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Making money in the health and fitness industry is no easy task. You need to have a solid business plan, provide great customer service, and offer a quality product or service.

But even with all of those things in place, you won't be successful unless you have the right pricing strategy.

It's no secret that the health and fitness industry is booming. According to a report by IBISWorld, the industry has grown at an annual rate of 3.5% in the past five years, and it's projected to continue growing at that rate over the next five years.

As more and more people become interested in getting fit, gym owners are tasked with finding new ways to bring in members and keep them coming back for more.

One way to do this is by pricing your services strategically. In this blog post, we'll discuss some tips for setting prices that will help you achieve a positive return on investment (ROI) for your gym.

What Type Of Pricing Strategy Do Gyms Use?

It's essential to know the gym pricing strategy to better membership sales among fitness businesses.

Most gyms use a tiered membership strategy, which means you pay a certain rate for a specific number of workouts or classes.

This creates competition between consumers and often leads to other strategies such as "last-minute deals," where consumers may be offered a discount if they sign up for their service that day.

These pricing strategies are the most common in the fitness industry and have been around for decades.

If you are a consumer who has been investing in your health, why does it seem like the cost of getting healthier is increasing?

Why do consumers accept these prices as the norm when they feel that their dollar doesn't go as far as it used to?

This year, members will spend an average of $521.76 on the gym. With the average household income being $53,657, that is 1% of their annual income going towards working out.

How Can A Gym Owner Increase Their Prices?

A gym's prices will go up when a large number of people shift from wanting a finite amount of workouts for a flat price to paying per workout or when improved amenities make consumers willing to pay more for membership.

The price increase can be attributed to the increased competition with popular gyms often priced higher than less-popular options that serve similar communities.

For example, when GoodLife Fitness opened in Toronto in the late 1990s, they charged $14/month for their service, while most other gyms charged around $10/month.

This was not sustainable as most other gyms dropped their prices to $8-$12, some even dropping to $5/month.

"We've found that people decide to join a gym based on how it makes them feel," says Dan McKinnon, director of operations at GoodLife Fitness.

"From the moment you walk in and see their smiling face at the front desk, to where they lead you on tours and what they show you while you're working out, it's all part of the experience and feelings they give you that makes people join and want to stay.”

Once GoodLife Fitness realized this shift in consumer mindset, they changed their pricing strategy and facility philosophy to create a culture of health within the gym which led to them becoming one of Canada's most successful gyms.

How Can Pricing Strategies Be Used To Achieve A Positive ROI?

Firstly, you have to consider the different types of pricing strategies:

Market Penetration

When an increase in sales volume is targeted for existing markets, this strategy may develop new markets depending on the price elasticity of demand. It also requires a high market share to make this strategy cost-effective.

Market penetration is the most common strategy for gyms because it allows them to capture a larger customer base due to lower prices which are more affordable for everyone.

This strategy allows consumers to access higher-quality services without spending much money. This can be beneficial if gym owners want to drive traffic to their facility and grow customers over time.

However, this strategy can cause the brand image of the gym to decrease if members feel like they aren't getting a good deal because of the lower price.

This is why it's important for members to feel like they are receiving high-quality services when considering which gyms they want to join. Gym owners should consider making their facilities more upscale, so there is a culture of health within the gym.

This will be beneficial because it gives members the feeling they commit to something more than just an annual membership payment.

Market Skimming

This pricing strategy targets consumers who are willing to pay a premium price point because they place a higher priority on certain features.

Market skimming can also benefit gyms if they don't want to risk losing profits by giving access to members who aren't willing to pay more than $20/month.

This strategy has the potential to be less successful if gym owners are aftermarket penetration because it can hinder growth due to fewer members joining gyms. If you want to pursue this pricing strategy, you should focus on creating a luxurious environment, so members feel like they are committing to something that goes above and beyond their annual membership payment.

For gyms that want to attract high-income members, this pricing strategy may be beneficial because it allows them to stay sustainable while maintaining a high price point regardless of the demand for the service.

This strategy can also benefit gyms that don't want to risk losing customer loyalty by offering discounts.

By charging a higher price point, they can ensure membership numbers and revenue are stable.

This pricing strategy is beneficial for gyms because it gives consumers the feeling that they're getting a superior deal to their competitors.

Product Skimming

This strategy is when a company calculates that consumers are willing to pay for a product in the market, but the price needs to be increased slightly for it to have more value.

For example, Toyota wanted their luxury car brand Lexus to resonate with car buyers. Incremental features were added to make it more upscale and set a higher price.

Product Penetration

This pricing strategy is exactly the opposite of market skimming, but instead, the goal is to enter a new market with a premium product.

For example, Tesla Motors didn't just want people who wanted luxury cars already; they also wanted to impact consumers who weren't buying cars at all.

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Factors To Consider While Setting Your Gym's Price

Setting a gym's price is more of an art than a science. A company's ability to charge prices that generate positive cash flow from operating activities is, of course, fundamental to the success of any business.

Businesses must always consider what the market will bear from a demand and supply perspective when setting their price.

The key to pricing your gym's services is to make it attractive enough for the consumer to purchase, and yet at a price point, you can sustain. This means not only considering the price of other gyms in the local market but also if potential members are willing to and can afford to pay for your gym's facility and services.

Marketing campaigns among fitness brands have always been common to provide new customers with a better fitness facility and results. Here are some factors you need to consider when setting your price point.

Ultimately, the ideal price of a product or service reflects its value to consumers and the costs involved in delivering it.

When determining prices, many factors must be considered, including but not limited to the cost of goods sold, distribution expenses, promotion costs, etc.

1. Location And Demographics

People tend to pay more for a gym membership if they live close to the facilities and can access them easily.

It's also advantageous to be located in an area where plenty of other potential members are looking to join a fitness center.

2. Services And Amenities

You can offer a separate introductory rate for using facilities you deem as attractive such as cardio equipment, group fitness classes, etc.

By offering various services at discounted prices, others will prefer to join your gym because they get everything in one place, saving them additional money.

For example, some gyms offer free personal training services with the purchase of a membership, and this might be an attractive point for clients looking to supplement their workout routine.

Before setting the right price for your gym's amenities, research and analysis of your competitor's pricing strategy are recommended.

3. Contract Periods

A longer contract period will lead to a lower monthly rate. This option is most suitable for people committed to achieving their fitness goals rather than those just taking advantage of the facilities.

4. Payment Options

The monthly payment option is more expensive than pre-payment plans such as quarterly, semi-annually, and yearly payments, as you will be required to pay the full amount every month without receiving any discounts.

You can also offer membership fee waivers as an incentive for referrals from current members, which will help grow your client base.

5. Privileges And Restrictions

Some gyms offer free personal training sessions with a membership, which is an attractive point for potential clients looking to supplement their workout routine.

You can also waive the initiation fee or the enrollment fee for new members to attract more people.

Some gyms offer an upgrade option where members can get access to the gym facilities during peak hours in exchange for a higher monthly fee, which effectively offers more value to your clients without increasing your price rates.

Having incentives for weight loss, referrals, etc., can help attract new members.


It's no secret that the health and fitness industry is booming. In response, more and more people are joining gyms to get fit and healthy.

But with so many gyms to choose from, how can you make sure your gym stands out from the rest? One way is to offer competitive prices. Another thing is fitness marketing and digital marketing as it helps the fitness clubs get better publicity and pricing strategy. You can price the gym memberships by looking at your competitors.

Moreover, it's essential to know how many members you can accommodate in the gym and who are the potential customers. This blog post has discussed some pricing strategies that can help you achieve a positive ROI for your gym.

Michael Glick

Written by Michael Glick