Price Your CrossFit Box for Business Success

Pricing your CrossFit membership can be quite confusing. After all, you’re pricing your services way higher than the big box gym down the road for what many people consider to be a similar service. In these times of staggering inflation, wouldn’t it make sense to lower your prices to be more on par with what those gyms are charging? Or does it make better long term sense to maintain a premium price point and market the immense added value that you’re offering over a big box gym? 

In this article, we’ll lay out a plan to determine the ideal pricing for your Crossfit gym to bring success, as well as offering a ton of advice and tips from in the trenches that will help set you up for long-term profitability. 

Here’s what we’ll cover:

• Reverse engineering your pricing
• Pricing options
• Average CrossFit Box prices across the United States
• Don’t make excuses for your pricing: educate
• Encourage long term membership
• Have an irresistible introductory offer
• Two key lessons that CrossFit has taught us
• Three vital pricing metrics
• Four competitive CrossFit pricing secrets
• Five key CrossFit pricing tips

Let’s begin with the mechanics of setting your price point. 

Reverse Engineer Your Pricing

When it comes to determining what prices to charge your clients, you should work backwards to reverse engineer those figures. First, determine how much you need to cover your expenses. Next  figure out your desired profit percentage, add it to your total and divide by your target membership.This will give you a good guide to how much you should be charging.

Lets’ step through an example.

As a CrossFit affiliate, you will be paying fees of $3000 per annum. You will also need to spend $1000 per trainer for Crossfit level One Certification. 

Let’s say you plan to have 150 clients. Plan for a ten square meter space for every budgeted member. You should expect to pay around $1500 per month for the building lease. You’ll also need to budget quality rubber flooring, lighting, floor to ceiling mirrors, a reception area, a staff area, toilets and a shower. Budget $20,000 for these expenses.

Gym equipment costs will be in the vicinity of $20,000. Insurance will add another $2000 per year. To service your 150 clients you’ll need three trainers. Plan to pay each of them $3000 per month. Of course, you will also be paying yourself a wage, of let’s say, $5000 per month. 

You should also budget $2000 for a website and another $500 per month for marketing. Add in $1000 per month for cleaning expenses and incidentals. 

If we total those figures, we get first year costs of $241,000.

Now let’s say that we want to make a 15% profit margin. That comes to $36,150. Let’s add that to our total to get $277,150.

We now have a revenue goal – to make a 15 percent profit we need to bring in $277,150 in the first year. In the ensuing years, your profit percentage will increase because your set up costs will not be factored in.

Let’s now plug in our membership goal of 150 clients. 

$277,150 divided by 150 equals $1,847.66.

So, each client needs to generate $1,847.66 per year. I strongly recommend that you bill your members fortnightly, as this will equate to 13 monthly billing cycles rather than 12. 

However, for marketing purposes you should divide by 12 months, this will, in essence, provide you with a bonus month each year for free (more on this later). 

$1,847.66 divided by 12 equals $153.98

That is actually a little lower than the average. This happens to be identical to the average rate charged by CrossFit boxes in the United States, as we’ll see in the next section. 

Pricing Options

CrossFit Boxes typically offer the following types of membership:

• Unlimited
• 3 days per week
• 4 days per week
• 5 days per week
• Families and couples
• Open gym
• Weightlifting
• Personal Training
• Virtual training

I recommend using no more than three or four of these pricing methods as you need to in order to provide a range of options to your members without overwhelming them with choices. When tough times hit, such as skyrocketing inflation, you can introduce more flexible options to meet the needs of your more price conscious clients (more on this in a later section). 

Average CrossFit Box Prices  in the United States

The majority of CrossFit Boxes in the United States have both unlimited and limited memberships. An unlimited membership allows the client to come as often as they wish, while the limited option will specify the maximum number of weekly visits – usually between three and five.

The average monthly unlimited membership cost is $186.00.

Prices vary by area, with those in the midwest averaging $140, while those on the east and west coast average $250. 

The average price for a three session per week limit is $154.00.

Again prices vary by area, with the average in the midwest being $96 and $220 in New York and Los Angeles.

Many CrossFit affiliates offer one on one personal training. The average cost for this service is $75 per hour. 

The average cost of a one-off session is $20, with the range being from $17 to $30.

Here are the average costs of other membership options in the United States:

M/ship type	Average price
2 days/week	$66.51
4 days/week	$133.52
Couple unlimited	$194.89
Family unlimited	$222.50
Weightlifting	$115.00

This research has been compiled from raw data which can be found here. 

