Episode 337: Stop Competing on Price

Stop Competing on Price: Why Boutique Studios Win on Value, Not Discounts

Are you lowering prices to keep up with bigger studios or competitors? In this episode, Christa Gurka explains why discounting is one of the fastest ways for boutique fitness studios, Pilates studios, PT clinics, and wellness businesses to hurt profit and attract the wrong clients.

If you run a small, high-touch business, you do not compete on price—you compete on precision, personalization, and results. Christa shares how to position your business as the premium choice so clients stop price-shopping and start valuing your expertise. 

In This Episode, You’ll Learn:

•  Why lowering prices is a race to the bottom 
•  The difference between a commodity business vs. a premium service business
•  How boutique studios can outperform larger competitors 
•  Why bargain hunters are often the hardest clients to retain 
•  How to use niche positioning to become the obvious choice 
•  Signs your business is underpriced 
•  Why premium clients buy based on trust, not discounts 

Key Takeaway:

Your goal is not to be the cheapest option. Your goal is to be the clearest and most valuable option for the right client. 

Perfect For:

•  Pilates studio owners 
•  Boutique fitness businesses 
•  Cash-based physical therapy practices 
•  Wellness entrepreneurs 
•  Service providers wanting higher-value clients 

Connect with Christa:

Follow on Instagram: @christagurka
Listen to more episodes of the Female emPOWERED Podcast for business growth strategies for women in wellness.

