Question asked by Chris Lutz 83 days ago
Does anybody charge a monthly recurring fee for personal training?
This was the best change we've ever made in our business. Even back in 2007, we had regular, reliable income with no reselling or chasing people down.
Answers (12)
3
Hello Chris,
We have "Paid In Full" or "Personal Training Contracts" similar to a Health Club Membership Contract. PT contracts are based on a certain amount of sessions purchased each month and charged automatically to the members checking acct. or credit card until the contract is fulfilled.
Sincerley,
Michael
We have "Paid In Full" or "Personal Training Contracts" similar to a Health Club Membership Contract. PT contracts are based on a certain amount of sessions purchased each month and charged automatically to the members checking acct. or credit card until the contract is fulfilled.
Sincerley,
Michael
2
Hi Chris,
At my gym, we do offer either "pay in full" package (5, 10, or 20 sessions) or the optional "financing" PT package. The "pay in full" is just that, the member has to pay for the full amount of PT sessions up front...which is expensive to most. With this option, they can use the sessions whenever they like. The other "financing" type of package, does give the member the option to choose however many sessions they would like to attend (5, 10, 20) and then break it down even further into sessions they want to dedicate themselves to on a weekly basis (1, 2, 3, 4, 5). Each week, the member is then automatically charged based on the amount of weekly sessions they committed to whether they attend the session or not. I designed software for my billing company that allows for weekly billing.
I would definitely be interested in learning more about the specifics of your model.
At my gym, we do offer either "pay in full" package (5, 10, or 20 sessions) or the optional "financing" PT package. The "pay in full" is just that, the member has to pay for the full amount of PT sessions up front...which is expensive to most. With this option, they can use the sessions whenever they like. The other "financing" type of package, does give the member the option to choose however many sessions they would like to attend (5, 10, 20) and then break it down even further into sessions they want to dedicate themselves to on a weekly basis (1, 2, 3, 4, 5). Each week, the member is then automatically charged based on the amount of weekly sessions they committed to whether they attend the session or not. I designed software for my billing company that allows for weekly billing.
I would definitely be interested in learning more about the specifics of your model.
2
In fact, I'll post the report I wrote below on specifically how to do this and it's benefits. If you'd like a free copy of this, just shoot me an email at my address below.
How to Set Up EFT/ARB in Your Personal Training Business
A better way to bill and retain your clients and avoid “selling”
It’s no secret; most personal trainers hate to sell. They hate to sell themselves and they hate to sell their services. That’s fine, a lot of people have a hard time pricing themselves and that gets better with more experience as an entrepreneur. But, if you hate doing it, don’t put yourself in a position where you are forced to do it over and over again. What am I talking about?
I’m talking about EFT or ARB. EFT is electronic funds transfer, or as my bank calls it, automatic recurring billing. We are fortunate to be in an industry where typically, your services are paid for ahead of time. That’s great. You don’t have to bill your clients after the fact and constantly chase down 50% of them to get paid for what you have already performed. So, we are a step ahead on that one.
Now why do most trainers continue to sell single sessions or packages of 10, 20 or more sessions? What happens at the end of that 10 or 20? You are in a position where most of the value of your clients comes from repeat business. Selling a fixed number of sessions implies that they will stop at some point. Not what you want!! You want them to fall in love with you and not be able to exercise without you.
Every time you come to an end of a package, you have to resell them on another package. If they bought a big one up front, how are you going to convince them to buy a big one again? If they see that big dollar amount, they may want to go for the smaller package this time. How are you going to top your original sales pitch to get them to sign up the first time? Worst of all, they may just take it as an opportunity to “take a break” or stop altogether. Does this sound familiar? Wouldn’t it be better if you could have a better chance at retaining these people, more predictable and reliable income, and not have to resell people every time they complete their package with you? The fact is, there is.
Just take a look at what your own gym does to you. They sign you up with an advance (initiation fee), slowly dribble a recurring monthly fee out of your account“automatically. If they are smart, they locked you into a long term deal like a year or more. Some places will lock you in for 3 years. Those days may be gone for a while. I like to advertise and use as a selling point, month to month agreements, but that’s because I know the likelihood of someone quitting after only the first month or two is low. It makes them feel comfortable not having to “commit” to something too big or for too long. The point is that the system is automatic, just like a gym membership. Think of what you are selling as a personal training membership. Here’s how we have done it.
