Best way to break it to clients that an increase is coming?

[EdgarAllanPoe]

I have a number of clients that i've had for 4+ years who haven't seen an increase.

Last year I increased my rates but grandfathered in tenured clients. Now its time to get everyone on the same boat plus a little bit extra.

I have had my own studio for 3 years, spent thousands on eqpt, now pay scheduling software, now have an accountant, etc, etc, etc...cost of living. My expenses have gone up all over the place, plus my workload has increased. Keeping the place clean, rescheduling, etc...3% lease increase annually....new lease being negotiated now.

I was going to email with a few months notice and list a few of the things above as examples of my overhead increasing.

Any thoughts? Am planning to increase in August when my lease renews but give people the notice within the next few weeks.

[RamsdenF]

Very interesting topic. Would love to get your thoughts on a few things below.

I have a number of clients that i've had for 4+ years who haven't seen an increase.

Last year I increased my rates but grandfathered in tenured clients. Now its time to get everyone on the same boat plus a little bit extra.

Now why is this your rationale? What exactly constitutes the need to "get everyone on the same boat plus extra" ?

Also why did you never see the need to increase rates in 4+ years? Did you start out with a high price tag?

I have had my own studio for 3 years, spent thousands on eqpt, now pay scheduling software, now have an accountant, etc, etc, etc...cost of living. My expenses have gone up all over the place, plus my workload has increased. Keeping the place clean, rescheduling, etc...3% lease increase annually....new lease being negotiated now.

Don't you think this is more of a "high expense" problem vs a "low income" problem?

It may be too late to really do much about it now if you are paying off equipment etc, but this is often the problem I see not just in business...but in peoples personal lives too. Spending too much money and adding too much to the liability column. Perhaps this situation could have been avoided?

I was going to email with a few months notice and list a few of the things above as examples of my overhead increasing.

Any thoughts? Am planning to increase in August when my lease renews but give people the notice within the next few weeks.

Ya, I would definitely give a heads up. Might even want to do it in person if the relationships with these clients are strong ones.

Prepare for resistance. Some will say "oh no problem, I understand" while others will say "Ive been here for xyz years and have never had my price increased."

Finally, maybe you could share some insight on your own experiences in regards to expanding your business. For instance, I planned on grandfathering everyone in same as you, and when I increase prices it will be on NEW INCOMING CLIENTS ONLY. I keep my expenses as minimal as possible(just good business practice). But what variables would force me to raise the prices on EVERYONE? Or is it just because that your expenses are super high that you need to raise their price in order to justify spending the time to train them?

Also do you mainly do 1on1 PT or group training/bootcamp?

[WoofieNugget]

The way I have done it (I generally do small increases annually or every two years so people expect it) is to let them know ahead of time that rates are increasing - but allow them to buy as many sessions as they want at the old rate up front (with payment plans if required).

People expect prices to go up, just don't make it prohibitive. Make sure that your rates are still competitive based on your market or a bit above from the sounds of it.

[EdgarAllanPoe]

Very interesting topic. Would love to get your thoughts on a few things below.

Now why is this your rationale? What exactly constitutes the need to "get everyone on the same boat plus extra" ?

Also why did you never see the need to increase rates in 4+ years? Did you start out with a high price tag?

Don't you think this is more of a "high expense" problem vs a "low income" problem?

It may be too late to really do much about it now if you are paying off equipment etc, but this is often the problem I see not just in business...but in peoples personal lives too. Spending too much money and adding too much to the liability column. Perhaps this situation could have been avoided?

Ya, I would definitely give a heads up. Might even want to do it in person if the relationships with these clients are strong ones.

Prepare for resistance. Some will say "oh no problem, I understand" while others will say "Ive been here for xyz years and have never had my price increased."

Finally, maybe you could share some insight on your own experiences in regards to expanding your business. For instance, I planned on grandfathering everyone in same as you, and when I increase prices it will be on NEW INCOMING CLIENTS ONLY. I keep my expenses as minimal as possible(just good business practice). But what variables would force me to raise the prices on EVERYONE? Or is it just because that your expenses are super high that you need to raise their price in order to justify spending the time to train them?

Also do you mainly do 1on1 PT or group training/bootcamp?

Had 30 min/45 min/60 min sessions in the past. Now only 45 minutes. Transitioning 30 mins out as we speak. Few clients have had 30 mins for 4 years. Rescheduling/making up/filling slots will be easier. Getting everyone on the same pay scale is easier as when I have increases in the future it will be affecting everyone the same, easier sale. This time there will be a bigger jump for tenured clients but its necessity.

