Fitness Business School – The Truth About Pricing

Full Transcript

Hey, Pat Rigsby here and in today’s episode, I want to talk with you about pricing and the truth that so many people don’t wanna understand. Let’s get to it.

Welcome to the fitness business school podcast. The show for fitness business owners who want to grow their income, increase their end impact and improve their lifestyle. Be sure to listen to the end of this episode, because we have a brand new special offer exclusive for listeners. So stay tuned.

About once a week, somebody asks me if they do some sort of front end offer, or if they do a free trial or free session, does that devalue their service or something like that, because they heard that along the way from somebody. And you know, my, my internal reaction usually is, well, the person that they heard that from is a fool. But, you know, because this isn’t talk radio, this isn’t something that you can answer in a sound bite. Like there’s so much more context to pricing and how you may let somebody experience what you do or whatever else than simply saying, well, a free sample of this is bad, but, you know, some paid
sample is great because there, there are so many other variables that go into this when we’re thinking about pricing front end offers or bringing people in and being congruent with what we want the long term experience to be.

Now, is it reasonable to think that if somebody pays you $500 for your front end offer, that they are financially qualified to continue paying you, you know, three, five, $700 a month moving forward? Well, there’s definitely a higher probability from that qualification standpoint, but that’s making this decision in a vacuum, right? Like that’s basically saying, okay, yes, this person has $500 available. So they’re probably in a financial position that if I asked them to pay $500, again, they would have a better chance of doing it than if somebody had never shown any money that they had available.

But there, there are other things that we have to think about here. The first would be that it is infinitely harder to generate paid leads than it is to generate unpaid leads. Because you know, you have to spend time or money to get somebody to pay you in order for you to demonstrate that you can help. And
sometimes it’s just easier to just demonstrate you can help. Now, demonstration doesn’t always have to come in the, like, in the same exact context by which you will provide a service. You may be able to demonstrate that you are an expert in a public speaking environment where the person hosting the event, the person moderating the event, whatever else gives you the platform. So they’re endorsing you, there’s social proof, then you get to be in front of a crowd in a position that
usually is associated with some sort of status, and now you get to demonstrate that you can help. So now the next step for somebody may be a paid offer. Well, that’s because a lot of things happened for free on the front end in many cases, or you had to put in a lot of legwork on the front end. If you run
paid ads to a free offer, you typically are gonna have a much higher cost per lead for paid ads to a paid and especially an expensive offer than you would if you simply generated leads for people who were earlier on in their buying journey.

So when we think about this there, there’s no perfect correlation because there’s this assumption that everything that you’re doing on this front end is equal and
it’s just, Hey, I’m making an offer that’s free or paid or a $1 trial or something else. And the work and the expense for you to get people into that pipeline are all equal, they’re not remotely close to equal. So the way that it’s probably wise to think about this is if you are going to ask somebody to make a
meaningful investment with you, they need to have confidence, they need to have a great deal of confidence that you can provide what they’re looking for. You can help them achieve their desires, pursue their goals, solve their problems. Now we can do that over time through having a track record,
right? Like if you have a wonderful track record and there’s so much social proof, like somebody goes to Cressey Sports Performance, they don’t need to do some really low cost front end offer or free trial or whatever else, because there is a mountain of evidence that they are wonderful at what they do and
they have this incredibly powerful track record that gives you the confidence that you’re making a sound decision.

Now, if you are not somebody that has that kind of evidence, that kind of history, that kind of track record, that kind of status in your market, then we have to do more demonstration to believe or to get people to believe that they can get the outcome they’re looking for by working with us. Now, you may
think, well, I don’t want to do this free thing because that doesn’t qualify people by price. But the the reality is it’s harder to get somebody’s attention in time than it is to get their money in many cases or at least a significant enough amount of their attention in time. Sure, you can get them to watch, you know,
your YouTube short or something for a matter of seconds. But to actually get them to walk through the door and spend time with you and get out of their comfort zone and get into an uncomfortable environment where they have, you know, internal fears or concerns about embarrassment or about
failure or whatever else, well, the idea that somebody would not see any value in what you offer simply because you let them try it out for you know, not much of any financial expense. It’s kind of silly, right? You know, like three years ago we bought a different house, bought a new house, and shockingly enough they let us come walk through the house before we ever were asked to make an offer. And, you know, we made offers on like three houses and we looked in like
12 houses and every one of them let us walk through the door and look around. And if you were to buy a car, most everybody would let you test drive that car. Or if it was an ordered car, they would let you test drive something that was similar, right?

Because they understand that this is a significant ask on their part. This is a significant commitment on your part. This is something that’s gonna play a
meaningful role in your life and probably cost a meaningful amount of money. So, you know, the person at the car dealership isn’t saying, well, you know what? You need to pay us the equivalent of one month’s loan payment to be able to go and test drive this car. No, they’re going to say, okay, this person wants this. They have enough desire that they’ve come to experience this, and we are going to take them through some experiential thing to demonstrate how this may be a
good fit for them. Plus we’re gonna get them past that initial hurdle, right? And in that case, a lot of times it’s kinda like when they say, Hey, take the puppy home with you and you can have it at your house for a little bit or something. So you become emotionally attached to it. It, well, you drive the car
and you become emotionally attached to it because it’s nicer than driving your current car or something like that.