You’ll need a business bank account with your EIN number. This is your Employer Identification Number. You can obtain that easily from the IRS after you are a legal business entity. Once you have your business bank account, ask about their merchant services and the ability to take credit cards. My bank uses a virtual terminal through authorize.net. Even other services like Paypal now have a business account and virtual terminal option to make things easy. The point is to find a payment processor that will allow you to take and process credit cards automatically. There will likely be a very small transaction fee and something like 2-3% of the total transaction. And I think our cost for having the recurring billing option is $10 a month. And possibly the more volume of transactions you do, the lower your rate will be. It can look like a lot when your statement comes, especially for American Express cards, but with such a high priced service, we should be able to maintain relatively high margins to allow for this. Plus, NOT having the headaches of chasing people down, keeping track of sessions, getting bad checks, etc. makes up for the relatively small costs of processing credit cards and doing it automatically.
The crucial feature of this system is the ability to set up recurring payments on a monthly basis automatically. So for every new client I see, I sell them on one of our options, usually either 2 or 3 times per week (it’s cheaper per session the more frequent they workout). From here on out, it is just a monthly membership. You can choose to charge them an initiation fee if you like or not. If not, make sure you note that to them so they know how much they are saving. If you own a facility, I would charge them a small one. Let’s say they want to train 2 times a week at $60/session. That’s $480/month. Let’s make it look more marketable and call it $479/month. That’s it. You enter that into your system open ended with no end date and let it roll until they need to stop, if they need to. I’ve had clients for the better part of a decade on this system and I’ve never stopped it.
You can tell them that twice per week is 8 workouts a month based on a 4 week month. Some months have 5 weeks so they may get 9 or 10 workouts, but only pay for 8. That’s a plus for them. Or if they happen to take a week off out of 3 months, there’s no penalty. That’s another plus for them. Over the course of a year, you are actually giving them a full month for FREE if they are consistent (52 weeks in a year, but you only charge for 48). That’s another plus for them. Think of it like a bonus for consistency. Actually, due to sickness and vacation, they probably will end up taking that month off, but the point is that you are over delivering and accounting for things that may arise. This way they aren’t paying for something that they aren’t using like a traditional gym membership. If they need to take more time than that, then you can have them do make up sessions into the next month or simply adjust next month’s payment amount. Some programs will let you skip a month or stop the subscription and restart it later. It’s very easy to do without having to keep asking them to write big checks or give you their credit card over and over again. The more they feel like they are repeatedly paying you, the more they may consider cutting it out eventually. You want to remove that emotional action from your dealings with them so they see the transaction later on their credit card statement and it’s just another bill coming from someone else, not you!!
Let’s compare this to the same rate per session of $60 and you sold them 48 sessions that will last 6 months. The total for that package would be $2880. That’s a lot to plunk down all in one shot for most people. That could be a down payment on a new car! Why would they want to waste that on PT? Good question. Many wouldn’t. Now let’s say you come to the end of that package. What is the likelihood that you will get a renewal for that amount again in a quick 6 months especially in a down economy when few people have much cash lying around? Maybe not the best chance. If you have this person on ARB, they will probably just blow right past that 6 month mark and you would not have to “resell” them again to keep working with you. You’d get more out of them, they are more consistent and get better results. In the long run, you are more likely to realize the true lifetime value of the client by increasing your retention by charging lower monthly fees. There are a few different ways you can work this scenario, but above all else, do it monthly, and make it automatic. It also keeps the client more accountable by having their sessions attached to time instead of having someone stretch out 48 sessions over two years. That isn’t helping anybody. This system will weed out those people as well so that you can focus on the more committed clients. For added stability and predictability, pro-rate your client’s first month and start their next month on either the 1st or the 15th of the month, whichever is closest to their sign up date. This way you won’t have unpredictability by having nothing coming in for 8 days and then $10,000 in one day. It will even out your cash flow and you should know exactly what is coming in twice per month. It will help with your cash flow to pay your own bills. And it should help you with your projections based on your monthly goal of new clients to acquire. Simply add the number of new clients and the resulting revenue to the monthly totals to find what you need to reach your monthly goals.