I do exclusively one on one, I do not do any boot camp/groups/pairs any more. I only like one on one so I only do one on one. I used to do the others. I am currently booked to the max, I'm not taking on anymore clients and I have a waiting list. Supply/demand. There is no reason why I should not be charging more. I'm in the ballpark of studios around me price wise but i'm the only gym that is straight up 1 on 1 and they have access to the entire studio. If people are willing to pay $2 then why should I continue to accept $1 type logic.

It's not a high expense vs low income problem. It's just a "how do i create even more profitability" action. My expenses inevitably increase. You sign a long term lease and your rate will go up. In order to keep the same profitability with any business that always falls back on the buyer.

As my client base has increased, my income has increased....It hasn't been much of a thought I suppose over the first three years as I continue to make more and more money. That that I'm full with a waiting list I have room to sit back and decide how to make biz more profitable.

I just don't like the "confrontation" aspect this may create. That's no fun but its a necessity.

I've never borrowed any money, I do not owe any money. Every month I've been open I've been profitable.

The way I have done it (I generally do small increases annually or every two years so people expect it) is to let them know ahead of time that rates are increasing - but allow them to buy as many sessions as they want at the old rate up front (with payment plans if required).

People expect prices to go up, just don't make it prohibitive. Make sure that your rates are still competitive based on your market or a bit above from the sounds of it.

All my clients are recurring billing. I don't do long term deals, every thing I do is 4 weeks at a time. So was thinking 1st of May I make the announcement and show the new rates then tell everyone this rate will go into affect for your first billing cycle in August.

X, Y, and Z are the reasons....this provides you with a few months to assess if you would like continue with your current training plan as is before any changes are made.

[EdgarAllanPoe]

Finally, maybe you could share some insight on your own experiences in regards to expanding your business. For instance, I planned on grandfathering everyone in same as you, and when I increase prices it will be on NEW INCOMING CLIENTS ONLY. I keep my expenses as minimal as possible(just good business practice). But what variables would force me to raise the prices on EVERYONE? Or is it just because that your expenses are super high that you need to raise their price in order to justify spending the time to train them?

If your monthly lease is 2000 and you are increased 3% annually. Next year each month will be 2060. 24720 annually compared to 24000. Now add to that two more annual increases at 3%.

Factor in some of these clients were with me when I had no monthly lease. So three years ago that monthly rate went from $0 to $2000 and they didn't see an increase.

I try to be fair to tenured clients and I've basically grandfathered them in for 4-5 years. I believe that is toooooo fair.

I've found the longer I do this, its always best to be universal with all clients. Cancellation policies, billing practices, session lengths, billing rates, etc.

So you increase rates annually and grandfather clients in. After five years you end up with 5 different sets of rates out there. You also may have a 45 minute slot where someone five years ago is being charged $35 and someone who just signed up is being charge $55. Now you're potentially losing $20 EVERY time you train that $35 person.

I feel loyalty to a client is putting them in a position to succeed, answering all their questions, giving them what they're paying for.....Loyalty isn't continuing to be cheap. Heinz ketchup isn't loyal to the old people that ate that back in the 70s. Those older people pay what all of us pay today. Not a perfect analogy but it is a fitting one in my opinion.

[RamsdenF]

Had 30 min/45 min/60 min sessions in the past. Now only 45 minutes. Transitioning 30 mins out as we speak. Few clients have had 30 mins for 4 years. Rescheduling/making up/filling slots will be easier. Getting everyone on the same pay scale is easier as when I have increases in the future it will be affecting everyone the same, easier sale. This time there will be a bigger jump for tenured clients but its necessity.

I do exclusively one on one, I do not do any boot camp/groups/pairs any more. I only like one on one so I only do one on one. I used to do the others. I am currently booked to the max, I'm not taking on anymore clients and I have a waiting list. Supply/demand. There is no reason why I should not be charging more. I'm in the ballpark of studios around me price wise but i'm the only gym that is straight up 1 on 1 and they have access to the entire studio. If people are willing to pay $2 then why should I continue to accept $1 type logic.

It's not a high expense vs low income problem. It's just a "how do i create even more profitability" action. My expenses inevitably increase. You sign a long term lease and your rate will go up. In order to keep the same profitability with any business that always falls back on the buyer.

As my client base has increased, my income has increased....It hasn't been much of a thought I suppose over the first three years as I continue to make more and more money. That that I'm full with a waiting list I have room to sit back and decide how to make biz more profitable.

I just don't like the "confrontation" aspect this may create. That's no fun but its a necessity.

I've never borrowed any money, I do not owe any money. Every month I've been open I've been profitable.

Awesome stuff dude and great insight. I now understand the issue you are facing.

Have you ever considered expanding your business? Hire another trainer(employee)?