Don’t Make Excuses For Your Pricing: Educate

As a CrossFit affiliate you never want to get into the mindset of making excuses for the higher prices you are charging. That is a point that we will keep coming back to in this article. Rather than justifying your price, flip the script and promote your value. By doing that, you will be able to show the potential client that the money you’re charging actually represents very good value for money.

So, how do you educate people about your value? Here are five points that should come across in your marketing and sales pitch.

Smaller Classes

CrossFit boxes generally have 90 percent fewer members than general fitness gyms. As a result, clients are going to find themselves in a more personalized, intimate, caring environment.  Classes will have a range of levels, with the more experienced members embracing and motivating newcomers. 

Personal Attention

A CrossFit coach will quickly get to know the client’s fitness level, and assess what they need to work on to improve. He’ll provide scaling options so that each person can find success while still being challenged at their level. 

Certified Coaches

CrossFit involves a combination of weightlifting, gymnastics, strength functional fitness, agility and mobility. A professional coach has the knowledge and experience to guide clients through each of these skills. He’ll be right alongside them, correcting form inconsistencies that would otherwise go unnoticed.

Versatility and Uncertainty

Humans thrive off of versatility, variety and challenge. When you turn up at a CrossFit Box, you will be presented with a new and different WOD every day. That provides the elements of versatility and variety that we all love as the challenge of not knowing what’s coming. That keeps us on edge and fuels the adrenaline that ensures a killer workout. 

Different Types of Classes

Many CrossFit Boxes offer a range of class options, including weightlifting, yoga, functional fitness, agility, mobility and, of course, the core WOD. Clients get to select which class type to partake in, allowing them to develop skill across a range of fitness modalities.

Atmosphere

The camaraderie, sense of community and mutual encouragement that people experience at a CrossFit box is unlike anything else. Sell that feature in your marketing.

Encourage Long Term Membership

Your goal is to bring in clients that will stick with you for the long term. So, the greater the financial commitment the member makes at the outset the better. You need to make it easy for the client to choose a long-term membership by providing an appropriate discount.

Here’s an example of how you might structure your membership plan.

• Monthly membership payment – $185 per month
• Six monthly membership payment – $165 per month
• Twelve monthly membership payment – $145 per month

Have an Irresistible Introductory Offer

Just because you are targeting high income, motivated clients who can afford your membership rates, doesn’t mean that you don’t have to entice them into your Box. You aren’t competing with the gym down the road, but you are competing with the other CrossFit affiliates in your region. 

To get your target audience to choose you over the competition, you need to have an irresistible introductory offer. I recommend offering 3 free classes. Plenty of boxes offer the first session for free, but that is not enough to get a real flavor of what you can offer. After the third session, the prospective client has started a pattern that they are able to build into their life. Have a proviso that the free sessions be used within  a certain time frame to promote the habit effect.

Over those three free sessions, you need to be delivering an exceptional level of personal service.

Market your irresistible introductory offer through the following social media marketing tools:

• Google Adwords
• Facebook Ads
• Instagram
• LinkedIn
• Landing Pages

When visitors click on your link, prompt them to provide their email address. In return they will receive their free 3-session pass. Of course they will also be entered onto your email list for follow up marketing. 

Two Key Lessons That CrossFit Has Taught Us

In some ways the huge success of CrossFit Boxes around the world have defied logic. After all, they charge anywhere from three to ten times more than the big box gym down the round for what, to the undeucated public, is pretty much the same thing – a place to get in shape. Yet, rather than stifling growth, this pricing strategy has seen a membership explosion all over the world. 

So, what accounts for this apparent anomaly?

Well, there are a couple of key lessons that any new or existing CrossFit affiliate needs to embrace:

1. Target Market

Not everyone can afford a crossfit membership. So, taking a shotgun approach to your marketing is not going to work. You want clients who can afford your membership rate as an ongoing expense. Those people need to be not only financially able to do so but they will also be people who are committed to the fitness lifestyle.

Your marketing efforts need to be targeted to high income people who are committed to exercise and healthy living. There are plenty of them in your community and, with targeted social media marketing, you are able to laser focus on them in your marketing. When you market to the right crowd, you won’t be having to market on price. Instead you can put the focus on value. Your pricing strategy will, as a result, be designed to appeal to your ideal client.

2. Maximize Value and Charge More Money

There is a world of difference between what happens at a CrossFit Box and a general fitness gym. In the latter case, gyms often become little more than impersonal fitness factories, where members are simply leasing space. Members are essentially left to their own devices and, as result, end up doing all manner of ineffective and unsafe exercises that are not actually helping them achieve their goals. 