I hope this report is useful for you. It is a little utilized system, but the best in terms of what I have seen to sell and retain the clients that you worked hard to get. If you have more questions about the system or how to implement it, just shoot me an email at chrislutz@spartatraining.com . I’ll be happy to help. For similar useful tools be sure to check out our Personal Trainer Marketing and Sales materials at http://www.spartatraining.com/store.
How to Set Up EFT/ARB in Your Personal Training Business
A better way to bill and retain your clients and avoid “selling”
It’s no secret; most personal trainers hate to sell. They hate to sell themselves and they hate to sell their services. That’s fine, a lot of people have a hard time pricing themselves and that gets better with more experience as an entrepreneur. But, if you hate doing it, don’t put yourself in a position where you are forced to do it over and over again. What am I talking about?
I’m talking about EFT or ARB. EFT is electronic funds transfer, or as my bank calls it, automatic recurring billing. We are fortunate to be in an industry where typically, your services are paid for ahead of time. That’s great. You don’t have to bill your clients after the fact and constantly chase down 50% of them to get paid for what you have already performed. So, we are a step ahead on that one.
Now why do most trainers continue to sell single sessions or packages of 10, 20 or more sessions? What happens at the end of that 10 or 20? You are in a position where most of the value of your clients comes from repeat business. Selling a fixed number of sessions implies that they will stop at some point. Not what you want!! You want them to fall in love with you and not be able to exercise without you.
Every time you come to an end of a package, you have to resell them on another package. If they bought a big one up front, how are you going to convince them to buy a big one again? If they see that big dollar amount, they may want to go for the smaller package this time. How are you going to top your original sales pitch to get them to sign up the first time? Worst of all, they may just take it as an opportunity to “take a break” or stop altogether. Does this sound familiar? Wouldn’t it be better if you could have a better chance at retaining these people, more predictable and reliable income, and not have to resell people every time they complete their package with you? The fact is, there is.
Just take a look at what your own gym does to you. They sign you up with an advance (initiation fee), slowly dribble a recurring monthly fee out of your account“automatically. If they are smart, they locked you into a long term deal like a year or more. Some places will lock you in for 3 years. Those days may be gone for a while. I like to advertise and use as a selling point, month to month agreements, but that’s because I know the likelihood of someone quitting after only the first month or two is low. It makes them feel comfortable not having to “commit” to something too big or for too long. The point is that the system is automatic, just like a gym membership. Think of what you are selling as a personal training membership. Here’s how we have done it.
You’ll need a business bank account with your EIN number. This is your Employer Identification Number. You can obtain that easily from the IRS after you are a legal business entity. Once you have your business bank account, ask about their merchant services and the ability to take credit cards. My bank uses a virtual terminal through authorize.net. Even other services like Paypal now have a business account and virtual terminal option to make things easy. The point is to find a payment processor that will allow you to take and process credit cards automatically. There will likely be a very small transaction fee and something like 2-3% of the total transaction. And I think our cost for having the recurring billing option is $10 a month. And possibly the more volume of transactions you do, the lower your rate will be. It can look like a lot when your statement comes, especially for American Express cards, but with such a high priced service, we should be able to maintain relatively high margins to allow for this. Plus, NOT having the headaches of chasing people down, keeping track of sessions, getting bad checks, etc. makes up for the relatively small costs of processing credit cards and doing it automatically.
The crucial feature of this system is the ability to set up recurring payments on a monthly basis automatically. So for every new client I see, I sell them on one of our options, usually either 2 or 3 times per week (it’s cheaper per session the more frequent they workout). From here on out, it is just a monthly membership. You can choose to charge them an initiation fee if you like or not. If not, make sure you note that to them so they know how much they are saving. If you own a facility, I would charge them a small one. Let’s say they want to train 2 times a week at $60/session. That’s $480/month. Let’s make it look more marketable and call it $479/month. That’s it. You enter that into your system open ended with no end date and let it roll until they need to stop, if they need to. I’ve had clients for the better part of a decade on this system and I’ve never stopped it.
