Pricing Lessons for Personal Trainers

by Katie

This article is an excerpt from Katie's newsletter addressing personal training issues. You can subscribe to the free newsletter here.

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Three months ago I wrote about some experiments I was making with products on our site. Because our exam prep course and business plan products are so unique, I really struggled to figure out how to price them. I took the blind leap and decided to price them at 50% off compared to our nearest competition.

But this decision has always nagged at me. Am I giving too much away? What are the products really worth? And the same doubts plague personal trainers when they try to determine their rates.

So I developed some tests to help figure out the market. And you may be able to take some of the lessons I have learned and apply them to your personal training business. My tests were to cover the entire month of June. I wanted to get enough data to be able to make conclusions. The tests were:

Lower the price on our Business Plan Generator from $34.95 to $24.95, and

Offer a Double your Money Back Guarantee on our Exam Prep Course if the student failed their exam

Surprising Results

First, the business plan generator... I expected that revenue might drop because of the price reduction, but I wasn't prepared for the number of sales to stay flat. I had hoped that the lower price would increase the volume of purchases. But it turns out that the price of my business plan generator is really inelastic (my Economics Professor would be proud!). All that means is that people will buy a good product at a reasonable price. I wasn't losing sales when I sold the product for $34.95. And lowering the price wasn't a deciding factor in the purchase.

So in July I raised the price back up to $34.95. And here is the really surprising part. Since I raised the price, sales have increased by 50%. Now I realize that there are other factors at play, but 50% is a very healthy increase. My only conclusion is that the higher price better communicates the high value of the product. The same applies to our personal training services. I see a lot of new trainers charging as low as $30 per hour for their services. But if they focused on providing a high value service, they can easily charge $50 per hour and not lose clients. One of the things that has been keeping me so busy this summer, is developing our nutrition engine that will allow you to offer nutrition and workout tracking online.

More Surprising Results

The double your money back guarantee was a huge leap of faith for me. The idea of refunding more money than the customer actually paid seemed too generous. But I was ultimately convinced after reading a very challenging book called the 4-Hour Work Week. So I kicked off the double your money back guarantee in June and have extended it to July and August (and likely indefinitely).

The results? I was expecting to have to give refunds right and left. But it turns out that people have been passing their exams. In fact, in the last three months I have given one refund! So I essentially refunded an extra $25.

But during that same three month period, sales of the course have increased by 34%. Now imagine what your business would look like of sales increased by 34%. How can you apply a winning guarantee to your business? I recently saw one trainer advertise that clients paid nothing up front, they only paid for results. Not a bad strategy for somebody who is struggling to get clients. It will be interesting to see how it plays out over time.

The Lessons

So the lessons here are... don't be afraid to take a chance. Run tests on your business. Figure out what works and what doesn't. Of course none of this works without a valuable product so invest in your education and continually strive for improvement.

You can add your comments to this discussion below.

Links:

Exam Prep Course

Business Plan Generator

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Pricing Yourself
by: Shannon

I want to comment on how to price yourself and not sell yourself short. I am fairly new to training and started up a company of my own (Apparently that is what people do once they are certified!)Anyhow, I had a very difficult time asking people for $50/hr. I thought because I was new I should start asking for less blah, blah, blah.

I spoke with some colleages who have been trainig for years and every one of them told me I was absurd and that my time is precious. Reluctantly I took this advice and told my first client the price/hr (50$)and the response I got back was not what I expected! He had no problem paying that amount of money...not an issue at all! From then on it only gets easier... Once you start and once you get busy (and you will), your time becomes VERY precious to you so make it worth your while! People expect it will cost that much!

Thanks!

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Thanks for sharing!
by: Dorothy

As usual Katie, your honesty and sharing of what works is invaluable! I really enjoy hearing your updates because they actually are useful.

I'm going to play around with pricing, but hearing that lowering a price actually didn't reap any benefits is once again great to hear!

Thank you!

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Question for Shannon
by: Dorothy

Shannon,

What sort of area do you train in? Is it urban? Rural? I'm curious. I am just trying to get a pulse on how much local economy plays a part in pricing.

I live in a rural area that is generally quite depressed economically, although growing. I charge $45 an hour with various discounts based on sessions purchased, etc.

Let me know and thanks!

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Value is a perception!
by: Michael Harrison

Hey Katie, I discovered this site over a year ago and here I am, still checking in for new tips and ideas. Since starting this journey, I have expanded my personal training business and opened a Nutrition Center & Club. I can't stress enough the point you made about communicating the value of your services or product. Its strange, but in these hard economical times of a recession, people will still spend suprising amounts of money on Beauty Services such as "nails" and "hair coloring". Now what does this have to do with Personal Training you might ask? Well, its simple, the majority of people I talk to view Personal Training as a "luxury" item that is extravogant and unnecessary, yet these same people will spend $75.00 plus to have their hair colored, styled and cut. Huh??? Is is absolutely necessary to have this hair cut? NO! Not to me b/c I don't see the value in it. Maintaining my health and vigor is vastly more important to me and a much better value in the long run. As a Personal Trainer, I need to be able to communicate why my services are important and how this money spent will have returns later on in life. The bottom line is this:.... its not the price, its the preceived value. My prices are pretty basic b/c I am trying to marry up my nutritional packages with my training, but I am certain that I could easily charge $50 - $65 per session and people would pay it. Always remember, if you don't value your time enough to charge what is appropriate, then other people will not value your time enough to pay it.
Good Luck and God Bless.
michael

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I Charge by the Month and Quarter
by: Anonymous

I tried selling packages that allowed my clients to cancel individual sessions, but I found that some of them just canceled PT sessions whenever they needed or wanted to spend money elsewhere, like at Christmas time. Six discounted sessions are not meant to be spread over 10 weeks. So I decided to allow my clients to buy one session at a time without a discount or purchase discounted package.

All packages are monthly and quarterly, must be paid in full monthly or quarterly and expire monthly or quarterly. I offer once weekly, twice weekly and unlimited personal training. I calculate my rates based on 4, 8, or 13 sessions per month, although about half the months have an extra session in them. I mark my prices down about $10 per session off of my regular per session price.

The benefit to my clients is that they get a discount and often an extra session(s) for paying monthly or quarterly. If they miss a session and don't make it up that month, all that happens is that they lose their discount. The benefit to me is that I know what my income will be for the month and can plan accordingly. Plus, charging the way that I do holds my clients accountable for their fitness. With them missing so many sessions, they were not meeting goals which made us both look bad. Now I have the money to market and look more professional, because I'm not taking b.s. I explain my policy on the "Prices" session of my Web site: http://fsftraining.com/home.html

Pricing Lessons for Personal Trainers

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