Plenty of other industries are bullish about putting their prices up, pointing to inflation and rising costs to justify their decision. But with the advent of budget clubs in the health and fitness industry making it harder than ever for other operators to get their share of the 12 per cent of the population who will pay for a health club membership, it has become a price war.
In this economic climate, and with consumers ever more price-sensitive, how can a health club operator raise prices? Is it possible to introduce an increase in membership fees without adding value in some way to justify this?
Will even the budget operators have to consider price rises in the future? One has to question quite how long they can sustain rock-bottom membership rates with rent and energy prices rising – but does a price increase go against the very ethos of a budget club?
Another consideration is whether a price increase will even improve the profitability of a club. There’s a chance that a letter informing members of a price hike could prompt sleeping members to cancel their memberships, while price-conscious or unhappy members might go elsewhere. If this is the case, will attrition – and the cost of replacing lost members – negate the benefit of the price increase?
If you’re going to raise memberships, how do you go about it? Is a letter enough, or does there need to be face-to-face discussion with members?
Should price rises be universally implemented, or should loyal members get preferential treatment? And what research needs to take place prior to a price increase? Are high satisfaction levels a vital prerequisite, and should clubs first survey members for their thoughts on the service and facilities?
What about the competition? How much do your fees depend on what others are charging locally? We ask the experts.