These gyms operate on turn over and have no real incentive to help members achieve success. In fact, if they can get a member to sign up for six months and then quit after six weeks, they are laughing all the way to the bank. 

CrossFit Boxes need to flip this scenario. Smaller membership allows them to provide a very high level of personal attention to their members. The instructor gets personally invested in helping each client achieve his or her goals and walk away from every WOD feeling great about themselves. 

Successful CrossFit Boxes are also more than just places to sweat. They are fitness community hubs where like-minded fitness enthusiasts gather together in a community of joint empowerment. The Box encourages clients to enter challenges and competitions, they host social gatherings and provide seminars and nutrition guidance. Often clients are not expecting this level of enhanced service. When they discover them, their desire to hang around becomes that much stronger. 

Three Vital Pricing Metrics

As a CrossFit affiliate there are plenty of data points that you need to be tracking. But, when it comes to the fiscal fitness of your business, there are three that stand out:

1. ARM

ARM stands for average revenue per member. Do not be afraid to charge what your service is worth. If you and your staff are operating on all cylinders, you will be delivering huge value to your members every month. You, and your clients will be better off when you’re charging 113 people $200 per month than when you’ve got 150 clients each paying $150. 

2. LEG

LEG, or Length of Engagement is tied up with your rate of attrition. A CrossFit Box is not like a gym which is constantly trying to pull in new members. You should have an optimum operating capacity. That will obviously depend on the size of your facility and your staff numbers. The average Crossfit affiliate has 150 members. That is about 10 percent of what the average gym has. 

The financial success of your business will be directly related to your ability to keep each client engaged and enthused. In turn, the client’s goal achievement will depend upon their ability to stay on track with their workouts and diet. 

Staying on top of your LEG will allow you to identify systemic problems that may be causing client leakage. 

3. Profit Margin

Rather than focusing on your monthly revenue, keep your focus on your profit margin. You can be seemingly ticking over beautifully with full classes, sparkling equipment and a swish website while still hemorrhaging money. If you’re focused on the shiny object rather than the bottom line, you won’t be in business for very long. 

Bottom line: Your gross revenue means nothing if it’s all being eaten up in expenses. 

Four Competitive CrossFit Pricing Secrets

1. Underpricing Can Harm You In the Long Run

If you base your pricing strategy on being lower than the competition, you are likely to establish a budget brand reputation. The problem is that there is a general connotation with the word budget that encompasses both price and service. So, your facility can be perceived as providing questionable service regardless of the actual level of service being provided. 

There is a difference between being competitively priced and being underpriced. A problem Boxes that underprice from the very outset or that lower their prices as a result of competitor pricing is that the overheads are not going to go down. As a result, there is more pressure to increase your sales volume resulting in a more crowded, less intimate training environment.

2. Lower Your Prices the Right Way

While I do nor advocate permanently lowering your prices, you can and should make use of price drops during promotions and special offers. You can also run a special rate for members who only come during certain hours. For example, you might have a special rate for seniors who have their sessions at between 1:00 pm and 4:00 pm Monday through Friday. This will allow you to satisfy the need of the price sensitive client without affecting your brand image.

3. Bill Fortnightly

Rather than setting up auto payments with your members on a monthly basis, bill them every two weeks. The first benefit is that they are seeing a lower amount coming out of their account. The second, and more meaningful, benefit is that when you bill monthly you are getting 12 full billing cycles in a year, but, when you bill fortnightly, you are going to get 13 billing cycles. 

So, if you are charging your members $150 per month and you’ve got 150 members, this simple switch from monthly to fortnightly billing will bring in you an extra $22,500 per year – for no extra effort whatsoever!

4. Reframe Your Membership Fees

Even though we all know that, in real terms, it is the same thing, there is a wealth of evidence proving that people are more likely to buy a service priced at $149.99 than $150. So, if you aren’t already doing it, always charge a penny less to take advantage of that psychological inclination. 

Another psychological tip is to not include the $ sign when pricing. Interesting research out of Cornell University shows that when retailers omit the $ sign, people are more likely to spend more money. According to the researchers, the iconic $ symbol triggers a pain response in the brain that leads to reflexive tightening of the wallet. 

Five Key Crossfit Pricing Tips

1. Compete on a non price basis

Do not try to be the lowest priced CrossFit Box in town. Rather try to be the best value. That means competing on service rather than price. You may have a slightly higher price point, but, if you’re providing the value and selling the benefits and the outcomes, then you should own that space and make no excuses for the amount you are charging.

