROFIT %. For example, if you determine you need 5,000 clients to ever reach your net profit goals, then we definitely have some tweaking to do! It’s amazing when you’ve got this right because then you have:
- 100% clarity on the numbers in your business model
- Knowledge of exactly the number of clients you need, in order to deliver the NET PROFIT result you want, given the unique variables in your business model
When are you armed with that knowledge… we’re making great progress toward success and moving you in the right direction with a SOLID foundation to build upon!
Packaging Your Services For Success
After you’ve got pricing right, next up is packaging.
Packaging I like to think of as the plate of food we put on the table in front of our customers at a restaurant.
That meal better:
- look amazing
- get them excited
- serve the goal of both solving their problems and achieving their goals
Without that, you haven’t done your job.
Could you imagine sitting down at a restaurant and the waiter brings out raw ingredients, puts them on the table, and says “OK, dinner is served!”
You’d be like “WHAT!? I didn’t come here for that!
I could’ve just walked around the aisles of the grocery store myself for THAT!
When you go out to a restaurant for dinner you want to be served a great meal, that satisfies your hunger, and gives you a great experience in dining out for the evening.
So many miss this mark in presenting their services for sale (and consumption) in an easy and enticing manner to their prospective buyer.
They talk about “sessions” or “lengths of time of workouts” and all those kinds of things.
Nobody REALLY wants anything of the sort.
They want RESULTS!
They want SOLUTIONS!
So you better start presenting your services in a way that your prospect clearly understands it to meet both their needs AND desires.
Here is the “control” that I first introduced back in April 2010 (that has yet to be beat!).
It’s been tested and proven through literally MILLIONS of transactions around the world.
Follow it for success.
I’ll explain how (and why) this works:
- Program Names–You can name your programs whatever you like. And cool names that match your target market demographic are great. For example, in selling to athletes we’ve seen program names like “JV team, Varsity Squad, and PRO leagues” work well. Think about it… if you’re into sports, who wants to join the JV team? You want to be on the PRO level! Call your programs whatever you wish, but essentially the top program should frame the characteristics (and naming convention) that resonates with your best clients. Your goal is to attract more people just like them.
- Commitment- This is a big (and important) word that has been tested a LOT. And it appropriately frames what we’re really asking our clients to do, which is to COMMIT to the length of time required for them to invest in solving their problem or achieving their goal.
- Frequency of workouts- This is based on your recommendations for your client, and can include things like their budget or travel schedule that may impact your recommendation. I should also note this is the frequency options recommended for presenting PRIVATE or SEMI-PRIVATE training services. In group training sales, we recommend you adjust this to either have just A) 2x or 4x week options, B) 2x or unlimited, or C) 3x, 4x, and 5x week options.
- Monthly investment- is the best way to present price because it A) eliminates sticker shock and B) is how our brains are trained to make quick assessments on if we can afford something and make a quick buying decision or not. Everyone kind of inherently knows how much they make a month, what they spend, and what’s left over in disposable income to invest in other things. It’s also how our brains are trained to think of price, and how we have been trained to purchase the majority of good and services in the world today like our house or mortgage payment, our car payment, mobile phone bill, utilities, etc.
All right, we’ve covered the mechanics of pricing and packaging.
But we still have to address WHY you can charge more and HOW to raise your prices.
For you to understand that, and gain confidence in raising your rates, it’s very important that you start to think about and understand what people are REALLY paying for.
And here’s an important point to set up our next section: They are NOT paying for you or your time.
What Do People REALLY Pay For?
Ok, so if clients are not paying for you or your time… what do you think they’re really paying for?
Your brilliant marketing mastery?
Nope. They are paying for VALUE.
Hmmm. But how can you quantify and define VALUE in a service business?
We use this equation to break it down:
VALUE = CE + R + R
In this equation VALUE is defined by the Client Experience, Relationship, and Results you deliver.
When you are delivering MORE value than people expect for the money you are asking them to invest in working with you, well, you then have a great VALUE PROPOSITION.
And THAT is everything in sales.
We teach our clients to “focus on delivering value and price becomes irrelevant.”
Now, this could turn into an entirely new blog post if I depart too much here, but I’ll just say that you should ALWAYS be focusing on improving each one of these variables in order to consistently be delivering great value to your clients.
When you do this… you will leave any competitor out there in the dust because you are consistently serving people and delivering so much value that they LOVE doing business with you and couldn’t possibly imagine going anywhere else!
Get Clear on Your WHY
If you thought this would be an article on how you could simply make more money quickly and easily you were wrong.
In fact, there is nothing easy about it!
Making changes in your pricing, learning how to better package your service offerings, and raising the rates with your current clients will force you to examine, reflect on, and work through some tough stuff.
WHY on earth would you want to go through all that work?
Well, if you’re an entrepreneur, you’re crazy enough to LOVE challenges.
You LOVE personal growth … even when it requires you to go through some (at times intensive) pain and suffering.
And you LOVE the time and opportunities it creates in both your life and the lives of others who end up working for you, being your client, or a member of your extended community.
ALL of those things are had only by a few.
But it’s those few that truly lead and change the world around them.
And that’s what it’s all about!
You don’t have to struggle to make a living doing the work you love. To serve others well, you have to be able to support yourself.
The first step in achieving this it having a proven system to:
- Find more clients
- Charge more per hour
- Inspire clients to make great commitments
- Make money doing the work you love