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The 99¢ Pricing Trick: Add $10K/Year to Your Gym · Gym Business Coach Podcast

• 0:00
  [SPEAKER_00]: All right, welcome back to the gym business coach podcast.
• 0:03
  [SPEAKER_00]: I'm your host Timothy Lyons joined in studio by Randy.
• 0:06
  [SPEAKER_01]: So what's up, Mike Randall Randall Randall what's your middle what's your middle name William William.
• 0:12
  [SPEAKER_01]: I know it's also colonial.
• 0:22
  [SPEAKER_00]: I I Guys big week for us coming up.
• 0:27
  [SPEAKER_00]: We are leaving tomorrow morning.
• 0:29
  [SPEAKER_00]: We are out of town.
• 0:30
  [SPEAKER_00]: We're going to the iron circle experience with Jeff Hoffman and Joey Coleman.
• 0:34
  [SPEAKER_00]: So we're going to try to pin those two guys down for an episode while we're there
• 0:38
  [SPEAKER_00]: No promises, but uh, would love to have either one of those guys on the show, uh, Joey Coleman.
• 0:44
  [SPEAKER_00]: You may have heard of him from never lose a customer again.
• 0:47
  [SPEAKER_00]: And he's also got a second book called It Never Lose an Employee Again.
• 0:50
  [SPEAKER_00]: And it's about the eight stages of the boy journey, just like the customer journey.
• 0:55
  [SPEAKER_00]: We had him out at our iron circle experience in Maryland, uh, was it Maryland, outer banks, outer banks, North Carolina, uh,
• 1:05
  [SPEAKER_00]: Maryland.
• 1:06
  [SPEAKER_00]: But however, it was a great event.
• 1:09
  [SPEAKER_00]: We were able to kind of map out the journey.
• 1:11
  [SPEAKER_00]: Very, very cool.
• 1:12
  [SPEAKER_00]: And then our second guest speaker is Jeff Hoffman, the founder of priceline.com, billionaire self-made guy has a roll of decks that would rival Donald Trump and any celebrity knows everybody.
• 1:26
  [SPEAKER_00]: Um, rate story teller.
• 1:28
  [SPEAKER_00]: I'm suit.
• 1:29
  [SPEAKER_00]: I just talked to me yesterday on the phone.
• 1:31
  [SPEAKER_00]: Um, just a just a old like a nice person.
• 1:35
  [SPEAKER_00]: Um, great guy.
• 1:36
  [SPEAKER_00]: That like a kind nice person.
• 1:38
  [SPEAKER_00]: So sighted have him there.
• 1:40
  [SPEAKER_00]: These both of these gentlemen were ranked number one and two.
• 1:44
  [SPEAKER_00]: I won't tell you the order, but run number number one and two best speakers for an encore.
• 1:50
  [SPEAKER_00]: So we brought them back both back.
• 1:51
  [SPEAKER_00]: And they are super pumped.
• 1:53
  [SPEAKER_00]: So we'll have dinner and stuff of those guys in Orlando.
• 1:56
  [SPEAKER_00]: So that's that's this week.
• 1:58
  [SPEAKER_00]: So stay tuned for that.
• 1:59
  [SPEAKER_00]: I think Brian's going to do a little vlog.
• 2:01
  [SPEAKER_00]: Maybe on our YouTube channels at right.
• 2:04
  [SPEAKER_00]: Awesome.
• 2:05
  [SPEAKER_00]: So stay tuned for the for the festivities.
• 2:09
  [SPEAKER_00]: I guess.
• 2:09
  [SPEAKER_01]: Yeah.
• 2:10
  [SPEAKER_01]: And if you want, we did do an episode with Joey Coleman in Maryland.
• 2:14
  [SPEAKER_01]: Mark said me in outer banks.
• 2:16
  [SPEAKER_01]: We did.
• 2:17
  [SPEAKER_01]: So yeah, if you search our YouTube, we could probably find that if you just search Joey Coleman on our channel, you'll find yep, so with him, I'm never losing a customer again.
• 2:26
  [SPEAKER_00]: Yeah, in one of the biggest takeaways from that, that little just talk was, you know, every Jim's got a marketing budget set aside, but not a retention budget.
• 2:35
  [SPEAKER_00]: Yeah.
• 2:36
  [SPEAKER_00]: And if you if you paid as much attention to your retention, as you did marketing, your business would be in a different place.
• 2:42
  [SPEAKER_00]: And I can't argue that, you know, you have some of handful of clients and the long
• 2:51
  [SPEAKER_00]: triple quadruple 10x times the amount of people you still have in your business today.
• 2:57
  [SPEAKER_00]: Just imagine if you kept a third of them, 10% of them.