Because since you are currently booked up, the only way you will ever increase your income in this model is to raise prices. What if you were to consider hiring another trainer(make sure they are as good if not better than yourself)? This would allow you to add more clients and still allow existing clients to be grandfathered in if you wanted to go down this road.

Or do you simply trust nobody else and have zero desire to hire anyone?

[Gls133]

With loyal "tenured" clients in any business. Have in person meetings with them before sending out e-mails. Your thriving business is a result of your hard work and professionalism with those "Tenured Clients" Your success is a result "also" from their money. You may lose a few of them, but you will retain your reputation if its done on a personal appreciative level.

[EdgarAllanPoe]

Awesome stuff dude and great insight. I now understand the issue you are facing.

Have you ever considered expanding your business? Hire another trainer(employee)?

Because since you are currently booked up, the only way you will ever increase your income in this model is to raise prices. What if you were to consider hiring another trainer(make sure they are as good if not better than yourself)? This would allow you to add more clients and still allow existing clients to be grandfathered in if you wanted to go down this road.

Or do you simply trust nobody else and have zero desire to hire anyone?

I've had other trainers when I first started. One worked out fine but I don't like sharing my space. I transitioned to doing exclusively one on one training where clients have my whole studio to themselves (outside of the cardio room) for their whole session. I'm the only studio around that does that. I wouldn't have it any other way. Plus it would be taking away something from current clients.

Even if I were to hire another trainer, I'd still increase rates on current clients. I'm no longer grandfathering anybody. That's not something I'm debating, was just how to soften the blow I guess. When I do something negative towards the clients I always try to think of a positive to provide them at the same time. But its like I've already given them all the positives at this point, lol.

I've considered opening up a 2nd location with a different business name as a subsidiary of my place that I would simply setup and pay for but I would need a manager as a lead trainer and that I have not found a person I would trust. I would still run my own place so I would need to trust someone else to handle the day to day.

I'm trying to groom a client of mine into becoming a trainer but thats a ways away.

I would never train with other trainers again though. I have a 1250sq ft studio.

Trainers I've had do not work as hard as me, they are not as careful with my eqpt, they are not as particular with every little detail that I am....in reality it just created more work and was not worth the additional income. One person couldn't figure out the simplest of invoices and they only had one client.

Another trainer dropped a bar into the wall creating a hole, a massage therapist broke the blinds and just left the front door uncovered over night without notifying me....so once I was done working the next day I had to take care of that even though I really did not have the time. Then its like I had to manage these people over some very obvious ****. I am very profitable now, and have virtually zero headache aside from having to deal with client tardiness or people not logging their food and me having to be "confrontational" about it. Thats really the only thing that causes me a bit of stress.

That's also a small deterrent into opening a 2nd location but if I had a manager I trusted on the day to day it would take a percentage of that frustration away.

[RamsdenF]

I've had other trainers when I first started. One worked out fine but I don't like sharing my space. I transitioned to doing exclusively one on one training where clients have my whole studio to themselves (outside of the cardio room) for their whole session. I'm the only studio around that does that. I wouldn't have it any other way. Plus it would be taking away something from current clients.

I've considered opening up a 2nd location with a different business name as a subsidiary of my place that I would simply setup and pay for but I would need a manager as a lead trainer and that I have not found a person I would trust. I would still run my own place so I would need to trust someone else to handle the day to day.

I see what you are saying now.

Ya a 2nd location is something you may want to start seriously looking into. It does take a lot of work and will need the right employee.

Maybe you are content where you are though and don't necessarily care to make more money. That's fine too. I just figured since you are raising rates, you were looking to increase profits. I see now, you are more just canceling out inflation and what not.

Trainers I've had do not work as hard as me, they are not as careful with my eqpt, they are not as particular with every little detail that I am....in reality it just created more work and was not worth the additional income. One person couldn't figure out the simplest of invoices and they only had one client.

Another trainer dropped a bar into the wall creating a hole, a massage therapist broke the blinds and just left the front door uncovered over night without notifying me....so once I was done working the next day I had to take care of that even though I really did not have the time. Then its like I had to manage these people over some very obvious ****. I am very profitable now, and have virtually zero headache aside from having to deal with client tardiness or people not logging their food and me having to be "confrontational" about it. Thats really the only thing that causes me a bit of stress.

I hear ya man.

I've just hired my first employee and it took 3 months to find her. This industry is polluted with uneducated/unqualified trainers and when someone like me or you has a reputation at stake.....there is a lot to gain and lose when hiring.

[EdgarAllanPoe]

I've decided I will increase rates the first billing cycle in August or September but notify current clients in April. I will change my rates for new clients that signup in April and beyond to those future rates.

