Blog 172: Health Club Marketing: Price Fixing

Price fixing is when several health clubs in the health club industry collectively establish the price for a given health club membership or health club product and/or service will be sold for and agrees to stick with it.

Over the years that I have been in the health club industry, I have come across one or two health clubs that have shared with me they and their competitors have agreed to keep their health club memberships at a certain rate. They chose to do this so they could fix or set the price for health club membership within their community.

This is a good idea theoretically, because you are made to believe, you can then command a higher price for your health club memberships, health club products and health club services. But in reality, this system doesn’t work for numerous reasons. One of the reasons is one or two health clubs within the agreed area is always going to struggle and they are normally the weakest link in the chain.

When this happens (and it will), they start to resent the other health club owners which then turns into animosity amongst friends. This is when everyone starts to loose and everyone starts doing anything they can to get business in the door.

Another thing that we have seen is when everybody has agreed to set pricing, there will be one health club that decides to go out on their own and do something different because what’s working for everyone else is not working for them. This creates animosity as well.

The best way to run a health club is to run it like any other business and that is, run it your way. It’s just like in fighting; you never ever want to fight the other person’s fight. If someone is a boxer and you are a wrestler you don’t want to stand up and box with him. You want to get him on the ground as fast as you can. The same thing goes for business; you want to run your health club in a way that’s going to be successful for you. You want to highlight your strengths and minimize your weaknesses.

Price-fixing can never work for all health clubs. It is good for the health clubs that are doing well or those that have deep pockets but for those health clubs that depend on selling new memberships daily, and do not have a waiting list (very, very few health clubs are in this position) this is a disaster waiting to happen.

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