Q. We have a lot of different pricing options. How many do you recommend we show a prospect at the point of sale? – Evan Anthony, the manager of The Arena MMA Gym, San Diego, Calif.
A. While it’s a good idea to have a variety of options available to your prospects and members, it’s never a good idea to show all of them at once. I recommend either a two-option presentation or a three-option presentation. There are advantages to both and whichever one you decide to go with will work well.
Two-Option Price Presentation
This is called a “choice close.” They choose either option A or option B. This keeps it very simple for the prospect because you’re not muddying the decision process with more for them to consider.
This also makes it easy for your salesperson to say, “Do you prefer option A or option B?” Option A could be a 12-month membership, and Option B could be a 24-month membership at a slightly lower monthly payment.
By presenting only two options, this allows you some wiggle room on either side. For example, if someone says they don’t want to sign up for a term, you can then present your month-to-month or shorter-term option. If someone says that the price per month is too high, you can present them with a paid-in-advance option. Although, nine times out of 10, they will simply choose one of the two options.
I like the two-option close because your prospect doesn’t need to be confused when it comes time to make a buying decision. They’re probably already overwhelmed in an uncomfortable environment, around people who are in better shape than they are. They’ll appreciate the simplicity of your price presentation and will choose one of the two options.
Three-Option Price Presentation
Even though this presentation adds one more option for them to consider, I like it because it allows you to have a solid in-between option. Perhaps you present a paid-in-advance option and a 12-month option. You can also offer an in-between option with a higher enrollment fee and lower EFT for the same 12-month term.
Industry averages show that your members will stay with your club only eight months. It doesn’t matter whether they sign a 12, 24 or even a 36-month commitment; the actual time they stay is typically much less. As long as you can manage a budget when you receive money up-front, an in-between option like this will potentially net you more over the course of the membership than the standard EFT option.
The third option in the three-option price also allows you some creativity. You lose 100 percent of the sales you don’t ask for, so why not go big? Perhaps the third option is a $300 per month option that includes four personal training sessions per month and access to Mixed Martial Arts or bootcamp classes. Or, it might be a three-payment plan that allows them to pay for the year over the next three months. Or the third option could come with the equipment necessary for them to get involved in your MMA, bootcamp, group exercise classes, etc.
There are many people who will pay the premium to get the best. Interestingly, those who don’t choose the high-price option will likely go with a middle option. Restaurants have used this strategy for decades. They always have plenty of low-price options, plenty of mid-priced options and a few really high-priced options. After viewing the high-priced option, the mid-price option doesn’t seem like such a bad deal and they opt for the middle option. However, if you are presented only the low and middle options, most will opt for the lower priced options because they seem to be a better value. You can utilize this same psychology trick in your pricing options as well with the presentation of a premium priced third option.
Whether you decide to use a two-option close or a three-option close, never offer more than three. Research shows that closing percentage decreases when prospects are offered more than three options. But always keep a few options available to present after you see how your prospect reacts to your price presentation. -CS
Curtis Mock is the host of www.fitnessbusinesstelevision.com, the TV show for fitness entrepreneurs and is the executive director of GymSuccess.com. Curtis can be reached via e-mail at Curtis@ClubSolutionsMagazine.com.
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