You can tell them that twice per week is 8 workouts a month based on a 4 week month. Some months have 5 weeks so they may get 9 or 10 workouts, but only pay for 8. That’s a plus for them. Or if they happen to take a week off out of 3 months, there’s no penalty. That’s another plus for them. Over the course of a year, you are actually giving them a full month for FREE if they are consistent (52 weeks in a year, but you only charge for 48). That’s another plus for them. Think of it like a bonus for consistency. Actually, due to sickness and vacation, they probably will end up taking that month off, but the point is that you are over delivering and accounting for things that may arise. This way they aren’t paying for something that they aren’t using like a traditional gym membership. If they need to take more time than that, then you can have them do make up sessions into the next month or simply adjust next month’s payment amount. Some programs will let you skip a month or stop the subscription and restart it later. It’s very easy to do without having to keep asking them to write big checks or give you their credit card over and over again. The more they feel like they are repeatedly paying you, the more they may consider cutting it out eventually. You want to remove that emotional action from your dealings with them so they see the transaction later on their credit card statement and it’s just another bill coming from someone else, not you!!
Let’s compare this to the same rate per session of $60 and you sold them 48 sessions that will last 6 months. The total for that package would be $2880. That’s a lot to plunk down all in one shot for most people. That could be a down payment on a new car! Why would they want to waste that on PT? Good question. Many wouldn’t. Now let’s say you come to the end of that package. What is the likelihood that you will get a renewal for that amount again in a quick 6 months especially in a down economy when few people have much cash lying around? Maybe not the best chance. If you have this person on ARB, they will probably just blow right past that 6 month mark and you would not have to “resell” them again to keep working with you. You’d get more out of them, they are more consistent and get better results. In the long run, you are more likely to realize the true lifetime value of the client by increasing your retention by charging lower monthly fees. There are a few different ways you can work this scenario, but above all else, do it monthly, and make it automatic. It also keeps the client more accountable by having their sessions attached to time instead of having someone stretch out 48 sessions over two years. That isn’t helping anybody. This system will weed out those people as well so that you can focus on the more committed clients. For added stability and predictability, pro-rate your client’s first month and start their next month on either the 1st or the 15th of the month, whichever is closest to their sign up date. This way you won’t have unpredictability by having nothing coming in for 8 days and then $10,000 in one day. It will even out your cash flow and you should know exactly what is coming in twice per month. It will help with your cash flow to pay your own bills. And it should help you with your projections based on your monthly goal of new clients to acquire. Simply add the number of new clients and the resulting revenue to the monthly totals to find what you need to reach your monthly goals.
I hope this report is useful for you. It is a little utilized system, but the best in terms of what I have seen to sell and retain the clients that you worked hard to get. If you have more questions about the system or how to implement it, just shoot me an email at chrislutz@spartatraining.com . I’ll be happy to help. For similar useful tools be sure to check out our Personal Trainer Marketing and Sales materials at http://www.spartatraining.com/store.
1
Additionally, below is a list of our policies laid out in our client consultation forms that explains what they are paying for and how they can use them and not lose anything.
"Liability Waiver:
I, the undersigned, being aware of my own health and physical condition, and having knowledge that my participation in any exercise program may be injurious to my health, am voluntarily participating in physical activity with S.P.A.R.T.A.
Having such knowledge, I hereby release S.P.A.R.T.A., their representatives, agents, and successors from liability for accidental injury or illness which I may incur as a result of participating in the said physical activity. I hereby assume all risks connected therewith and consent to participate in said program.
I agree to disclose any physical limitations, disabilities, ailments, or impairments which may affect my ability to participate in said fitness program.
Signature: _______________________________ Date: _______________
Cancellation/Reschedule Policy for Sessions
All cancellations must be received at least 12 hours before your training session in order to avoid being charged for your session. Clients who do not cancel with 12 hours notice will be charged for the cancelled session. S.P.A.R.T.A. understands that emergencies happen. We provide every client with one free short-notice cancellation. You will not be charged for your first cancellation with less than 12 hour notice. The free short-notice cancellation only applies if S.P.A.R.T.A. is notified prior to the session start time. No shows are not eligible for the free cancellation. You may reschedule your appointments for other times as make ups.
