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FIN: CHAPTER 1

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LESSON 1: SESSION PACKAGES VS MONTHLY BILLING

Traditionally trainers have followed the typical service industry billing system of trading money directly for hours, such as this:

Your client pays you for a package of ten 60 minute sessions at $100 per session. When you have completed these ten sessions, the client will again buy another package of ten hour long sessions with you.

Many trainers and fitness professionals are now finding great success by transitioning to a monthly billing system where clients, through an automatic funds transfer, pay a monthly fee to work with a trainer and receive a predetermined number of sessions. Both trainers and clients are finding improvements in the consistency of session attendance and in their monthly budgeting. Below I will offer some pros, cons and random thoughts on all of these systems, so that you can consider all options and select the system that works best for your needs and style.

SESSIONS AND PACKAGES

  1. Session Discounts for Large Packages
    Many corporate gyms offer cheaper training session rates when their clients purchase large packages of sessions up front. Therefore, lots of new independent trainers also do the same thing. Marketing 101 classes would definitely say this is a great help in motivating clients to buy more sessions with you for a cheaper rate, helping you with client retention as well. However, many of our veteran trainers have made the decision that their time is worth the same rate whether you purchase a single session or twenty sessions. I recommend researching what other trainers in your market are doing and then making a decision that feels right for you, your clients and your market.

  2. Expiration Dates
    Many trainers are placing expiration dates on their session and package purchases in order to improve clients consistency of training and improve the consistency of client income. Consider the ideal number of sessions you would like to see a client each week, divide this number into the total sessions bought, give your client a week or two of cushion in case life gets in the way for them, and that will give you a guesstimate for your expiration date.  For example:
    - Your client purchases a package of 20 sessions.
    - Ideally you want to see your client two times a week. (10 weeks worth of sessions)
    - Add in a couple of weeks in case your client has vacation or traveling. (12 total weeks)
    - Then a good expiration date for this package would be three months from purchase.

  3. Attendance Percentage Agreements
    One additional thought, in order to assist trainers with consistency of income and to improve client attendance for sessions, incorporating an attendance percentage requirement could prove extremely helpful, especially in respect to peak time slots (i.e. 6a-9a and 5-730p). I recommend requiring that clients who wish to hold a preset time and weekday in your normal schedule (i.e. A client that wants to reserve every Tuesday and Thursday from 7-8a), must attend and/or pay for 75% of their monthly scheduled sessions in order to continue holding that reserved spot.

MONTHLY BILLING WITH ELECTRONIC FUNDS TRANSFER (EFT)

  1. Session Allowances
    First you need to create a list of purchase options for your clients dependent on how many sessions they receive with their monthly package. Most trainers focus their packages around the idea of seeing them once, twice, or three times a week for the month. If you want your average session rate to be $125, then the following packages could work for you:

    $500/month for 4 Sessions/month (Average 1/week)

    $1000/month for 8 Session/month (Average 2/week)

    $1500/month for 12 Sessions/month (Average 3/week)

  2. Rollover Policy
    Life always gets in the way of training, it is unavoidable. Ideally, clients will reschedule any missed sessions with the same month in order to stay on track with their training. However, trainers will sometimes allow for a single session rollover into the following month, at no additional charge.

  3. Single Session Offers
    You have the option of continuing to offer single sessions to clients, or requiring that all of your clients adhere to a monthly plan. Often trainers will offer single sessions but at a much higher rate in order to guide clients into committing to a monthly plan.

  4. Sample Plans
    Check out this Business Movement Blog, New Client Payment Plans that will Upgrade Your Business, where we interviewed four veteran trainers that have successfully implemented their own versions of monthly billing.

  5. The Decoy Effect
    Whether you choose to go with a session or monthly billing plan, I recommend considering an interesting marketing class technique known as the Decoy Effect in order to lead your clients to select a specific plan.  When listing the purchase plan options for your clients, include an additional item and/or price point that is specifically listed to assist in driving clients to your ideal option. For example, if you believe that you get the best results when you work with clients twice a week, adjust the pricing for your alternative plans to place the twice weekly plan in the most favorable light. This could mean that you greatly increase the hourly rate for once a week plans, or that you have a high priced ‘unlimited’ plan that helps in making the twice a week plan pricing sound like a deal for your customer.


EXERCISE

Using the ideas presented above on session packages vs monthly billing, look back on your the Products and Services section of your business plan and make any adjustments to your purchase options for your clients. Write out a clear description and outline of the products and services available to your clients along with payment options. This list should be clear, concise, and easy to understand since it will eventually live on your website for prospective new clients to review.