Rate increases seem like a negative to members, but the secret is to make them transparent, emphasizing the improvements you are going to make as a result.
At Newtown Athletic Club we impose a small rate increase annually. In 2013, however, when we completed our $16 million Big Build Expansion, we imposed a rate increase ranging from 5 to 30 percent, depending on the membership type. Here’s how we positioned it:
We sent out a membership survey, which indicated our members were 85 percent in favor of the expansion. This gave us the buy in from the beginning that became very important later on in the process.
The fact that there would be a rate increase was announced at the beginning of the two-year expansion project (transparency).
We embarked on an aggressive educational campaign to help our members understand that the rate increase was not “paying” for the expansion, but rather necessary to manage the business operationally.
We invited them to help us grow the membership to spread any increased costs. A carefully crafted membership referral campaign offered monetary rewards and recognition through social media and signage.
About three months prior to completion we announced the exact amount of the increase. During this period we allowed members to terminate if they so desired. Few members did so, as most folks wanted to stay for the completed project.
We did not impose the rate increase until the expansion was fully complete. This worked well, because the “wow” factor came into play. Our tagline for the entire two years was “not just a club … a lifestyle.” We were driving the point home that the club underwent a paradigm shift and became a brand-new product.
Our messaging was successful and the new services and facilities created the value proposition that supported the increase.
