4.2 Determining Price Points

Determine Offerings and Price Points in Your Market

Your customers want both quality and value.  When determining the program offerings and price points for your market, consider the following variables specific to your community:

• Ages In Your Market
• Economics
• Population
• Competition 
• Household Income
• Community Organizations
• Schools and Athletics
• Range of Health Club Pricing
• Community Sports Leagues and Traveling Teams

After examining these variables, you will determine your programming options and related pricing.  While most facilities offer monthly programs on a reoccurring billing (Electronic Funds Transfer or EFT) basis, there are still a few that offer session-based programming.  However, this is the exception, not the rule.  In general, offering a limited menu with a combination of both monthly and session-based programming works best. 

Consider offering the following monthly EFT programs, as these have consistently worked well in the past.  While not a one-size-fits-all approach, ensure you have specific valid circumstances for varying from these “tried and true” offerings.

• 9-Month long-term monthly program at the lowest price point
• 3-Month shorter-term monthly program at a higher price point than the long-term offering

While most monthly memberships are sold at an “unlimited” offering, some facilities may choose to offer 2x/week or 3x/week limited offering as they may have restricted usage or space in their facility. Please remember, the Parisi corporate support team is here to assist you in determining what may be the most effective pricing and offering strategy for you!

When selling monthly programs, make it your goal to sell more of the long-term options to ensure profitability.  However, you may also need to have a 1-Month option “in your back-pocket” for those clients who are wary of commitment.  While not listed as a formal alternative, it makes sense to have this option available when needed. 

If your facility is going to sell packages (either as the only option or in addition to the monthly EFT option), a good recommendation is to offer a 10-Session Package.  While some facilities have multiple package offerings, offering a single size session package is much easier to present during the sales process.

Note that a very effective PEAK offering tends to be a 3-month EFT (at a higher price point) either 2x/week or 3x/week.

Once you determine the program offerings, you will set the pricing for each alternative.  This is one of the most critical aspects to the success of your PSS.  Set prices too high and you risk driving potential customers away; set prices too low and you lose profitability.

Remember that price points are highly dependent on your market.  Simply put, determine your pricing based on what your competition offers, and your market is willing to pay.  

Strategies to remember:

• Escalated pricing for different levels of the program is important so that there is a high perceived value especially for the athletes of an older age. Consider this, how would a 17-year-old, high level athlete at the Elite Level perceive the program if he/she is paying the same as a 7-year-old Jump Start athlete? 
• The differential between the pricing of selected offerings needs to be great enough to push the customer to purchase the longest-term offering.
  • For example, a one month should be $50 more than the 3 month and the 3-month should be $50 more than the 9-month offering. We have found that $50 seems to be just the right amount to push a customer to choose a longer-term membership.
• If you choose to lower or raise your pricing, each offering MUST be adjusted the exact same amount as the others in an effort to keep the pricing strategy effective.

Team Training and Pricing

Team training can be an extremely valuable revenue source for your Parisi Speed School. However, we should always treat each team, clinic, camp, or any other large group training session as its own custom package. In other words, DO NOT create set pricing for this type of training. 

There are so many variables involved in pricing out a team. We have created a Team Training proposal sheet that we use when the time is right to sit down with a coach to determine their individual needs for their training. Utilization of this piece is essential as we need to consider all the variables that may affect the price. 

As a rule, we can assume that the average price of a large group training session such as a team (10 or more athletes) will fall between the ranges of $10-$15 per head/per session. However, there may be times that the pricing does fall outside of this range.