2. Price competitively

Even though you are competing on a non-price basis, you still need to price competitively. Under pricing is not an effective way to get new members. Just because you drop the price doesn’t mean you’re going to get a flood of new members – at least not ones who are going to stick around. 

3. Charge separately for extras

You can charge separately for extra services such as child care or nutritional programming. 

4. Include provision in the sales contract membership agreement for price increases. Doing so can add value when you go to sell the business as there is a provision for the new owner to raise the rates if they choose to do so. 

5. Reverse engineer your pricing. Start with a complete analysis of what it will cost to run your CrossFit box and work backward to determine your rates based on your projected annual membership. 

How to Adapt Your Crossfit Box to Inflation

The immediate knee jerk reaction to skyrocketing inflation, the likes of which we are currently experiencing on an unprecedented scale (at least in most of our lifetimes), is to increase your prices. Yet raising prices when everybody’s hurting isn’t going to win people over and will make the closing of the sale more challenging.

Another response to inflation is, ironically, to drop the rate in an attempt to meet the restricted financial resources of your clients. That’s not a policy that I’d recommend. We’ve already discussed how dropping your prices can lead to unforeseen negative consequences. Fortunately there are other options available to you.

Look for ways to segment your pricing. I’ve previously mentioned introducing a non-prime membership to fill up the Box during off-peak hours. This can be offered at 75% of the standard rate. 

You can and should also make use of special offers during tough times. Rather than a permanent price drop, you can promote a ‘Check Us Out’ deal where they pay half price for the first month. Provide them with fantastic service, hook them into the CrossFit buzz and social camaraderie and they’ll be happy to transition to your standard rate once their introductory month is up. 

While you shouldn’t increase your rates as a knee jerk reaction to increasing inflationary costs, you can do so by adding value. Look for ways to add more value to your members. This could be through a tailored nutrition program, an advanced Olympic lifting element or personalized fat loss training. Some Boxes that are charging in excess of $500 per month are even including  customized meals and stress and lifestyle consulting services as part of their packages. Price this membership option at 20% more than your standard rate and put it out there as an option. 

The key to success when you introduce a new higher priced membership option is to, pardon the expression, market the hell out of it. Promote the benefits in your emails, newsletters and with posters. Be sure to also have your trainers enthusiastically talk about the new service. 

Another general gym tendency when times get tough is to pull back on marketing and promotion. Essentially, gym management goes into retreat mode as a result of the high levels of uncertainty and increasing overhead costs. Successful operators do not have that mindset. 

So, when inflationary pressure comes on, you need to be a proactive and decisive decision maker. Rather than retreating, advance and expand into the marketplace. You may not be able to increase your marketing budget, but you certainly don’t want to cut it back. Look for creative, cost effective ways to market your business. Check out our article on how to market your CrossFit gym with 9 cost effective marketing strategies that won’t blow out your budget.

Look for ways to reduce your overheads. Analyze every aspect of the business to look at ways you can tighten things up. You may be able to buy in bulk or make a longer term commitment to get prices down. I recall an instance when, during the 2008 inflationary crisis, I was able to get a 30 percent discount on a marketing deal by booking in four campaigns over the following 12 months. 

Finally, you need to be tracking the execution of everything you are doing. You should be doing this as a matter of course, but especially during tough times. Be on top of your key performance indicators, your rate of inquiry, what your closing percentage is and your attrition rates. 

You should also know what your cost of acquisition is per member. When you are tracking these statistics, you are then able to set improvement targets. Just a small improvement in any of the KPIs can make a big improvement to your bottom line. 

Summary

In this article, we have dissected the question of how to price your Crossfit gym for business success. Here are the key take-aways:

• Reverse engineer your per member rate by working backward from your annual cost projections, being sure to pay yourself and add a 10-15 percent profit margin. 
• Never make excuses because your prices are higher than gyms – instead constantly educate about the added value you offer.
• Encourage long term membership.
• Have an irresistible introductory offer such as the first three sessions for free.
• Market specifically to higher income people who are already passionate about fitness using Facebook Ads, Google Adwords, and LinkedIn.
• Maximize value and charge more money
• Keep a close eye on your KPIs, especially your ARM, LEG and profit margin.
• Bill fortnightly.
• Reframe your membership fees.

Implement these strategies in conjunction with a smart, targeted, and consistent marketing plan and you’ll be well on your way to a fiscally strong, healthy business that will allow you to live your passion. 

Sources

1. https://ecommons.cornell.edu/handle/1813/71169