• 3:01
  [SPEAKER_01]: And Joe did a good job.
• 3:02
  [SPEAKER_01]: And he booked on some of the math.
• 3:03
  [SPEAKER_01]: You know, he had some data around a lot of that and stuff like that.
• 3:08
  [SPEAKER_01]: And it was, it was really eye-opening.
• 3:09
  [SPEAKER_01]: I mean, he,
• 3:10
  [SPEAKER_01]: you imagine being able to cut your marketing budget in a third or half and just be able to retain those clients for a few months longer hell, you know, a year longer, what it would do for your business.
• 3:24
  [SPEAKER_01]: At scale, the numbers are astronomical.
• 3:25
  [SPEAKER_01]: Big time.
• 3:26
  [SPEAKER_00]: So let's talk about how to give yourself a quick raise.
• 3:29
  [SPEAKER_00]: This is the 99 cent phenomenon.
• 3:31
  [SPEAKER_00]: So a while back, Zach was kind of like looking at our numbers.
• 3:36
  [SPEAKER_00]: And you know, for the longest time, I mean, I guess, call it three years now.
• 3:39
  [SPEAKER_00]: We were at 99 bucks.
• 3:40
  [SPEAKER_00]: 99 bucks.
• 3:41
  [SPEAKER_00]: Yeah, 99 bucks a week.
• 3:43
  [SPEAKER_00]: That's 428, 67 a month.
• 3:45
  [SPEAKER_00]: And then we had a 129 a week for a different membership.
• 3:49
  [SPEAKER_00]: Long story short is like, what if we added 99 cents to that?
• 3:51
  [SPEAKER_00]: What would that do to our gross revenue?
• 3:55
  [SPEAKER_00]: And essentially, they're net profit, and when you start looking at the math, it's like, man, for just 99 cents more a week, you multiply that by 52 weeks a year that's just under 52 dollars, you have 200 members.
• 4:08
  [SPEAKER_00]: Wow, that's over $10,000.
• 4:10
  [SPEAKER_00]: $10,000, more a year.
• 4:14
  [SPEAKER_00]: just by adding 99 cents to the weekly billing cycle.
• 4:20
  [SPEAKER_00]: And, you know, for anybody who weekly this makes sense, this does make so much sense for somebody that's doing a monthly, because you're only gonna catch 12 payments versus 52.
• 4:31
  [SPEAKER_00]: And, you know, nobody cares about 99 cents.
• 4:34
  [SPEAKER_00]: You see it, this is a pricing strategy.
• 4:37
  [SPEAKER_00]: It's old this time, you know, 1999, right, or $21.99 or $199.99.
• 4:45
  [SPEAKER_00]: You see it in every retail store on the planet, grocery store, everything in the 99 cents, because why, well, it's one cent less.
• 4:54
  [SPEAKER_00]: You just, you equate that 99, you just disregard it.
• 4:57
  [SPEAKER_00]: Yeah.
• 4:58
  [SPEAKER_00]: You disregard the 99 cents, right?
• 5:00
  [SPEAKER_00]: And so, we did a price increase, a short one, you know, about a year, two years ago, maybe at this point where we added nine, nine cents, and you know, and we just basically increased our revenue by, you know, $10,000 a year.
• 5:14
  [SPEAKER_00]: What can you do with that extra $10,000?
• 5:16
  [SPEAKER_00]: Can you put it in a marketing?
• 5:17
  [SPEAKER_00]: Can you put it back into your staff?
• 5:20
  [SPEAKER_00]: Can you put it back into your facility, repaint the
• 5:27
  [SPEAKER_00]: Everybody like it's just like has it tint to raise rates and I get it.
• 5:32
  [SPEAKER_00]: We're in the middle of another right rate raise right now some of our clients are going to rate raises and I get it because for some reason the fitness industry is not allowed to raise rates.
• 5:45
  [SPEAKER_00]: We are a business, just like every other business out there, that is allowed to raise rates, IE, restaurants, grocery stores, and it's just accepted, right?
• 5:54
  [SPEAKER_00]: It's just, oh, the food costs are going up, right?
• 5:56
  [SPEAKER_00]: You know, the cost of gas is up, like it's just accepted, where the fitness industry, it's always like this, I don't know, we get a lot of flag for it.
• 6:07
  [SPEAKER_00]: from our clients.
• 6:08
  [SPEAKER_01]: Well, I think there's there's flag, and I think there's this fear of the flag, fear of the flag.
• 6:12
  [SPEAKER_01]: You know what I mean?
• 6:13
  [SPEAKER_01]: And so as an owner, some of this goes back to the pandemic and stuff.
