This episode challenges gym owners to strategically raise their EFT (Electronic Funds Transfer) prices to ensure profitability and long-term business viability. It provides a contrarian perspective on customer retention, arguing that losing low-paying, unprofitable customers can create capacity and increase overall revenue and profit. The episode emphasizes direct, honest communication with members about pricing changes, framing it as essential for business sustainability and improved service.
Key takeaways
Identify your blended average EFT and understand that if it's too low (e.g., $100/month for gyms), your business is likely unsustainable.
Prepare to communicate price increases directly and honestly with long-standing members, explaining that the increase is necessary for the business's survival and ability to reinvest in better service.
Reframe price increases not as a loss, but as an opportunity to shed unprofitable customers and create capacity for higher-paying clients, ultimately leading to higher revenue and better service for remaining members.
When communicating price increases, present the new rate with options to adjust terms (e.g., bi-weekly payments) but maintain a firm stance on the price itself.
If you have an effective customer acquisition system, losing 10-20% of members due to a price increase can free up capacity to acquire new, higher-paying customers, significantly boosting overall revenue.
"And it all comes down to making sure that our prices make sense." Today, Alex (@AlexHormozi) discusses the importance of raising EFT prices for legacy gym members and how to handle the situation with honesty and respect. He emphasizes the need to focus on profitability and offers tips on how to communicate the price increase effectively.Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned on his path from $100M to $1B in net worth.Timestamps:(0:51) - Careful communication for raising gym prices(1:43) - Ethically explain need for profitability with price increase(3:15) - Address concerns and negotiate alternative terms(5:43) - Personally contact customers to discuss pricing changes and benefits.(7:30) - Explain the necessity of raising prices for business growth.(8:51) - Increasing blended average EFT for higher profits and capacity.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition
What does this episode say about founder & leadership?
Identify your blended average EFT and understand that if it's too low (e.g., $100/month for gyms), your business is likely unsustainable.
What does this episode say about customer retention?
Prepare to communicate price increases directly and honestly with long-standing members, explaining that the increase is necessary for the business's survival and ability to reinvest in better service.
What does this episode say about finance & fundraising?
Reframe price increases not as a loss, but as an opportunity to shed unprofitable customers and create capacity for higher-paying clients, ultimately leading to higher revenue and better service for remaining members.
What does this episode say about founder & leadership?
When communicating price increases, present the new rate with options to adjust terms (e.g., bi-weekly payments) but maintain a firm stance on the price itself.
What does this episode say about founder & leadership?
If you have an effective customer acquisition system, losing 10-20% of members due to a price increase can free up capacity to acquire new, higher-paying customers, significantly boosting overall revenue.