I'm going to show the going rates at other similar studios. My rates are actually a good bit better and in some cases substantially better for 1 on 1 45 minute sessions. I believe other studios are jacking up their 1 on 1 rates on purpose to make small group/semi private more appealing financially which works in my favor as I have no desire to do small group/semi private.

My increased rates will still beat out quite a few AND i'm the ONLY studio to offer exclusivity of a single client virtually having the entire studio to themselves for the session.

Along with my rate presentation I will provide a bullet list of some of the added expenses accrued since previous rate increase
* new studio
* black friday equipment upgrades
* scheduling software
* cleaning crew
* utilities
* annual lease increase
* renewed lease sq ft increase
* eqpt maintenance being my responsibility
....etc...

some may care, some may not but it shows its not just a increase "just because"

Thanks for input, have a game plan that I like now.

I'm also removing 30 minute and 60 minute training options. So will now ONLY offer 45 minute one on one. The remaining 30/60 minute people I will also give them until the increase in Aug/Sept to make the switch. Now all clients will be on virtually the same plan, cash flow will increase, rescheduling and slot arrangement will be easier and more flexible.

[RamsdenF]

I've decided I will increase rates the first billing cycle in August or September but notify current clients in April. I will change my rates for new clients that signup in April and beyond to those future rates.

I'm going to show the going rates at other similar studios. My rates are actually a good bit better and in some cases substantially better for 1 on 1 45 minute sessions. I believe other studios are jacking up their 1 on 1 rates on purpose to make small group/semi private more appealing financially which works in my favor as I have no desire to do small group/semi private.

My increased rates will still beat out quite a few AND i'm the ONLY studio to offer exclusivity of a single client virtually having the entire studio to themselves for the session.

Along with my rate presentation I will provide a bullet list of some of the added expenses accrued since previous rate increase
* new studio
* black friday equipment upgrades
* scheduling software
* cleaning crew
* utilities
* annual lease increase
* renewed lease sq ft increase
* eqpt maintenance being my responsibility
....etc...

some may care, some may not but it shows its not just a increase "just because"

Thanks for input, have a game plan that I like now.

I'm also removing 30 minute and 60 minute training options. So will now ONLY offer 45 minute one on one. The remaining 30/60 minute people I will also give them until the increase in Aug/Sept to make the switch. Now all clients will be on virtually the same plan, cash flow will increase, rescheduling and slot arrangement will be easier and more flexible.

Nice man.

Thanks for the insight.

[2morrownvrcomes]

I've decided I will increase rates the first billing cycle in August or September but notify current clients in April. I will change my rates for new clients that signup in April and beyond to those future rates.

I'm going to show the going rates at other similar studios. My rates are actually a good bit better and in some cases substantially better for 1 on 1 45 minute sessions. I believe other studios are jacking up their 1 on 1 rates on purpose to make small group/semi private more appealing financially which works in my favor as I have no desire to do small group/semi private.

My increased rates will still beat out quite a few AND i'm the ONLY studio to offer exclusivity of a single client virtually having the entire studio to themselves for the session.

Along with my rate presentation I will provide a bullet list of some of the added expenses accrued since previous rate increase
* new studio
* black friday equipment upgrades
* scheduling software
* cleaning crew
* utilities
* annual lease increase
* renewed lease sq ft increase
* eqpt maintenance being my responsibility
....etc...

some may care, some may not but it shows its not just a increase "just because"

Thanks for input, have a game plan that I like now.

I'm also removing 30 minute and 60 minute training options. So will now ONLY offer 45 minute one on one. The remaining 30/60 minute people I will also give them until the increase in Aug/Sept to make the switch. Now all clients will be on virtually the same plan, cash flow will increase, rescheduling and slot arrangement will be easier and more flexible.

I personally wouldn't list the reasons why you are increasing your rate. Sounds passive aggressive to me. Businesses raise rates and prices all the time. That's called life.

[EdgarAllanPoe]

I personally wouldn't list the reasons why you are increasing your rate. Sounds passive aggressive to me. Businesses raise rates and prices all the time. That's called life.

My personality and communication skill set is better with email then one on one. Having the clients I do I already know I'll be asked 'why'. I can craft exactly what I want to say how I want to say it better than responding verbally when they ask me.

In the past since I've began all my communications to the group as a whole has been through email because I word things best that way.

Amazon sent an email out about a year ago taking about the increase in prime rates. Said I was grandfather in until X dates but rate would be going up due to x, y, z and we have not increased rates since blah blah date in 2010 (random date). I actually appreciated that email

May be able to Google a copy of it.

To each their own. To me I'd rather the clients have all the information and not feel put on spot if they ask me unexpectedly based on my own personality

[mstaveskie66]

@edgarallanpoe

What is the best eft software that you use? I have really been shopping around a lot lately

Best of luck with everything