• 6:18
  [SPEAKER_01]: I mean, that was a big one, right?
• 6:20
  [SPEAKER_01]: We talked back then about if you're not raising rates to match your expenses that went up.
• 6:24
  [SPEAKER_00]: Sure, an inflation.
• 6:25
  [SPEAKER_00]: Yeah.
• 6:26
  [SPEAKER_01]: You know, I mean, everything vendors, everything that was, you know, that you're
• 6:30
  [SPEAKER_01]: Any service that you have that you're paying to to you know, just facilitate and you know at the gym all of them went up about 30% and if you as the owner of the gym didn't Raise your rates at least that percentage.
• 6:44
  [SPEAKER_01]: You took the hit
• 6:45
  [SPEAKER_01]: Um, it made a lot of sense when it was kind of, uh, you had to do it to fill the gap, you know, your cost of doing business went up.
• 6:53
  [SPEAKER_01]: So, of course, you want to make sure that you're recouping that and the end consumer, unfortunately, has to carry that tab.
• 7:00
  [SPEAKER_01]: But it's not always just about getting back on top of it, you know what I mean?
• 7:04
  [SPEAKER_01]: Uh,
• 7:06
  [SPEAKER_01]: You continue to provide a better result if you're continually educating the team.
• 7:13
  [SPEAKER_01]: If you're progressing the business forward in ways and carrying that on to your clients, you should be able to raise it.
• 7:22
  [SPEAKER_01]: You shouldn't be afraid of it.
• 7:23
  [SPEAKER_01]: We shouldn't have to be afraid of it.
• 7:25
  [SPEAKER_00]: Yeah.
• 7:26
  [SPEAKER_00]: Well, you're, most of the people that don't raise rates, they're afraid of Mrs. Johnson.
• 7:31
  [SPEAKER_00]: It's usually 1, 2, 5, 10 clients that you're afraid are going to raise a big stink in the gym, right?
• 7:38
  [SPEAKER_00]: You know, and cause ruckus.
• 7:40
  [SPEAKER_00]: 99% of the rest of the members don't care.
• 7:42
  [SPEAKER_00]: They expect it.
• 7:43
  [SPEAKER_00]: That's acceptable to them.
• 7:45
  [SPEAKER_00]: They understand every other bill's gone up.
• 7:48
  [SPEAKER_00]: Why not this one?
• 7:50
  [SPEAKER_00]: So, you know, are you going to be held hostage by a handful of clients and usually you are?
• 7:56
  [SPEAKER_00]: Um, I hear this a lot of times.
• 7:58
  [SPEAKER_00]: Well, we're just going to raise rates on new members.
• 8:00
  [SPEAKER_00]: Yep.
• 8:01
  [SPEAKER_00]: Okay.
• 8:01
  [SPEAKER_00]: Well, why?
• 8:03
  [SPEAKER_00]: Because you're, again, it goes about your freight of Mrs. Johnson and her, her band of client or friends that are good.
• 8:10
  [SPEAKER_00]: They're good.
• 8:10
  [SPEAKER_00]: And you're going to lose people.
• 8:12
  [SPEAKER_00]: You just sometimes happens, right?
• 8:13
  [SPEAKER_00]: Like, you can't be afraid of that at the end of the day.
• 8:16
  [SPEAKER_00]: Guys, you, especially if somebody
• 8:26
  [SPEAKER_00]: answer this question.
• 8:27
  [SPEAKER_00]: Are you better today than you were seven years ago?
• 8:30
  [SPEAKER_01]: Yep.
• 8:30
  [SPEAKER_00]: Are you more valuable as a service provider today than you were seven years ago?
• 8:36
  [SPEAKER_00]: Is the value of that dollar the same as it were seven years ago?
• 8:41
  [SPEAKER_00]: Of course not, right?
• 8:43
  [SPEAKER_00]: And of course, you're better service provider.
• 8:45
  [SPEAKER_00]: Then all logic says, well, then we actually should be charging more because it's a better product, the dollar's worth less.
• 8:54
  [SPEAKER_00]: Every other thing in this business is going up.
• 8:56
  [SPEAKER_00]: I want to pay my coaches more.
• 8:57
  [SPEAKER_00]: In order to pay them more, we need more coming in.
• 9:01
  [SPEAKER_00]: So therefore, let's raise the rate.
• 9:03
  [SPEAKER_00]: So it's acceptable.
• 9:05
  [SPEAKER_00]: It's not greedy.
• 9:07
  [SPEAKER_00]: You deserve to make a living.
• 9:09
  [SPEAKER_00]: You deserve to pay your coaches more.
• 9:11
  [SPEAKER_00]: You deserve to make a profit.