Well, here, once you’ve experienced something in training, well, you’re past that initial fear and concern and worry. So there, you know, there’s a lot that that goes into this that you just can’t summarize in a sentence. And so it, it kind of gets under my skin a little bit when people act as if this is talk radio and
they’re living off sound bites and they make these broad generalizations and don’t have context when it comes to things like pricing, when it comes to things like, Hey, should I run this front end offer? Should I run that front end offer? The bottom line is what we need to do is give the person confidence that we
can help and that they’re making a good decision. Because nobody wants to feel foolish. Nobody wants to feel you know, embarrassed. Nobody wants to feel like a failure. And so we need to alleviate or at least mitigate those emotions whenever we’re asking somebody to join us. Now, there, there are so many different ways to do this with guarantees. You know, you can do money back guarantees, you can do love it or leave it, or Hey, this is the right fit guarantee, and if it’s not
for you, even if you’ve paid we’ll, give your money back or something like that. You can do short term programs. Like so often in our industry, we fall in love with this idea that somebody has to make a commitment. Well, yeah, they need to stick with something for a meaningful amount of time at a
meaningful level if they wanna get a result. But that doesn’t mean we are the right person to make a commitment too. They need some sort of evidence or belief that we are, and it’s up to us to help demonstrate that in some way or in all likelihood in several ways to get that or earn that commitment.
So I know this isn’t the same thing as talking pricing. Well, hey, do you need to end your price in zeros or sevens or nines or what’s the right price for group training or semi-private training? Well, that stuff varies by market, right? Like the, the right price in Louisville, Kentucky is not necessarily the right price in
Manhattan or Los Angeles or something like that. You know, you have to price based on expenses and making sure that your profitable, but what doesn’t really change is the fact that people want to make a good decision when they’re buying. They wanna find something that can help them achieve whatever it
is they’re seeking out to exchange their money to receive. And you need to find ways to create that confidence and to demonstrate that you can help and to you know, alleviate all those emotional concerns that somebody has.

And sometimes it’s just simpler to make it easy for somebody to actually experience what you do, especially if what you do in your four walls is unique and it’s really a positive experience and you feel like, Hey, this is the best way for me to demonstrate this. Well then get them in the door and
demonstrate it. Don’t hide the price. Now, I think that’s another important thing. If you are expensive, even letting somebody test drive something doesn’t mean that you should ever be evasive about the price. Like you want people to test drive it knowing they’re going to have to make a decision whether or
not to invest the amount of money you’re asking. But, you know, I think so many people would be better off if they focused on how many prospects can I get through the door? Not how can I create a million different walls to keep people from getting in the door, but how many prospects can I actually
get in the door to experience what we have to offer? And if you get more people in the door, you’re gonna be able to convince those ones who are kind of in
the middle. They may not be what, what a salesperson might call a laydown. They may not be somebody who’s already made the decision to buy, but there are a lot of people in the middle who are, you know, potential prospects, but they need to understand that this is the right fit and a good value for them, and
it’s gonna help them get to where they want to go. And if you get those people in the door and demonstrate how you can help, you’re gonna be so much better off. So when it comes to pricing, especially initial offers, front end offers, you know, ways for people to be introduced to what you can do, don’t feel like there’s only one solution.

Now, sometimes the simple solution is just to say, I’m going to sell that initial experience at a prorated version of whatever my normal experience is, but I’m gonna offer a love it or leave it or perfect fit or money back guarantee so they feel like their risk is mitigated. So that that may be a great place to start. But if you’re not getting enough people through the door with that type of offer, then we maybe need to be more creative. We maybe need to find other ways to get
people in and experience what we have to, to provide and how we can help. Because the more people that you help, the more people you get in the the door, the more people that you serve, invariably the more people you’re going to get to become clients. And that may not seem completely true, but if you
are somebody who has been getting maybe two new clients a month, three new clients a month in a small group or semi-private type of business, and you would like to get more than that, make it a goal next month to say, okay, I’m going to get four new people to experience what we do each and every
week.

Doesn’t matter how I get them in the door, that can be a friend of a friend, that can be somebody I met through a networking event. I’m just gonna invite them in to experience what we do. I am willing to bet, to be honest, I’d be willing to bet a pretty significant amount of money that you’re gonna get more
than two or three people to say yes. Now, are you gonna get all of them? No, but guess what? You don’t get to make a bank deposit with a closing percentage. You get to make a bank deposit with what people pay you to help them achieve their goals. And so five out of, at least in my books, five out of 16 is still
better than three out of three because that’s what dictates the health of your business. Not your closing percentage, not the percentage of people that move from one stage of a pipeline to the next, but the number of people who come through your door and pay you to help them achieve their goals and solve
their problems. So kind of a diatribe about pricing and the way that we approach it. Hopefully that helps. Hopefully that gives you at least a different way to think about things and understand that if you’re good at what you do, getting people to experience it is a tool that you need to make the most of.

Thanks for listening to this episode of The Fitness Business School.

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