If you need to cancel a session altogether without make up, please contact your trainer as soon as possible.
Refund Policy
NO RISK! S.P.A.R.T.A. strives to provide the best possible service to our clients. If for any reason you are not satisfied with our services after 30 days, we will be happy to issue you a refund.
If you have paid for a package in full, you will be refunded for unused sessions and services.
I have read the above policies and agree to its terms as it applies to my personal training.
Signature: __________________________________ Date: __________
*FREE TRIAL WORKOUT at this point*
Training with S.P.A.R.T.A.
Your health and fitness investment with S.P.A.R.T.A. includes:
FREE month of training.
FREE fitness assessments (body fat%, circumference measurements, etc.).
FREE 3 step fat loss guide upon sign up.
Guaranteed results!!!
Good: 2 times per week plan with ($65/session)
Better: 3 times per week plan with ($60/session)
Best Value: 4 times per week plan ($55/session)
*Each plan has a 1 time initiation/start up fee $150* A low monthly gym membership fee will be charged to your card starting NEXT month.
Plans are based only on a month to month commitment and are calculated on an eight (8) session (2 times per week), twelve (12) session (3 times per week), or sixteen (16) session (4 times per week) basis. This means that over the course of a year, you are actually getting a FREE month (8 or 12 or 16 sessions) in that year’s time. Session make ups are available. Plans are paid monthly and you’ll be automatically renewed each month for as long as you wish.
Referral Program
Most of our new business is word of mouth referrals. We want you to look and feel great and continue to bring us new business. In return, we will reward your efforts by giving you a FREE MONTH for every 4 people who sign up that you refer!"
"Liability Waiver:
I, the undersigned, being aware of my own health and physical condition, and having knowledge that my participation in any exercise program may be injurious to my health, am voluntarily participating in physical activity with S.P.A.R.T.A.
Having such knowledge, I hereby release S.P.A.R.T.A., their representatives, agents, and successors from liability for accidental injury or illness which I may incur as a result of participating in the said physical activity. I hereby assume all risks connected therewith and consent to participate in said program.
I agree to disclose any physical limitations, disabilities, ailments, or impairments which may affect my ability to participate in said fitness program.
Signature: _______________________________ Date: _______________
Cancellation/Reschedule Policy for Sessions
All cancellations must be received at least 12 hours before your training session in order to avoid being charged for your session. Clients who do not cancel with 12 hours notice will be charged for the cancelled session. S.P.A.R.T.A. understands that emergencies happen. We provide every client with one free short-notice cancellation. You will not be charged for your first cancellation with less than 12 hour notice. The free short-notice cancellation only applies if S.P.A.R.T.A. is notified prior to the session start time. No shows are not eligible for the free cancellation. You may reschedule your appointments for other times as make ups.
If you need to cancel a session altogether without make up, please contact your trainer as soon as possible.
Refund Policy
NO RISK! S.P.A.R.T.A. strives to provide the best possible service to our clients. If for any reason you are not satisfied with our services after 30 days, we will be happy to issue you a refund.
If you have paid for a package in full, you will be refunded for unused sessions and services.
I have read the above policies and agree to its terms as it applies to my personal training.
Signature: __________________________________ Date: __________
*FREE TRIAL WORKOUT at this point*
Training with S.P.A.R.T.A.
Your health and fitness investment with S.P.A.R.T.A. includes:
FREE month of training.
FREE fitness assessments (body fat%, circumference measurements, etc.).
FREE 3 step fat loss guide upon sign up.
Guaranteed results!!!
Good: 2 times per week plan with ($65/session)
Better: 3 times per week plan with ($60/session)
Best Value: 4 times per week plan ($55/session)
*Each plan has a 1 time initiation/start up fee $150* A low monthly gym membership fee will be charged to your card starting NEXT month.
Plans are based only on a month to month commitment and are calculated on an eight (8) session (2 times per week), twelve (12) session (3 times per week), or sixteen (16) session (4 times per week) basis. This means that over the course of a year, you are actually getting a FREE month (8 or 12 or 16 sessions) in that year’s time. Session make ups are available. Plans are paid monthly and you’ll be automatically renewed each month for as long as you wish.
