How and When to Raise Gym Membership Fees

Raising gym membership fees is one of the decisions owners put off longest, because every scenario they imagine ends with members walking out. In practice a modest, well-explained increase costs almost nobody, and the gyms that never raise rates are the ones that end up overcrowded, underpaid and unable to invest.

Here is how to raise fees without a revolt: when a rise is due, how to announce it, what to protect for your longest-standing members, and why new and returning members should simply pay today’s price.

In this blog, we’ll chat about raising gym membership fees for new and returning members, why it’s perfectly OK to keep prices lower for loyal clients, and how to create a sustainable pricing structure that keeps your gym running smoothly.

The Value of Loyalty

It’s OK to keep rates lower for long-term members who are the backbone of your business. These folks have been with you through thick and thin, and their loyalty speaks volumes about the quality of your service.

The last thing you want to do is push them away by raising gym membership fees too much for them, if at all.They bring in consistent revenue and often become ambassadors for your gym, referring new clients through word-of-mouth.

Many gym owners worry about alienating loyal members when they consider raising gym membership fees. But it’s perfectly OK to keep rates the same for your long-time members, even as you raise them for new or returning clients. Here’s why:

1. They Deserve It: Your most committed members deserve to feel appreciated for their long-term support. Freezing or offering a minimal increase can make them feel valued. 
2. Consistent Income for You: These members offer a consistent and reliable revenue stream. They’ll appreciate being recognized for their loyalty.
3. Free Word-of-Mouth Marketing: Long-time members are more likely to recommend your gym. This type of organic marketing is invaluable.
4. Avoiding Pushback: Raising rates on loyal members can raise friction, but usually only among a small minority. You can sidestep the risk and still get the revenue boost you need from other sources.

Still, if you find it necessary to be raising gym membership fees for everyone, you can lower your stress and the risk of too much pushback from current members.

Read “Beyond Breaking-Even: How to Set Gym Membership Prices”

“All businesses need to raise their prices from time to time,” says gym owner and coach Mark Fisher. He says it’s best to send an email that is clear about the increase. Then follow it up with a phone call, text message, or other communication.

Apologize for the inconvenience, but don’t agonize about a simple fact of life. Expect that a small minority might object or even go somewhere else, but remember that you might end up bringing in more revenue with fewer members. 

Share a list of how you’re investing in the business to make it even better for them, he says.

New and Returning Clients

For new or returning clients, it’s a different story. They’re less emotionally tied to your gym and are more likely to expect rates in line with the current market conditions.

Raising gym membership fees for these people can be a crucial step in maintaining your gym’s financial health, especially if your operational costs are rising.

Don’t worry too much that masses of people will object “just because you’re a little bit more expensive,” says gym owner and business coach Vince Gabriele. 

Many consumers, in any market, equate higher cost with better quality. And you don’t want to price yourself so low that you appeal only to bargain hunters.

“If everyone signs up because the prices are too low, you’ll start running into issues like the gym being too crowded,” Gabriele says. “You’ll need to start hiring more trainers and support staff, invest in more equipment and eventually a larger facility.

“Charging less than what you’re worth is bad for you. No one wins when you undervalue what you do.”

Raising Gym Membership Fees: Why?

Here are some reasons why you might want to consider raising gym membership fees. Have you experienced any of these?

1. Reflecting Current Value: Over time, you’ve probably upgraded your equipment, added new classes, or expanded services. These improvements justify a higher price point for new members who haven’t yet experienced what your gym offers.

2. Keeping Up with Inflation: Your costs (like rent, utilities and maintenance) go up every year. Raising rates for new and returning members allows you to account for these increases without passing those expenses onto your loyal members.
3. Quality Perception: A membership rate that’s too low can signal that your gym may not offer high-quality services. By raising rates for new and returning members, you attract a higher-end clientele.
4. Differentiating from Competitors: If your competitors are raising their rates and you’re not, it might signal that you’re offering an inferior experience. By staying competitive, you’re showing that you’re relevant and keeping up with industry standards (or even surpassing them).

Returning members might expect to pay a little more after being away, especially if they left due to personal reasons unrelated to pricing.

You can frame raising gym membership fees as part of the improvements and upgrades they’ll enjoy when they return. That should cool down any tension and keep things going smoothly.

The Key to Sustainability

To keep your gym running efficiently, you might find that a flat monthly rate of $100 to $150 is necessary. This baseline rate helps cover basic operational costs, such as rent, utilities, equipment maintenance, and staff salaries.

This also simplifies the membership process for both you and your clients, eliminating confusion over multiple pricing tiers.

But you want to be sure that everyone understands what’s covered in the flat rate – say, just general access to the gym’s core offerings like:

• Access to workout facilities and equipment
• Use of common areas like locker rooms and showers
• Participation in standard classes or group fitness sessions

You can create add-ons (and more money!) by offering personal training or specialized small group training as a separate, additional cost. Clients who want more will be happy to pay more for it.  

And individual and small group training doesn’t mean you have to be raising gym membership  fees for everybody. Keep it simple, like this:

1. Individual Training: Offer 1-on-1s for an extra cost. 
2. Small Group Training: Limit participation to no more than 6 people and charge less than 1-on-1 but more than general membership.  
3. Value Proposition: You’re creating an upsell opportunity here, which can drive revenue higher.

Conclusion: Pricing Strategy as a Balancing Act

At some level, raising gym membership fees is a simple fact of life at some point.

But keep these points in mind about raising gym membership fees:

• Keeping rates low for current members can be a smart way to reward loyalty, boost retention, and nourish relationships.
• If you have to give everyone a price increase, you really can manage it with a clear conscience and mindful communications.
• Increasing rates for new and returning members ensures your gym remains financially sustainable.
• Using a flat monthly rate in the range of $100 to $150 with add-on services helps you maintain consistent cash flow and offer premium.

Ultimately, when it comes to raising gym membership fees, the key is finding the right balance between client satisfaction and the financial health of your gym.

Do your homework, make the right decision for your business, and communicate the value to members and prospects. With a thoughtful approach to pricing, you can position your gym for long-term success while keeping both new and loyal members happy. Setting gym membership prices is just one of many topics important to your business. You can learn about so many others through Naamly Online University. It’s your weekly pulse on fitness industry news, events, and content from the best in the business. Enroll today!