- Readers will identify which benefit(s) presented by fee-based services are most meaningful to their business
- Readers will ask themselves a template of questions designed to indicate the services in line with their vision and market opportunity
- Readers will be able to use the examples of successful companies to avoid wasting time and money when developing their fee-based business
Delicatessen. Frozen yogurt shop. Sandwiches and Wraps take-out. Make your own salad grab n' go. Every few months, the little eatery on the corner of 45th & Lexington Avenue changed hands. As with every new owner, came a new cuisine. A busy corner in the middle of a thriving commercial area, this seemingly prime lunch spot was failing to make its mark and build a hungry following. It was as if the corner was cursed.
Until, in 2011, all that changed when a dumpling shop opened its doors at this same location. With its catchy name and the requisite logo of a fast food franchise, lunchtime lines began pouring out of the newest outpost of this young dumpling chain, signaling a new age for 45th & Lexington.
Why was this dumpling shop successful when so many businesses previously at this location failed? Was it luck? The success on 45th & Lexington was simply a case of a "good fit." The dumpling shop provided the right service, at the right price point for a ripe market, and the rest is history.
In the fitness profession, finding the right fit for what you offer the market is rarely the first thought of most personal trainers. Most just want to do what they love and move others toward better health and performance. Personal trainers may offer a plethora of service options for the clientele, including a variety of fee-based services. However, it’s important to define the focus of the business and needs of the market in order to grow the business successfully. Much like the dumpling shop, a fitness business will thrive when the services offered are consistent with the market.
What IS a Fee-Based Service?
The fitness industry has come a long way from basing revenue streams solely on membership, one-on-one training, and group classes. Through diverse fee-based offerings, fitness centers worldwide have expanded to become one-stop shops for health, beauty, wellness and…fitness. These fee-based services include any and all services within the scope of practice consistent with the brand and may include group trainings, massage, stretch sessions, nutrition coaching, and facials to name a few. In order for these fee-based services to thrive and benefit the fitness professional, as well as the business, it is critical for the service to appeal to the clients and the members. For instance, Gold’s Gym, with its history and brand recognition, would be better suited to focus on fee-based services such as "Maximizing Your Lift" training packages, rather than facials. Whereas, the golf club-spa-fitness centers of Florida’s Gold Coast would likely benefit from a different approach by offering facials or spa fee-based services. These services are specifically targeting the clientele of the business.
Often times these services are offered as "add-ons" to the services the client/customer currently receives or pays for, and are offered at a discounted rate compared to the staple services of the business. For example, a client who purchases one-on-one training sessions at a higher rate may also purchase a fee-based service, such as stretching sessions or nutrition coaching, at a lesser rate to complement their fitness goal. However, it is not uncommon for a customer or client to engage solely in fee-based services, or for a business to offer a menu of fee-based services for customers to pick and choose from, rather than presenting them as “add-ons.”
Choosing the Service that Matches Your Market
In order to select fee-based services that have the opportunity for success in your business, it is important to define your target market, the customers you are aiming to attract. Secondly, it is important to define the price point of your services. These are the factors that contribute to a program or service succeeding in one market or business, while failing in another. Whether you are a fitness professional who owns your own business, or you are working for a fitness corporation, the questions below can be utilized to strategize your next steps in building your fee-based service offerings. Your answers will help you assess your current service strengths and viable market opportunities.
Get to Know Your Target Market
- Who is your target market?
- Male, female, or both
- Athletes or active individuals
- Sedentary individuals
- What do they value?
- Cool factor
- Family friendly
- Tech savvy/gadgetry
- Where is your target? Are they nearby or do you travel to reach them?
- Where will you be offering your service?
- What items or services do they currently spend their money and time on?
- What are their habits?
- Train in groups
- Train solo
- Nutritional products
After writing your answers to the questions above, you will have a greater understanding of your target market and what services will resonate with that population. Consider the daily activities, needs, and interests of that population when selecting your fee-based service offering. It is also important to consider what your target market values. Individuals who value convenience due to their limited schedules may find a quick "lunch time" session beneficial, or a service that provides them with workouts while they are unable to make it to a workout session. Whereas, others may want to take their time and become part of the group, incorporate their family, or engage in a one-on-one session. Next, determine where your target market is located and where you can offer your services. You may be limited in the services you can offer if travel is involved, and some services may not be feesible in all locations. Lastly, gain an understanding of the habits of your market and your service will be most appealing. If massage or nutritional products, etc. are a common practice with your market, you are better off to offer these services, rather than the individual seek the services elsewhere.
Determine Your Service and Your Price Point
- What is my offering?
- Are they paying for this service in surrounding areas? If so, how much?
- What would they pay for my offering?
- How is my offering better/more attractive than their alternatives?
Your answers to these questions, combined with the information gathered on your target market, will allow you to create the specifics of your fee-based service. After selecting what service you will offer, research similar services offered in the surronding area. This will help you to determine what price point you can offer your service, and position your service to appeal to your customers.
