October 13, 2009

TUESDAY 091013

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CrossFit Woodbridge (VA) just moved from a garage to 1800 sf. The photo is actually a compilation of three images of owner Dan Broughton performing the first WOD in the new facility.


CrossFit Tacoma (WA) hits the one-year anniversary. Read "One Year On" -- a look back at the growth of their business.


Imagine you're a new affiliate: How do you figure out your prices?

Imagine you're an established affiliate: How do you know when it's time to raise prices?

Posted by Lisbeth at October 13, 2009 12:05 AM
Comments

As a new affiliate I'm dying to here what some of the old hands have to say.

For me at this stage it's charging what I can to get people in so that they can experience it see the value and get hooked.

I have very little overheads at this stage, working out of a commercial gym, so it's about building a client base that can sustain me an income to move out into my own box for bigger and better things.

How do you knwo when to raise the prices? when your schedule fills up?

Comment #1 - Posted by: Tommy CrossFit Feel Good at October 12, 2009 9:55 PM

Why no matting under the pullup bars? I've seen this at a few boxes, and people can easily slip off pullup bars, some padding (rubber) on the ground certainly wouldn't hurt.

Comment #2 - Posted by: B2 at October 13, 2009 1:02 AM

Demographics within a 5-mile radius of your affiliate. Search online for this and you'll learn a ton about the people who live around your gym. Do not base your pricing on affiliates in your area. BE YOU! Set the standard.

Comment #3 - Posted by: Rick at October 13, 2009 2:05 AM

When we were training athletes out of our 300 sq ft garage we had very little overhead so we were able to have our prices below what may seem the "norm" for other affiliates. I agonized for days over what to charge. In that time I read a quote by Coach Rip on the forum that said to the effect of "charge what you're worth." I took that advice and being a new trainer only charged what I felt I deserved. Mostly because as I was teaching my athletes to be better athletes, they were teaching me to become a better coach. Once we moved to our new facility (1500 sq ft) a year later, I raised the prices almost 25% due to overhead and the need for more equipment but kept the prices the same for my established athletes. The ones that stuck with me when we had so many people inside the garage that we had to open the garage door and it was 10 degrees outside. Even though we could charge more and may raise prices slightly in the coming years, we have found the price range that is fair for everyone involved. The need to raise prices will be based on overhead and need for more equipment.
I could care less if I'm driving some new car or about having fancy stuff. I'll never raise prices so that I can have a different lifestyle. My satisfaction comes from helping people find that athlete within them.

Comment #4 - Posted by: polo lopez @ CrossFit CFT at October 13, 2009 4:42 AM

We are a new affiliate- Just three months in the making. I started out at a globo-gym and brought my client base (of about 15) to our new box- where the only overhead we have is my salary (and eventually paying back the money invested in the start-up). We opened our affiliate with relatively low prices as compared to other affiliates in our area (closest two are 45min away)but relatively higher than the traditional fitness centers closer by---but we all know what they are worth, don't we? Anyway, we decided to run a special introductory rate for the first 50 members- we just hit that mark two weeks ago and have since raised our prices by $15. We are still not charging as much as other affiliates and frankly I know we are not charging as much as we are worth, but we will now hold these prices for the next 25 members so we can create a sense of urgency to. As word is spreading through the community about us, people are realizing all the great things about CrossFit, about us, and our value is being established. We have kept our first 50 members at their introductory prices and have had to explain to new members coming through the door that we would love to charge "high-fives" instead of dollars but somebody has to buy more squat racks, bumper plates, GHDs, and rowers to equip all these new members!

Comment #5 - Posted by: Karen_CrossFitOIB at October 13, 2009 5:36 AM

Low prices mean low quality. Cheaper is not good for a specialty service.

#1 Find the price where 1/3 of the people who come in complain about the price. Then you are at the "right" price.
#2 See #1

Comment #6 - Posted by: DChap at October 13, 2009 6:29 AM

Go Woodbridge! I'm in UT now but graduated from WSHS way back in 95. Good to see Crossfit spreading to all my favorite places. We're currently priced from $125 to $155. Each time we've hit a membership metric (50, 100, next is 150) we've raised our prices a little for new members but grandfathered existing ones.

Comment #7 - Posted by: Damon at October 13, 2009 6:59 AM

Thanks for the shout out.

Prices are a touchy subject. First, don't charge more than you're worth. If you're just starting out or if all you do is supervise an open gym, you shouldn't be charging high-end rates.
The 3 keys are quality, quality, and quality. Get better at coaching, programming, get some successes with people. You need to have some high level athletes (that you coached to that level) in order to justify high prices.
If you're not getting results, then what are they paying you for?
Since we're focused on the results, we intentionally charge a higher rate- people are less likely to skip out if they have something on the line.
People will wince at every price. There are even some people who don't go to the $30 globogym because of the price. But there are those who will value what they do more because they have to pay more to do it.
There is a great book that talks about price anchors called "Predictably Irrational" by Dan Ariely. It won't tell you how to determine a price, but it will explain a lot of the psychology that is behind determining the value of something.