Referral Program
Most of our new business is word of mouth referrals. We want you to look and feel great and continue to bring us new business. In return, we will reward your efforts by giving you a FREE MONTH for every 4 people who sign up that you refer!"
1
Awesome detailed information about your model Chris! Thank you for the details. I am sure this will help a lot of people!
0
Although I don't personally sell my training that way, I'm definitely interested in why you feel it "was the best change we've ever made in our business." Thoughts?
Also, what are the parameters you've set for the following:
-Cancellation policy?
-Number of sessions per week?
-How do you prioritize which clients get which times?
-Number of clients per session?
It sounds interesting and I'd love to know more! Hope to hear back from you soon.
Also, what are the parameters you've set for the following:
-Cancellation policy?
-Number of sessions per week?
-How do you prioritize which clients get which times?
-Number of clients per session?
It sounds interesting and I'd love to know more! Hope to hear back from you soon.
0
Hi Chris,
Good question. I don't use this system because some of my clients are people who either travel due to work or other times they have other type of conflicts or need to switch slots and I don't feel comfortable charging them every month when they have unused sessions. If this is something that works for your business that's great and I wouldn’t change it if it was me. It’s probably a good way of knowing up front who will continue and the amount of income coming in for next month and also guarantees them the time slots they have chosen.
Best,
Harris
Good question. I don't use this system because some of my clients are people who either travel due to work or other times they have other type of conflicts or need to switch slots and I don't feel comfortable charging them every month when they have unused sessions. If this is something that works for your business that's great and I wouldn’t change it if it was me. It’s probably a good way of knowing up front who will continue and the amount of income coming in for next month and also guarantees them the time slots they have chosen.
Best,
Harris
0
Hi Chris,
not sure what a 'recurring fee' is but I write monthly invoices to my clients based on the number of sessions they had with me that month. I have done that from the beginning of my personal training, and, that way, I was never in the business of reselling packages or services. To me, this works great.
Karin Singleton
www.meltnc.com
not sure what a 'recurring fee' is but I write monthly invoices to my clients based on the number of sessions they had with me that month. I have done that from the beginning of my personal training, and, that way, I was never in the business of reselling packages or services. To me, this works great.
Karin Singleton
www.meltnc.com
0
Hello Chris Lutz,
I charge at the end of each session; keeping things simple for everyone.
This way I feel like I help people instead of being strictly a business.
Take care.
I charge at the end of each session; keeping things simple for everyone.
This way I feel like I help people instead of being strictly a business.
Take care.
0
I charge for ten sessions at a time, at the beginning of our cycle, this makes my bookkeeping simple and it also makes it easier to enforce my 24hour advance notice for cancellations.
0
I agree with the recurring fees. However, it usually depends on what the client would like to do. Sometimes they want weekly, others monthly.
I set up whatever really works for them.
I set up whatever really works for them.
0
All good answers everybody. Thanks. I like it because it's one sale to the client up front and then automatically charged to their credit card every month there after. It's paid for ahead of time and attached to time so the clients have incentive to complete them. Make ups are allowed, of course.
There's no chasing down people for checks, no bad checks, nobody forgetting their wallet when they are supposed to pay, nobody stretching out packages of sessions over long periods of time, I don't have to re-sell them to renew, if I need to give a refund, it's never for more than a month's worth at a time. I know exactly how much is coming in and when.
There are a lot of reasons to do it and not many not to. I've written something about how to do this if anyone is curious or would like the exact model we use. I'd be glad to help implement it if you're looking to do the same. Contact me with any questions you might have.
There's no chasing down people for checks, no bad checks, nobody forgetting their wallet when they are supposed to pay, nobody stretching out packages of sessions over long periods of time, I don't have to re-sell them to renew, if I need to give a refund, it's never for more than a month's worth at a time. I know exactly how much is coming in and when.
There are a lot of reasons to do it and not many not to. I've written something about how to do this if anyone is curious or would like the exact model we use. I'd be glad to help implement it if you're looking to do the same. Contact me with any questions you might have.
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