Successful fee-based services are consistent with the core business. As a product based business, the dumpling shop sells sides and beverages that go well with their dumplings. They did not add gyros or make-your-own-salads to the menu. The same principle applies to service based businesses, such as offered by fitness professionals. The fee-based services best suited reflect the kind of services the consumer would logically accept or expect to be offered.
Location vs. Type of Service
Once the target market and offering are decided, clarifying the business structure and next steps for development are easier to identify.
- If the type of business is more important that the location: Define the type of business and then look for where the target demographic is most penetrable. As the brand builds, new viable markets will arise. Do like the dumpling shop and go where the market is ripe for your services and price them accordingly.
- If location is more important than the type of business (many independent fitness professionals aim to work a short distance from home): Evaluate the businesses thriving in the local area and the potential competition already providing like services. The answers to both will indicate what is selling well in the area and identify areas to establish differentiation from competitors.
The list below provides examples of some of the types of fee-based services that are offered by many fitness professionals. Which of these examples would work best for you?
- Personal Training
- Small Group Training
- Large Group Training (i.e. Boot Camp)
- Fitness Testing (Vital stats for biomechanical, physiological and performance metrics, i.e. Gait Analysis, VO2 max and O2 uptake)
- Ergonomics Assessment & Consulting
- Home/Travel Workout Programs
- Nutritional Consultation/Coaching
- Goal Setting Consultations
- In Depth Getting-to-Know Equipment Tutorials
- Daily/Weekly/Monthly video clips or email subscriptions
- Spa services
- Bodywork (ART, Acupuncture, Massage, MAT)
- Complimentary Formats (Feldenkrais, Gyrokinesis, Pilates, TRX)
- Sport Specific Coaching
- Injury Prevention programs
- Theme packages (Couples training, Pre-Summer training, Spring Break training, Post-holiday Fit Fest, Maximize Your Lift, Bride-to-be, Mother’s Day/Father’s Day specials, Pre/Postnatal training)
- JV Packages (Joint venture packages in which you partner with a colleague or another business to sell fee-based services that combine both of your services)
This is by no means a complete list. If the examples above sparks ideas, all the better.
The Benefits of Offering Fee-based Services
Depending on the fee-based services in question, inclusion of fee-based services in your business model presents a wide range of benefits from increased revenue, increased retention, exposure to clients whose needs do not fit the traditional model, and fulfilling the vision to provide customers with a more comprehensive experience. The right services net tremendous impact.
Fee-based services increase revenue by offering payment for services in addition to the required fees of the membership or existing services paid for by the customer. There is also great opportunity for retention by capturing customers, who decide they can no longer pay for the higher priced services they were participating in, by offering them more affordable fee-based service packages. Providing these options to customers who have not participated in other services allows them to have a greater interaction with staff and other customers, builds relationships, and increases their support system, which ultimately extends their relationship with the business. Lastly, fee-based services can provide a one-stop-shop business for your customers, encouraging them to invest more in your business, rather than go elsewhere.
Donna Krech, Founder/CEO Thin&Healthy’s Total Solution and Fitness Solution 24/7, had words of advice on this subject, “Here’s the thing, your members are looking for far more than just a fitness membership. They’ll go somewhere else for their answers, if you don’t provide it to them. Don’t believe me? Take a survey. You’ll find that right at 80% of them are paying someone else for what they would pay you for, if you offered it.”
Examples from Successful Companies
Example 1: Large licensing/membership based company – Thin&Healthy’s Total Solution and Fitness Solution 24/7
“Our fee based services, programs and products (anything that brings you more than a fairly low residual monthly EFT) literally more than doubles our income every year! Fitness has become a commodity and if monthly dues are all you’re offering, you’re in big trouble financially. EFT’s will drop, as will new memberships. Each year when we plan our annual performas (a spread sheet created to project what kind of income, expense and profit will be attained in the coming year), we plan for every Ancillary Income Dept. (aka fee-based) to profit on its own. This adds major money to the bottom line. Not to mention providing the members what they’re looking for. In addition to the standard personal training and group personal training, we offer Life Coaching, Guaranteed Weight Loss, Education on Nutritional Supplements and the sales that go with that, Stress Reduction Programs, Smoking Cessation and Longevity Programs and Products. We believe in WELLNESS and my opinion is that anyone in our industry should too. ” 
Consider the above words of successful entrepreneur, speaker and published author, Donna Krech, Founder/CEO of Thin&Healthy’s Total Solution and Fitness Solution 24/7, and ask yourself how her philosophy, approach and offerings relate to your gym, chain, or licensing based business.
Example 2: Private Practitioner – Ilene Bergelson at Lifemoves Health
Testimony from the Author, Ilene Bergelson:
As a trainer, educator and professional performer, I travel and work out of town several times a year. Potential clients are made aware of this before working together and everyone on the roster has become accustomed to dealing with periods where I am out of town for anywhere from a few days to over a month. My fee-based offerings have grown to include various types of sessions, consulting to companies and industry professionals, educational programs, related products, writing and speaking services.
