How to Set Fees for your Health Club

Video Transcript

This is Ivan Madar on behalf of Expert Village. How you set your fees, obviously determines your income. The fees are determined by the quality of services you provide and by the demographics in your area. A lot of clubs charge initiation fees and it's always the contentious part -- how much to charge, whether to charge or not, and how to combine it with the dues. The dues should cover your operational costs. Obviously with profit. Initiation fees are generating an income; but more than anything else it is an item you ask people to commit people to your facility for a long period of time. In a private club, that's always necessary. You do not maintain a sales force there to maintain membership all the time. That is the practice that is practiced in the large fitness chains -- where they sell memberships everyday. It's similar to an assembly line. In a private club, you would like the stability of membership and the stability of staff. The stability of membership comes from a commitment. The initiation fees account for that, so when people ask what it is for, it is for your commitment that you are going to stay here. It is a matter of supply and demand. I personally avoid specials and gimmicks, because once you offer a special, no one will ever join under regular price. They will always wait for the special. So, if you are in a private club and you provide a service properly, your good management and the climate you create is your best marketing. That generates money. I have found that proper management and good referrals from members saves me tons of money in marketing of my services. I use members as my marketing and I reward members for bringing new members to the club. I have been very very successful, instead of paying outrageous fees to the television stations, radio stations, and newspapers advertising your services. Actually, I believe you are cheapening your products by doing this. Private clubs should provide a service that is appreciated that people don't mind paying. They look at value, not price.

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