Transcript

Speaker 0:50

Welcome back to another episode of the Female Empowered Podcast. I'm your host, Christa Gur ka. I'm very excited for this episode. I've been talking about this for a long time, and so this episode is specifically to help boutique fitness, Pilates, pt, wellness, or other high touch service businesses. Understand that lowering prices is not the way to grow instead. We must position ourselves as more specialized, more personalized, and more valuable. When we're small, we do not compete on price. We compete on precision. So let me tell you something that I see all the time. You have a small studio owner who goes on Instagram. This might have happened to you today, yesterday, a different day, but sometime soon.'cause I see this all the time in our mentorship programs. You open Instagram and you see a new studio or just another studio offering two weeks unlimited for$49. Or you see another physical therapy practice offering free consults or discounted packages, and immediately you think maybe I need to lower. My prices too. And before you know it, you're charging less, working more, and somehow making less money than you were before. And this my friends, is the trap. You cannot compete on price when you are a small, high touch business. It is a race to the bottom. You cannot out cheap. The bigger guys. You just can't. The giant studio with multiple locations, each with 16 reformers, 30 plus employees, a corporate team and venture capital money behind it can always charge less than you. The big PT chain with 12 to 15 therapists and five locations can always run a bigger promotion. But that does not mean that they are better. And you know this, it means they are playing a different game. We as small boutique businesses are playing a value game, not a volume game. We are playing a value game, not a volume game. Alright? So if you are small, you need to stop trying to win the volume game. You need to create your own game of value, okay? Because I don't want you to compete on price. I want you to learn how to compete on precision because boutique services, fitness, and wellness services are not commodities. The biggest mistake I see in boutique business owners is making. Their service feel like a commodity. A commodity is something that feels interchangeable, that you can get anywhere. And like corn from Publix, which is a grocery store here in Florida, is gonna be the same as corn from, winn-Dixie, maybe. Okay. Gas is a commodity. A gallon of milk is a commodity. Commodity. A basic gym membership where nobody knows your name and you just go into and you get to use equipment. That's a commodity. When something is a commodity, the buyer usually picks which one they're gonna go with based on price. I'll go with. Crunch Fitness over Youfit because it's price, it's basically the same thing. It's a gym commodity. Okay. That's just a general example. Okay. But our businesses are not commodities. So if you own a. Four to six reformer Pilates studio. A cash-based physical therapy practice, a concierge wellness business, a med spa, a small boutique fitness studio, a personalized personal training gym, A specialized women's clinic. Your clients are not buying exercises or treatment. They are buying support. Standards, expertise, accountability, personalization, and individualization, and faster results they are paying because they want someone who knows exactly what to do for them, specifically because you are the expert. People will pay experts for general advice, but they don't wanna pay generalist for expert advice. So B, the experts. Let's take two examples. You have Studio A. Okay, let's take a Pilates studio. So Studio A has 16 reformers in their location. They charge$24 a class. They don't have someone sitting at the front desk. Okay? So you walk in, you check in, you scan a code, you check in. You have four influencers setting up their lighting and their tripods and nobody knows your name. The instructor just got started teaching a week ago. You maybe have a shoulder injury and now you're basically on your own.'cause the instructor has, is picking exercises off of YouTube. Then you have Studio B, which has four or five reformers, right? That studio charges$48 a class. The instructor knows your name. They know that you have scoliosis. They remember your shoulder issues. They modify the workout accordingly. So all four or five of those people feel like they got the exact workout they came for. They check in with you after class. They have a front desk person who knows your schedule. These, my friends are not the same product. They might both be Pilates, but they are not the same product. So why then do small studios try to price themselves like those big box studios? Especially now with all the money coming into the industry that is like a private chef trying to compete with Costco samples that is like Gucci. Selling their hand stitch handbags for the same price as the ones you can buy and target. They're not the same. They're not the same product, and there are people out there that value that type of precision and expertise and individualization. So that's who you have to go after. Here's what happens when you do compete on price. This is why we say it's a race to the bottom. So you lower your prices. You're like, oh, I don't know,$45 seems a lot. I'm gonna lower them to 40. Then the bigger competition's we're gonna lower our pricing and we're gonna do an unlimited special for.$200 a month. Then you're like I gotta go lower now. Let me add a discount. And then they start offering free months. Eventually, everybody is working harder for less money. You as a small boutique business, do not have enough margin, do not have enough profit in your business to offer those kind of discounts, nor should you, because the value. Is high touch, high value. The problem is that low price clients are the hardest to retain, and usually, by the way, the hardest to serve. Have you ever noticed that the people that ask for discounts are the ones that are the hardest? They complain the most. They give you the most headache about what they're getting. The people that are like, give me the link, pay in full, those are the best people. They understand the value. Clients who stay the longest, who are your best retained clients, your biggest advocates get the best results. Not because they are buying you because they're the cheapest. They're buying you because they trust you. They know you will get results. I'll give a perfect example. I pay$25,000 to be in a mastermind. A business mastermind where I learn all the things. They have three calls a week. This week. I will not be on a single call last week I don't think I was in a single call. I don't look at that and be like, I'm not using this. I'm not using this, so this is a waste of my money. No. I look at this and be like I've learned so much in the program that I can buy back my time and I don't have to be on those calls to get the benefit of the program. It has still been super valuable to me. So one of the things I see in Pilates happen over and over again is you get people that have intro offers that are$49 or$39 because they think a lower intro offer will attract more people. And while, yes, you usually get more people that come in, you also get bargain hunters, people that want the$39. And then as soon as you say our package starts at 300.