One extremely common situation I converted into a lucrative fee-based service dealt with several options of what to do in my absence: train with a trusted and fully briefed colleague, workout on their own using a program I designed at no extra charge especially for this purpose, or choose their own workouts. The requests were usually a combination of the three. Then one year, I learned a valuable lesson, benefitting both my clients’ wellbeing and my bottom line. I was cast in a play and went away for two months. In the weeks before rehearsals began, many of my clients requested a home program, swearing they would do it faithfully. I spent about 30 hours writing programs for everyone. For free. I was extremely disappointed to discover the number of times they had used their programs (which they all were so excited to get when they learned them before I left). That was the last time I made that mistake. Once I started charging for these home programs, their perceived value increased and so did their usage. This fee-based service increased my incoming revenue, kept my clients engaged, and has proven to be very beneficial to my business.
Here are some additional examples of benefits cited directly from fitness professionals in both large and small scale settings:
- Gained new clients by working with the spouses of existing clients because existing client bought their partner a stretch session.
- Sold additional sessions to clients who would not have been able to afford the one-on-one hourly rate.
- Continued training with clients who suffer a financial setback by shifting them into another service that meets their new budget.
- Increased retention
- Increased client compliance in between one-on-one sessions
- Increased client satisfaction due to more comprehensive care
- Increased camaraderie and community amongst clients
- Faster results for clients
- Broader circle and heightened credibility in the marketplace
- Generated a more consistent income
In short, fee-based services can ensure that client goals (and the fitness professional's paycheck) are rarely compromised. Fee-based services also provide more options to service the client. The more we can do for our clients, the greater value we have as fitness professionals.
Example 3: Exclusive boutique – Bowskill Clinic
John Bowskill, Owner of the Bowskill Clinic in London, made an important discovery that led to changing his fee-based business model. Bowskill (2012) explained:
“We thought group training would be very popular. Surprisingly, it never took off. Over time we realized individual, specialized sessions were more the direction we needed to go. We adjusted the offerings to be individual so we could be flexible for our clients and afford them the ability to partake in our offerings according to their schedule. There were flutterings of group training working, so it was deceptive that it wasn't working. It took us awhile to figure it out. When expanding something in a new market (or a new service) it’s hard to predict. Now, the medical exercise has begotten us the consumer base for additional budding ancillary offerings: yoga, meditation, physiotherapy, osteopathy, massage, and acupuncture.
The key is not to diversify too much at first. Do what you do and get better at it. The benefits of approaching it that way are: more stability, more alignment with key principles, flexibility to adapt to market changes, and confirming the need of service before investing money and time in it.” 
Side note: If you are working in a company besides your own, the areas listed above need to be addressed with the proper approval. In addition to any areas where you may have authority to make decisions, utilize the list above to brainstorm brand compatible initiatives that you can then propose to management. Find the most receptive person in charge or go straight to the top with your idea of the benefits it brings the organization, and the possible ways you see the idea being executed. Even if the management does not act on the idea, your proactivity and initiative to raise the bar will be noticed.
Conclusion: Do Like the Dumpling Shop
The story of the dumpling shop is no fairy tale. It did not happen by accident or happy coincidence. They did their research, created an excellent product to service the market, marketed wisely, opened where they could get consumer traction, and grew at a rate they could support the start-up costs involved.
Once you define your target market and determine how to best reach your market, offering relevant fee-based services will turn your business from a foundation to a platform for increased longevity. Use the questions and examples outlined above to save time, energy and resources in building the right fee-based services into your business.
-  Email Interview Donna Krech October 2012
-  Phone Interview with Jo Bowskill August 2012
- Thompson, W. PhD. Worldwide Survey of Fitness Trends. ACSM’s Health & Fitness Journal. Vol 15. Number 6, pp9-18. Nov/Dec 2011
- Webster, S., Halvorson, R., Keller, J. 30 Ways to Make More Money: Win the Leverage Lotto! IDEA Fitness Journal. pp 56-69. July-August 2012.
- Vogel, A. Helping Clients End Buyer’s Remorse. IDEA Fitness Journal. pp 26-28. September 2012.
- Gregory, A. How to Increase the Perceived Value of Your Services. http://www.sitepoint.com/how-to-increase-the-perceived-value-of-your-services/
- Marketing the Fundamentals Part 1 Source: http://www.oup.com/uk/orc/bin/9780199557448/palmer2e_ch01.pdf
- Brown, D., Brown, C. People Rarely Value What They Do Not Pay For. http://www.whatisyourplan.com/media/PeopleRarelyValueWhatTheyDoNotPayFor.pdf
- Fischhoff, B. Furby, L. Measuring Values: A Conceptual Framework for Interpreting Transactions with Special References to Contingent Valuation of Visibility http://sds.hss.cmu.edu/risk/articles/MeasuringValues.pdf
- No Author Cited. Price Tag Can Change The Way People Experience Wine, Study Shows http://www.sciencedaily.com/releases/2008/01/080126101053.htm