Comment #8 - Posted by: Morgan, CF Tacoma at October 13, 2009 8:13 AM

Dan great move to the newer and bigger box!

Comment #9 - Posted by: Dan S. at October 13, 2009 12:02 PM

I have to agree with Dchap and I will add that
If you under charge your doing your CF community a disservice. I can't tell you how many times I get the line, "At blank box they only charge this". Charge what your worth and the folks who become members will be more committed to their fitness.

Comment #10 - Posted by: Jen at October 13, 2009 3:09 PM

This is an important conversation. Your personality and confidence will play a strong role in a) what you will charge, b) what you'll feel like asking, and c) whether you'll get it or not.

I always made sure that I was charging considerably more than the average training rate and made sure that the margins by which my training was better than average were even greater. To wit, when the average trainer was making $40/session, Lauren and I were charging $75/session, but we figured that was a bargain because our training was three times more effective and fun. I also never raised the rate on a client, ever, but extracted ever increasing amounts from newcomers. My clients locked into a rate for a lifetime. Early adoption/support had it's rewards. I generally kept my rates about 50% above the regional mode (by dead-reckoning).

In the traditional non-CF gym model the memberships of the super committed are in effect subsidized by the large number of gym members who do not go to the gym but continue to pay. That's not our business model. You want to look not at what gym membership at Gold's, Balley's, or Spectrum costs but the average take per client of their trainers. On the basis of that comparison our average CF affiliate monthly fee of $150 is a steal, and those are the clients you want - people who want to be trained.

I'd rather be the most expensive CF trainer in a demographic region than the least expensive - by far. The guy undercharging the market is making a statement about his worth that I'd never make.

These are my opinions.

Comment #11 - Posted by: Coach at October 13, 2009 4:26 PM

Coach, those are very good points. Being bold and setting a higher rate isn't about making money, it is about telling others "my service is superior and I can back it up".

By that reasoning alone, word of mouth and results will get you clients and make your box/affiliates more sought after by those who want to get the best training for their money and they will avoid the chain gyms and their subpar staff.

Comment #12 - Posted by: Jay Ashman at October 13, 2009 4:58 PM

Thanks Coach,
That is a stance I should have had the confidence to take when i first opened 15 months ago.
I think that my inexperience as a CF trainer affected my decision to charge according to what I "thought" my demographic would pay vs. what I thought I "might" be worth.

I know better now.

I think people will more quickly follow a confident, passionate, and professional trainer who stands by his prices and can demonstrate "why" his/her prices are the rate they are.


Comment #13 - Posted by: BrianY at October 13, 2009 5:11 PM

Ah, Coach, would that we could do that in the world of my day job...

Comment #14 - Posted by: bingo at October 13, 2009 5:12 PM

Always glad to hear from you coach. I hope you post here more often! I could not agree with you more. The CF affiliate that is undercharging is definitely making a statemnet of self worth. I tell people who wonder why my gym costs so much that if you want to buy a Hugo then go to a Hugo dealership...if you want to buy a Ferrari then go to a Ferrari dealership...Crossfit is the Ferrari of fitness.

Comment #15 - Posted by: merle at October 13, 2009 5:43 PM

Coach,

Absolutely agree.

That's the path we have taken & it has been rewarding us greatly.

Leo S

Comment #16 - Posted by: Leo S at October 13, 2009 5:45 PM

Thanks as always for your words Coach. We can't wait to see you next month at the CF 101 at Brian Yoak's box.

We have open-session (not open gym) memberships where clients can attend workouts on an unlimited basis during any of the established time slots each week and a more expensive Executive Program where participants attend workouts at specific times each week, outside of the regular open-session time slots. The Executive Program folks pay more than double the normal membership rate and are by and large happier. They receive more personalized instruction and have the entire facility reserved for their group's use.

Thanks again Coach for providing us with such a valuable opportunity to really change people's lives for the better. This shit really works.

Regards,

Bill Russell

Comment #17 - Posted by: Bill Russell at October 13, 2009 7:00 PM

Great questions. While in the Park, I decided to keep things very cheap since our equipment was so limited and our numbers were so few. I went with approximately $50/month, which helped get things going and allowed for a small budget to buy more items like plyoboxes and dumbbells.

I raised prices about a month before we moved into our box to approx $100/mo, but offered people a discount to keep their rates the same if they paid for 6 or 12 months in advance. This helped generate more cashflow to finance more purchases and construction.

Finally, last month I raised our prices again to help curb growth while I got the box finished up, and waited for all the equipment to be in place. That price increase to approx $125/mo didn't work as growth continues unabated. So fast that I'm likely to reach capacity here by year end, so I'm thinking of raising prices again. That increase will provide even more cashflow to fund further expansion, like a planned second site in Bogota within the next 2-3 months.

