Swim Clubs

SETTING YOUR PRICES

You cannot lead if you do not understand every aspect of what it takes to operate the business. Set prices for success. The service must be priced to entice clients and cover your overhead, operational, labor and marketing costs. And most important, you need to make a profit. When establishing a price for a specific program you must consider all aspects of your program. Your pricing has to cover your hourly cost for the facility, plus staffing, plus overhead and expenses, plus assure you the profit you need to operate a sustainable business. 

  1. Define your personal financial goals. Your goals impact your pricing strategy. Do you want to have a lot of money in reserve or do you want to fund club development activities?
  2. Investigate market trends. Pricing is subject to market forces and client demands. Obtain information to help you predict your market in terms of growth prospects and trends.
  3. Obtain competitive information. Clients price shop. Make sure you provide special features for which clients are willing to pay more, but keep your price reasonably competitive.
  4. Cover the cost of doing business. At first, you may be using your "best guess" cost estimates. As the business grows, track your real costs of doing business, and reflect them in the pricing structure.

Here are some pricing strategies you may find interesting. The last one, Value Received Pricing, is highly recommended.

  • PRICE TAKERS/PRICE MAKERS. Can you imagine the confusion and financial destiny of the store that allowed the customer to pay whatever they thought was “fair” for bread and milk or the insurance company that lets you pay whatever you can afford for health insurance? In this case the people who are going to use the service are the ones setting the fees.  While for some swim clubs run by a volunteer parent board this may be an admirable undertaking, it is not an effective way to conduct a business. 
  • COMPARATIVE PRICING. “The swim team down the street charges this many dollars so we can charge so many dollars more or less.” If you are in business to collect fees rather than offer service, then this is probably the system that set your original pricing. However, the pool down the street is probably in as much of a tentative financial situation as you are so why copy their prices?  Plan to offer a superior service and set you pricing so you can afford to do so.
  • TRADITIONAL PRICING. ” We’ve always charged this much so that is what we have to go with!” This structure is based on the fear that customers will leave if prices are noticeably raised. This mind set does not take into account that utility prices have doubled in the last 20 years or that salary requirements are up over 30% during the same period. Yesterday’s prices are unrealistic.
  • SHARED FUNDING PRICING This assumes that the clients are not responsible for paying their fair share of the cost of running a facility or a program. This is common in a municipality or university/school setting. If tax dollars or activity fees build a facility that is what they accomplished. Programming must be designed so that the operational cost of the facility and staffing of the programs is paid for as a separate business.  Even non-profit businesses should not lose money. If you are renting such a facility, be prepared to pay your fair share of operational costs and set your fees accordingly.
  • VALUE RECEIVED PRICING This is pricing that is financially self-sustaining. It is really a very simple and extremely effective method. It is based on the following premises when compared to your local or regional competition:
    • Hire a more prepared and competent staff and make sure you advertise their certifications and or licenses.
    • Make sure your program offers more and better amenities that offer your clients advantages not available elsewhere.
    •  Make “customer service” your motto and train staff accordingly.
    • Offer the best programs available anywhere and make sure your clients and staff believe this and deliver.

 


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