Finding the worth of something isn’t the easiest task. However, at your Box, determining prices is a must.
CrossFit Notorious’ co-owner, Shane Griffith, said there is a lot that goes into setting pricing — from regional factors to influencing buying behaviors. In order to figure out the costs and prices for his Box, Griffith starts with comparing average costs versus revenue per session.
“Costs are the easiest to estimate. The other numbers take some guessing based on your region and what you estimate other Boxes to be doing,” he said. “Ask around and error on the low side for things, like average per member revenue and attendance.”
Griffith gave an example: Say monthly costs of your Box are $10,000. Your average per-member monthly revenue is $150 with 100 members, and the average attendance per member is 12 sessions a month.
By attempting a couple of equations, you can determine two factors:
Following these equations and the example pricing above, the cost per session is $8.33 and the revenue is $12.50. Griffith explained he then uses these numbers to determine everything from punch-card and drop-in prices to his membership packages. However, finding a balance between the prices is key.
If, in your membership package, the cost per session is $12.50, but in your punch-card and drop-ins the price per session is $15, that does not leave much room to encourage people to buy a monthly membership, he said. The fact is that the difference between these two price options is minuscule.
Griffith explained by increasing the $15 per class to $20 per class, a member would then be buying 10 classes for $180 in punch-card or drop-in form, which is the same price as a monthly, unlimited membership. The idea is to get members purchasing more long-term commitments. “If you increase that to $20, then it can create the buying behavior desired, and then the attendance behavior, and then the athlete results,” he explained.
In terms of overall pricing advice, Griffith gave some tips:
By implementing the advice and tips at his own Box, Griffith said he has seen positive side effects. “The buying behavior has shifted to the longer term commitments resulting in more members that are committed to plans, and our attendance levels are consistently on the rise as is the overall membership and health of the business,” he said.