Here’s how to raise prices in your health, fitness or wellness business. Clue #1: don’t do THIS:
TYPICAL BADLY-PLANNED & POORLY-COMMUNICATED
PRICE INCREASE ANNOUNCEMENT:
If your health club, corporate wellness program, yoga studio or wellness center hasn’t raised its prices yet, you’re probably thinking about it.These seven communication techniques transform a potentially negative change into an opportunity to actually strengthen your customer and member relationships:
1) Start with value, not cost.
Your costs are irrelevant and uninteresting to your clients, customers and members. As far as they’re concerned, that’s your problem to manage.
Your business has to earn the right to raise prices by offering so much value to your customers that their reaction to an increase is:
“About time. In fact, I’d happily pay even more than that!”
Want to lose a customer? Send them a terse bureaucratic note that says “We haven’t raised our prices recently and costs have gone up so now we’re increasing our rates by 5%.” (That’s the postcard I just got from my health club, by the way.)
2) Remind them of past benefits.
Refresh their memory with a short recap of the difference you’ve made in their lives during the last year.
If you’re able to personalize it by pointing out specific accomplishments, great. At a minimum, point out new or enhanced products and services that your wellness business has added.
If your weight management program added new counseling features, mention them. Perhaps you’ve upgraded your staff and you now employ only licensed healthcare professionals like RDs and physical therapists. Your health club or fitness center probably added new equipment or updated your group fitness classes. Or your yoga studio may have added yoga therapy or new styles of yoga. You may have offered free events like health fairs or public seminars or sponsored community or charitable events.
3) Excite them about the future.
Position your price increase as an investment that will pay off for your customer with even more benefits that they’ll enjoy over the upcoming months.
Planning to add a new fitness class? Or an affordably-priced sports league? Maybe you’re expanding your line of nutritional supplements or adding a new therapeutic modality at your wellness center. Perhaps you’ve lined up local physicians and dietitians who’ll offer free healthy living seminars.
4) Offer the “sleeves out of your vest”.
Pair a negative – the price increase – with a positive – something that your customer will value and that costs you little or nothing to offer.
For example, if your health club is raising its monthly fees, give every member who comes in on the first day of the month for the rest of the year a free bottle of water. Or include a booklet of healthy living tips or inspirational customer success stories written by your staff.
Another good option that can actually lead to additional revenues – a certificate for a complimentary health risk assessment.
5) Skyrocketing costs are a special case.
Sometimes, despite your best efforts, a certain cost skyrockets. The most obvious example for wellness businesses whose health coaches and other health and wellness professionals travel to client sites is the sharp increase during the last couple of years in the price of gasoline.
Customers may have some sympathy for these cost increases, so in this situation it’s OK to briefly explain unusually high and hard-to-control cost spikes that have dramatically affected your business and necessitated a price increase.
Three words to the wise, however:
First, you STILL have to sell the value of what you’re providing. It doesn’t matter how well you explain the cost increase. If people simply don’t think your services are worth another $60/year, you’re cooked.
Second, “normal” cost increases are just part of doing business. Don’t expect sympathy from your customers if you’re blaming your price increase on higher costs in general. No one’s cutting them a break, right?
Third, be ready to drop your prices if that certain cost goes down. That’s why you saw water delivery services and drycleaners add a fuel surcharge that they later suspended as gas prices dropped sharply.
6) Toot your own horn.
Let your customers know that you’ve been able to minimize your price increase thanks to your team’s careful cost management.
Did you negotiate a rent reduction for your health club, yoga studio or wellness center? Maybe you switched from incandescent light bulbs to compact fluorescents. Did you add fans to keep the workout area comfortable while saving on air-conditioning?
Make sure they know that you actively control your costs.
7) Consider strategic price increases.
Targeted price increases avoid the risk of unintended customer attrition associated with across-the-board increases.
A strategic price increase is designed to eliminate a certain product, service, or customer segment with minimum hassle. Say you have a program that’s tough to keep staffed or is “high maintenance” for some other reason. But you don’t want the bad word-of-mouth associated with simply shutting it down.
Another way to accomplish the same result is simply to raise the price significantly. Customers will drop out of that program without the hard feelings that other approaches might cause.