Is Undercharging Killing Your Fitness Business?

There is one mistake that a number of businesses (especially fitness businesses) make that can be painful to watch.

The business is going under or is broke because they are undercharging for their products and services – which can take many forms such as charging too little, poor packaging, and incorrectly structured margins to name a few.

All of these lead to slim or zero profit for the business.

For those who work hard but finish the month with less money in the bank than they started with, then this is an area needing your immediate attention.

Two questions to consider:

  • How do you know if you are currently undercharging?
  • How do you ‘re-calibrate’ and make changes once you have identified them to ensure your continued success?


  • The most important component of your business success.
  • Pricing is the first step in becoming profitable and achieving financial freedom.
  • If you do not get it right, it is impossible to have much of either.
  • Do not keep scraping by every month or discounting your services.
  • If you value yourself, your business, and serving your clients, you must charge what you are worth.
  • Once you get your pricing and packaging right, you can transition to bigger sales, delivering what your clients need, and growing a profitable (fitness) business.

Two Major Pricing and Packaging Mistakes

  1. Your client does not commit to the length of time required to hit their goals.
    1. It is very likely that a small number of training sessions (e.g. 5 or 10 sessions) will not facilitate your clients to achieve their goals.
    2. As a fitness professional, it is your responsibility to recommend a realistic and achievable training programme to your client so they can attain those goals.
    3. Your clients will be much more committed to achieving their goals if they invest in a long-term training programme.
  2. You have to constantly resell your services.
    1. Many fitness professionals get a buzz when they sell a short-term (e.g. 5 or 10 session) training programme.
    2. However, when these sessions are finished, you will have to sit down with the client and sell them (again) on more products/services.
    3. This is not an effective or efficient use of time (you are spending time selling a product/service rather than delivering a product/service) and reduces the value proposition (discussed later).
    4. The more clients you get, the more time you will spend chasing them, tracking them, and reselling them.
    5. Further, it may not be easy for a client to maintain that initial enthusiasm that comes after first signing up.
    6. After a couple months, fitness may become less glamorous … and more about consistently doing the work.
    7. That may be more difficult to sell.

Restructure Your Programmes to Stop Selling a Set Number of Sessions

  • For optimal results, both you and your clients are best served by creating packages that are tied to solving the prospect’s problem and achieving their goals in a specific time frame.
  • This is critical because it also helps give your business predictable cash flow.
  • You also deliver what your clients need to achieve their goals – which is the whole point of your service!
  • You will need to decide on whether you are going to offer a rolling contract or a term contract (e.g. a 3-, 6- or 12-month commitment). In the current UK economic climate most are offering rolling or 3-month commitments – although some are still selling 6, 12, and 18-month packages.

How Did You Get Here?

Before developing a strategy to fix your pricing, you need to discern how and why you created your current pricing. For example, your current pricing model may be based on:

  1. What you have seen your competition charging;
  2. What you have always charged (you may have clients on legacy billing plans); or
  3. You have got no idea how you came up with your current rates (i.e. you just picked a number that sounded right!).

None of these are good financial strategies for your business, especially if you are struggling.

Stop Discounting Your Prices

  1. Many fitness professionals and business owners resort to discounting their rates in a race to the bottom of the market.
  2. Our competitors are charging £19.99 per month so we will charge £15.99 per month.
  3. Generally, there is no profit in a race to the bottom.
  4. Discounting should be a short-term measure to achieve a specific business objective – for example the January sales – and not an enduring measure.
  5. Correct pricing is one of the elements in becoming profitable and having financial freedom.

Know Your Margins

  • Margin equals profitability.
  • It is the difference between what a client pays you for training and what you pay a fitness professional to fulfill that service.
  • It is expressed as a percentage using this equation:

Revenue – Fitness Professional Pay/Revenue.

What is a Good Margin?

  • If your private training sessions are priced at £75 per hour, and you set the coaching pay at £25 per hour, the margin would be 67%.
  • That is a good margin.
  • There are margin guidelines for each type of training but, for now, just know that for private training your margins need to be over 60%.
  • It can be difficult to make a sustainable fitness business with a smaller margin than this.

We Do Not Have Any Fitness Professionals On The Books Yet?

  • You still need to calculate your margins even if you do not have anyone working for you yet!
  • Unless you plan to be a one-person show forever, you must hire employees/contractors to continue growing at some point.
  • Plan and set your pricing from the beginning so that when you do hire, you do not have to change the entire business model.
  • Use an educated guess of what you are going to pay them – what is the industry norm?

How To Fix Bad Margins

  • If your margins are below where they should be, you can either decrease pay or increase your session rate.
  • Those are the two variables you can play with.
  • Fixing your margins facilitates business success – so ensure your margins are ‘fit for purpose’

Nail Down Your Business Model

  • Your business model will play a big role in your pricing strategy.
  • You must match your price point and service offerings to the clients you wish to serve.
  • Get this right and you will set yourself up for success.
  • Get this wrong and it will be difficult to make the economics of the business work.

The Right Value Mindset

  • If you think your clients/the market would never pay the rate that will give you healthy margins, you need to change your mindset on value.
  • Maybe you assume that you know what the market will pay based on your own views and experiences.
  • But there is a major element you have to overcome if you want to succeed …

You Are Not Your Client!

  • It does not matter what you would pay.
  • You are a fitness professional so you know how to achieve your health and fitness goals.
  • Therefore, the value you associate with paying money for that type of service is not there.
  • A prospect is coming to you looking for a solution to their problem or a path to achieve their goals.

Am I Really Worth That Much!

  • Why will some people pay a few pounds more for a cup of coffee from a trendy coffee shop instead of a cheap cup you can buy from a petrol station?
  • While there is a difference in the quality of coffee in each cup, the true difference is in the value.
  • Just because you would or would not pay for a ‘trendy’ coffee does not mean that other people share that same value system.
  • The same thing is true when it comes to your services!

What Do People Really Pay For?

They are not paying for you or your time – so, what are really paying for? Your qualifications, location, equipment, brand, or brilliant marketing? These might have some impact, but people are really paying for value – the value they can gain from your products and services.

The Value Equation

  • How can you quantify and define value in a service business?
  • There are a number of different ways to determine this, but here is just one:

Value = CE + R + R

  • Client experience plus relationships plus the results you deliver.
  • Ultimately, your prospects and clients are the ones who determine your value proposition.

The Value Proposition

  • When you are delivering more value than customers expect for their investment then you have a great value proposition – and this is important in sales.
  • Focus on delivering value and price becomes (somewhat) irrelevant.
  • Serve your clients so they enjoy (love even) doing business with you and that they could not possibly imagine going anywhere else!

How to Fix Your Rates (and Your Margins!)

  • If you have not been charging what you are worth and your pricing for your services is incredibly low, you have to raise your rates in order to grow a sustainable fitness business.
  • Remember, you are selling on value, not price.
  • If you do not feel like you are providing that value yet, then give more first.


  • Do not compete on price or race to the bottom – compete on value.
  • Understand that margin equals profitability, and profits will give you the freedom (and funding!) to take your fitness business to the next level.
  • When you focus on delivering value, price becomes irrelevant, your clients will love doing business with you, and you will start overtaking the competition.
  • Once you get your pricing and packaging right, you will start closing big sales, delivering what your clients need, and growing a profitable fitness business.

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