Navigating Membership Price Increases
Adam Healy, the general manager of Waverley Oaks Athletic Club, shares how to best communicate and navigate membership price increases.
The rate of U.S. inflation leaped to a 40-year high of 8.5% in March 2022 and caused a domino effect of price increases across the country. With supply prices rising, lower revenue coming in due to canceled and frozen memberships, and the hiring shortage, many gyms are feeling the pressure to increase their membership dues.
Adam Healy, the general manager of Waverley Oaks Athletic Club, said they traditionally assess their membership rates at the start of the year. The last increase they implemented was in March of 2019 and they had planned on a small increase for March of 2020, but then COVID-19 hit and the increase was delayed until March 2022.
“For the first time we had to assess each of our services included in membership and decide if there needed to be separation of services into a more premium level of membership,” explained Healy. “With the demand on our pool post-COVID and the increased operational expenses, we came to the decision to require an additional monthly add-on fee for members to be allowed to reserve pool lane time. We felt this was the best way to do a moderate — and justified — rate increase for our wellness membership and do a more significant increase in rates for those who choose the premium membership that includes the pool.”
Before making the increase, Healy added they did a thorough market analysis. They continue to feel their membership rates have tremendous value for the services provided in relation to what other options their members have for exercise and wellness in their community.
However, as a gym owner you know members are not always receptive of change — especially when it comes to their money.
So, in order to communicate the price increases, Healy said they use a multi-faceted approach. “We start with email communications that are segmented and targeted to specific groups of members to give them the exact details they need to make a decision on the best way to proceed given the membership changes,” he explained. “For those who are not able to be informed via email, we set check-in alerts on their screens to see Member Services for updated membership information, and we also provide printed copies of that information that can be distributed by our reception desk team when needed.”
For the most part, Healy said Waverly Oaks members have been supportive of the rise in rates and have been understanding of the increased operational costs associated with running the type of club they expect. However, some resistance has been met.
“There is always push back on rate increases,” said Healy. “We don’t expect members to like paying more for the services they have been getting for less fees. Our hope — and explanation to them — is they still feel enough value for the new fees to continue their membership with us.”
To limit the amount of pushback you will receive when raising your prices, make sure your entire staff is up to speed on the changes well in advance of notifying members. Healy said you need to ensure everyone on the team can address rate increase questions at whatever level you would like them to. If members get a sense the club is not unified in making this decision, then everything related to the rate increase gets that much more difficult.
While implementing membership price increases is a challenging process, in today’s climate not raising your membership fees could cost you. If you decide to go this route, Healy offered one last piece of advice.
“Be transparent, honest and appreciative of your members because in the end they have all the power to decide if they continue as your customer,” said Healy.