People tell me they think my pricing is still an amazing deal for the quality of training and environment, especially when compared to the alternatives here in Bogota, and encourage me to raise them even higher. I'm pretty good where prices are now, and think it's a good balance that will allow growth to continue at a nice steady pace, and pave the way for future expansion.

Comment #18 - Posted by: Geoff - CrossFit Bogota at October 13, 2009 7:20 PM

Thanks as always for your words Coach. We can't wait to see you next month at the CF 101 at Brian Yoak's box.

We have open-session (not open gym) memberships where clients can attend workouts on an unlimited basis during any of the established time slots each week and a more expensive Executive Program where participants attend workouts at specific times each week, outside of the regular open-session time slots. The Executive Program folks pay more than double the normal membership rate and are by and large happier. They receive more personalized instruction and have the entire facility reserved for their group's use.

Thanks again Coach for providing us with such a valuable opportunity to really change people's lives for the better. This shit really works.

Regards,

Bill Russell

Comment #19 - Posted by: Bill Russell at October 13, 2009 7:43 PM

"people who want to be trained."

Coach, I think was a very important statement.

I and many others probably suffer from the, "I want to train in CF" but not be trained by others or certain trainers.

It is a very good statement of making sure to look for trainees that want to be trained rather than just training somewhere. Kind of describes the target niche.

Comment #20 - Posted by: Blair Lowe at October 14, 2009 12:40 AM

This is an interesting topic. I do crossfit, both on my own and thru a "official" crossfit facility in the Virginia Beach/Norfolk area of Va. This area has become saturated with crossfit. Just in my local area there are 5 to 6 crossfit facilities plus many excellent trainers that are not crossfit, plus Golds, Ballys, Private Gyms, MMA facilities, Base Gyms, etc. Some of these facilities are now offering Crossfit Like workouts as well. The point here is that there are no lack of places to work out. Most Crossfit facilities are charging around $120-$130. An interesting side note here is that the place that was billed as being the East Coast Crossfit Headquarters Training center is now offering cross fit to the public for about half that amount (if I was a paying affiliate I would be scratching my head on that one, or at least asking if my yearly affiliation dues are going to support a HQ that is taking customers from me). I hate to say it but when the market and competition is like it is maybe affiliates/Crossfit HQ need to look at other ways in keeping/getting new membership. You are trying to attract people to pay for a work out that by its own invention was made to be done in a persons garage. The hard core “I only want the most dedicated people” may work if you are the only game in town. Your goal by being in business is to make money. No, not break even. Hardcore does not pay your rent, feed you, fix your car when it breaks down or pay for a retirement account. I guess the main point I am trying to make is that for the most part the people who are trying to make a living thru cross fit might need to look outside the Crossfit box when it comes to pricing, maintaining membership, marketing, etc. Individual trainers need to decide whether this is a hobby or a business. You can be passionate about both but make a living only thru one.

Comment #21 - Posted by: SvenG at October 14, 2009 6:20 AM

SvenG -- allow me to clarify -- there is no HQ-sponsored affiliate. All CrossFit affiliates are privately owned and independently operated. Therefore, your statement about "affiliation dues are going to support a HQ that is taking customers away from me" is just wrong.

Your other points, however, are worth considering in the context of this discussion.

Comment #22 - Posted by: Lisbeth at October 14, 2009 1:12 PM

We put a lot of gear in the Blauer Tactical Training Center intending to do a lot of seminars at that location. The motivation was to have a place with enough gear to run parallel chippers with 20 circuits of 15 stations, etc.

Early we decided that it was more important to do seminars at affiliates boxes and keep the location for cert's moving.

We left the gear their for my friend Tony Blauer to use. Now Brendan Gillian and CF Obsession have rented space from Blauer Tactical and Atlantic Dive Supply, and they're using the gear. I never considered this a sponsored affiliate but it is surely being subsidized by us and I'm bothered by CF Obsession undercutting the market with our help.

I'm going to ask my friend Brendan to make his rates comparable to the other affiliates and to either begin making payments for the gear or we're going to take it back.

This is an oversight and it's going to be corrected. You weren't quite right in the specifics, Sven, but you are in principle. Thanks.

Comment #23 - Posted by: Coach at October 14, 2009 5:11 PM

Re my last post: Our Affiliate Director, Lisbeth Darsh, had no knowledge of any of the particulars surrounding CF Obsession, the gear, or our relationship with Blauer Tactical and Atlantic Dive Supply.

Comment #24 - Posted by: Coach at October 14, 2009 5:13 PM

CF Obsession. Interesting story. Glad to hear the solution.


Comment #25 - Posted by: Leo S at October 14, 2009 5:37 PM
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