How to Handle Inflation As a Gym Owner
And those hard conversations about raising rates
The pandemic caused a lot of us to grow weary after lockdowns, and some businesses took notice as the demand for services and products skyrocketed. Recently, Netflix raised their rates for the third time since 2019. Avis rental car had their most profitable first quarter ever, given the amount of people looking to vacation. You’ve probably noticed a surge in people wanting to return to the gym or enlisting in boutique fitness, willing to shell out more for trainers, workouts, and equipment that was previously unavailable. But there are also things we don’t enjoy paying more for—food, gasoline, or child care.
INFLATION AFFECTS EVERYTHING
Typically, inflation has hovered around 2% in growth each year and most gym owners and clients haven’t noticed—or cared all that much—with small price hikes. In 2021 alone, however, the inflation rate set a 39-year record by jumping to 7%! Not only did it affect your gym, but the gym equipment, your supplements, and just about everything in the fitness industry. Steel, which is used in the equipment we sell, has tripled since 2020. Around us, inflation is driving prices higher and some companies are using it to turn a profit, while others are trying to survive. If you’re a gym owner, what do you do? After all, if there are competing gyms in your area with lower prices, you might lose business, right? If you have personal trainers as part of your business model, they might even want a bigger piece of the profit just to make ends meet given the recent rate of inflation.
VALUE VS PRICE TAG
Are you adding value that will increase your member’s experiences? Those purchases can range from a new squat rack to adding an entire strength room. Perhaps your facility needs to expand and add new equipment. These improvements all come at a cost, but will also exponentially increase your client’s experience. Communicating with your patrons about raising rates that will positively affect their lifestyle helps them embrace the new rates.
People don’t like hidden fees or price hikes out of the blue. Instead, they respect honest and open lines of communication where they can ask questions and hear your reasoning. The easiest way to do this may be in a newsletter breaking down the cost and why memberships might go up another $10 a month. People want to take care of their neighbors who take care of their needs, and given that every gym owner is local, we want our cities to thrive.
For instance, in Austin, Texas, there’s a local Thai restaurant that’s popular with the residents in the community. However, they don’t allow tips for their servers or waitstaff. Instead, they communicate to their customers that they want to pay their employees a livable wage along with health benefits, so they charge more. When the pandemic hit, they had to raise their rates to help combat inflation so their employees could still have a livable wage.
Want to know what the community response was? They didn’t mind! Because of the communication, care, and concern for their workers and the restaurant, the patrons didn’t mind shelling out extra because they knew they were taking care of their workers and allowing the restaurant to function.
So what can you do if you’re forced to raise prices? Simple. Communicate with your clientele.