• 9:13
  [SPEAKER_00]: So guys, the 99 cent phenomenon, that's just an easy, like, that'll be fine.
• 9:19
  [SPEAKER_00]: You can say, guys, we raise the 99 cent.
• 9:21
  [SPEAKER_00]: You could do that.
• 9:23
  [SPEAKER_00]: Instead of doing that, like, just start off with the 99 cents in your price point and just like, that's the way you price.
• 9:29
  [SPEAKER_00]: But the other side of that is just, raise rates in general to what the current market value is.
• 9:40
  [SPEAKER_01]: One small piece of advice, I would do it like a Q2, Q3, kind of outside your busy, you know, busiest seasons for most gyms, right, our winter months, January, obviously is a big January February is a big push for new members.
• 9:59
  [SPEAKER_01]: One thing to think about though is, you know, if you do it around the new years, around January, around February, a lot of your current clients are getting hit
• 10:09
  [SPEAKER_01]: And so you want to be cautious, you just don't want to encourage them to think elsewhere.
• 10:14
  [SPEAKER_01]: And if you get through the next couple of months, it's probably perfect timing for this podcast, because we're coming into March 8th, March 8th, and in my opinion, that's probably the best time a year.
• 10:25
  [SPEAKER_01]: If you're going to push a global rate increase to do it then.
• 10:28
  [SPEAKER_00]: Yep.
• 10:28
  [SPEAKER_00]: Yeah, we've made that mistake in the past.
• 10:31
  [SPEAKER_01]: We use that.
• 10:31
  [SPEAKER_01]: That's one of the things that we're allowed in
• 10:34
  [SPEAKER_01]: not so proud about, but that's why we share the inner workings of this gym.
• 10:39
  [SPEAKER_01]: You know, we did it in January.
• 10:41
  [SPEAKER_01]: It kind of kicked us in the pants a little bit.
• 10:43
  [SPEAKER_01]: And we just kind of give everyone all that word of advice.
• 10:46
  [SPEAKER_01]: Yeah.
• 10:46
  [SPEAKER_00]: Yeah.
• 10:47
  [SPEAKER_00]: You guys provide a great product.
• 10:50
  [SPEAKER_00]: You're saving lives for helping people.
• 10:52
  [SPEAKER_00]: You're up early.
• 10:54
  [SPEAKER_00]: You're here late.
• 10:55
  [SPEAKER_00]: Like you deserve to make
• 10:58
  [SPEAKER_00]: a decent living.
• 10:59
  [SPEAKER_00]: You just are.
• 11:00
  [SPEAKER_00]: I mean, do not be afraid of it.
• 11:02
  [SPEAKER_00]: This is not a starving ordismantality business.
• 11:06
  [SPEAKER_00]: You're providing a great service to typically very wealthy in, you know, people that would be more than willing to pay a higher price for a better service.
• 11:17
  [SPEAKER_00]: Okay, I mean, not to say everybody goes to Jim's wealthy.
• 11:20
  [SPEAKER_00]: That's not my point.
• 11:21
  [SPEAKER_00]: My point is is that they can afford it because they value their inner Jim right now.
• 11:24
  [SPEAKER_00]: They value what you do Raising 5% 10% like at a minimum 3% a year is inflation so just by default
• 11:35
  [SPEAKER_00]: That's like the minimum you should be doing.
• 11:38
  [SPEAKER_00]: Plus, you're giving your coach's wages every year, like literally unless you're increasing your member count, like globally, every year you're gonna get make less and less and less money.
• 11:49
  [SPEAKER_00]: Yep, that's just, it's not good formula.
• 11:52
  [SPEAKER_00]: Let's be honest, you won't be around.
• 11:54
  [SPEAKER_00]: I mean, at the end of the day, you just won't be able to keep your doors open and everything's gonna be grinded and struggling, you're gonna hate your business and that's how what you did this for.
• 12:01
  [SPEAKER_00]: So guys, just take all our look at your numbers,
• 12:04
  [SPEAKER_00]: make a game plan.
• 12:06
  [SPEAKER_00]: If you need help with any of this stuff, link will be in the show notes guys.
• 12:09
  [SPEAKER_00]: We'd love to help you kind of do this price raise, you know, charge what you're worth.
• 12:13
  [SPEAKER_00]: Don't lose people and make more money like what the heck's the problem with that, right?
• 12:18
  [SPEAKER_00]: So hopefully that ups you guys, low 99 cent tactic there for you.
• 12:23
  [SPEAKER_00]: Until next episode, guys, keep changing lives.
• 12:25
  [SPEAKER_00]: We'll see you on the next one.
• 12:26
  [SPEAKER_00]: Bye.