With so many club owners finding themselves in a squeeze these days, some are choosing to switch to an HV/LP (high-volume/low-price) model or else radically reconsider their pricing structure. An article in the December CBI, “The Budget Brands Are Seizing Market Share,” looked at this recent trend to find out how clubs are handling this dilemma.
“A lot of middle market clubs are struggling and trying to figure out, how do I price this thing if not make a complete change in my business model?” said Bill McBride, president and CEO of Active Wellness, a club management firm, and BMC3, a consultancy, both in San Francisco. “There still is a strategic play to be in the middle, but you have to make sure that your value chain, your expense engineering, is set up to justify that.”
As the article states, a multitude of variables need to be considered in your pricing strategy: “local market conditions; membership and pricing options; the addition or limitation of certain amenities; how to deal with increased member volume; market positioning, and, perhaps, rebranding.”