THREE SIMPLE TIPS FOR RAISING YOUR RATES WITHOUT LOSING CLIENTS.
As a coach or gym owner, the fear of raising your rates and losing all your clients is a real one, often preventing the business from charging what is required in order to both properly service your clients and make a profit.
Alas, you shy away from it. Procrastinate. Or decide you’ll wait another year before you pull the trigger.
But the longer you wait, the worse it will be, especially right now with inflation at the highest it has been in decades.
And the good news is, you’re not going to lose all your clients. Sure, you might lose a couple, but if you roll out your rate raise well, you will come out ahead.
At Madlab School of Fitness in Vancouver, B.C., we just rolled out a reasonably significant rate raise after our rent went up by 30 percent, which has some clients paying as much as $50 a month more than they used to. In other cases (for those who were paying current rates), rates increased by just $10 or $20 a month.
The result: Not a single client quit.
Three Tips from Madlab School of Fitness Coaches
While it can be tempting to simply roll out an unapologetic email that rates are going up, Netflix-style, as a coach, and unlike Netflix, you have a real relationship with your clients.
In light of this, Madlab coaches found it effective to have a one-on-one conversation with each of their clients, giving them a chance to really look the client in the eye, read body language, etc., and address any concerns individually. It’s a lot of work, yep, but it’s worth it if it means keeping all of your clients.
Be Sincere and Considerate but also Unapologetic.
There’s a reason you’re raising your rates: It’s what is required for the business to stay alive, so although you might want to apologize profusely, it’s not something you need to be sorry about.
Sometimes people just want to be heard. They want to complain a bit, so listen with empathy and then let them make their decisions. As Madlab coaches learned, complaining doesn’t necessarily mean they’re going to quit. It just means they want to be heard, and then they move on and start paying the new rate.
Transparency is OK
One question that often comes up around raising your rates is whether you should focus on the value you’re providing to the client or whether you should be transparent about your expenses and costs.
Some gym owners who have raised their rates say there’s no point in telling clients about your expenses because all they want to know is what you can do for them. So focus on that only.
While that does make sense in theory, we found that letting clients know in a matter-of-fact way that our rent has increased by 30 percent and other costs have gone up because of inflation—being super transparent about why we need to do this—helps them accept the rate hike.
This, of course, doesn’t mean you can’t still focus on the added value you’re going to give them along with this rate raise if you are, in fact, going to provide more value, but from our experience, it’s OK to be transparent about your increased costs and expenses.
Pro Tip: While a little uncharacteristic, here’s what happened whenever a coach-led with, “I have some bad news.”
The client looks momentarily worried, and then the coach says: “Our costs are way up. Rent has increased by 30 percent. We have to raise our rates. As of May 1, your rate is going from $275 a month to $295 a month.”
The clearly relieved client says: “Oh man, you had me worried. That’s only $20 bucks a month. That’s OK. All good.”
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