$39 to 300 is a big jump. They do not convert. They do not stay. They complain about the pricing, and then the owner ends up exhausted trying to serve more people for less money. I love an intro offer that's closer to the cost of a real package,$99 for three group classes or four group classes. And then the next four month, four class a month membership is 1 29 that you're gonna get a different type of person. You don't want bargain hunters coming into your studio. You want people that can actually afford your services, and if they're looking for something. Cheaper. They can go somewhere else to find it cheaper. Oftentimes the value is not there. So if they're like, but I know I, that place is great, but I don't get the type of quality. Yeah, that's why you come to us and that's why you pay a little bit more, but you get a bigger return on your investment in the end. So one of the things I want you to think about is in your messaging, especially if you're running ads you wanna use negative keywords like affordable, cheap, free, low cost. You are not low cost, you are not cheap. Instead, let's use messaging like especially if you have a four or five or six. Reformer studio, and now you're competing against studios that have 10, 12, 14. You can say more affordable than a private session, less crowded than a group session. Okay. Or more indivi individualization than a large group or former studio. That's the messaging you want. And you can also call out very specifically who you're looking for. Private feeling Pilates for women over 50 with back pain, who wanna stay strong and active. That's a completely different clientele than Pilates classes. Who exactly are you going after? Call them out directly. And here's where I like to talk about like the red ocean versus blue ocean strategy. So I've talked about this a little bit before. Definitely in our mentorship programs, but I think also on the podcast, so there is a business concept that's called Red Ocean Strategy versus Blue Ocean Strategy. The Red Ocean is where everybody is doing the same thing. They have the same offer, they have the same audience, they have the same marketing, they have the same pricing, so everyone is fighting over the same clients, which is why they call it the red ocean. It's like shark infested waters, and they're all feeding on the same thing, and so that's why it's red. Okay. That's the idea, the concept. So you're all fighting over the same type of clients, right? And usually in that, the fight becomes about price, right? Again, race to the bottom. So then you have. The blue ocean, right? If you swim over here to the blue ocean people carve out their own lane. You become known for something very specific. So Pilates for women with osteoporosis, pelvic floor PT for active moms. Strength training for women over 50. Semi-private Pilates for people with pain, PT for runners training for their first marathon. Pt. For runners that wanna move from weak weekend warriors to elite athletes, you are no longer interchangeable with all of those other offer. You were no longer one of the. Top 10 or 15 options, you are the option. You are the expert. And that is one of the things we did at Pilates in the Grove, where we really presented ourselves as we are the Pilates studio that has physical therapists teaching Pilates classes. So if you have injuries, if you're recovering from. An injury, if you have special considerations, are pregnant, recovering from pregnancy, we have more knowledge than your average fitness person because we have all the, these physical therapists that are teaching the classes and training the rest of our staff. All right, so when you become the obvious expert, or you are the person to solve the problem, people stop comparing you to the cheapest option. They compare you to what's the alternative if they don't invest with you? So the alternative could be if they go to use their insurance in an in-network physical therapy practice where they're being seen with four other people, it could take them longer. To get better, and maybe they don't get better at all. Maybe they continue to have this nagging pain over and over. Where as if they go to the expert that maybe charges$250 an hour, their symptoms could resolve in four to six sessions. So you're not being compared to price, you're being compared to what happens if they don't invest with you, if they stay stuck in the same place. Now another thing that goes with messaging is, semi-private sessions versus group classes. When people think of group classes, most often they think of an actual group class. If I go to my lifetime, Jim and I take a class, I could be in class with probably 66, 0 other people, sometimes five zero people in yoga. All right, so that's what they're thinking of in a group class. And so in Pilates, especially when we can only have, even large studios only having 10 or 12 reformers, they're more like small groups and if you have four to six, you're probably more like a semi-private session. So again, when you own a smaller boutique studio, your pricing should not look like the big box studios down the street. Especially if you have limited space and you're offering a very high touch service, one instructor to four people is very different than one instructor to 12 people. So if a 12 or former studio is charging$28 a class, you cannot, as a four reformer studio run profitably on$28. Unless you don't have rent or your people are working for free. And you should not because the class is not the same. Lean into what makes your class more valuable. Four person semi-private session, 45 to$55 a person. Small group physical therapy pods. So again, maybe this is a, if you charge two 50, but not, people are like, I don't really need the two, the private. Excuse me, one-on-one anymore. Maybe you can charge four people$60 and now you're at,$240. So you're getting the same price for the hour. The clients are getting it for a little less expensive and everyone is happy. So you just wanna think outside the box. Think outside the box, and let math be your friend. All right, so when your clients are happier, they still get the attention, especially if they've been working with a therapist for a long time. And now that therapist is seeing three people at the same time, they usually grow some community what's the word I'm looking for? Like community within that pod. And then they've been working with you for a long time, so you can make modifications very easily with those clients. Excuse me. You're not discounting, you're repackaging it. You're creating a better offer, not a cheaper one. So how do you know if you are underpriced? Here are a few signs that you are competing on price instead of precision. You constantly get asked about discounts. When are you running your next discount? Are you offering anything a special anytime soon? Another way to look is you, are your schedule's full? You're booked, but you're still not making profit if your supply, no. If your demand exceeds your supply, it's time to raise your prices. So if your schedule is full and your profit is low, your pricing is probably off. You are afraid to raise your prices because you think everyone will leave. A lot of people think that we superimpose our feelings onto our clients, and feelings are not facts. You compare your prices to other competitors instead of your actual value and expenses. It's okay to look at other people's prices just to know what the market will tolerate. And I can tell you people pay anywhere from$20 to$300 for Pilates. I know people that are running 12 reformer studios that are charging$50 a session. I also know people that charge$300 for a private session. So you wanna compare your prices on your expenses, your goals, your needs. And this way you stop attracting clients who are price shopping. So when you're trying to attract a different type of clientele, those that are not price. Shoppers. Those are not bargain hunters. Sometimes pricing might not be your problem. It might be your positioning. So this is where I want you to really get good really hone in on who specifically you help, what specific problem you solve. What is your unique method that is different than everyone else? What is your unique selling proposition? Why your experience is worth more, I will never forget that a friend of mine who was an attorney, I think I've told this story before, and he was charging something like$600 an hour and I was like, oh my gosh. That's amazing. How do you feel? Do you, how did you get to that rate and how do you feel about it? And he said, the truth is I'm so good at what I do, that even at$600 an hour, I can usually save my client's money because I can get done in one hour. What? It takes a less experienced person to do. That, that they takes them three hours to accomplish. So if they're charging$300 an hour and I'm charging 600, I can get it done in an hour and it takes them three hours, which means now the client's paying$900. So that's why my experience sometimes is worth more, right? So I want you to remember a few things. If you remember anything, it's this Never compete on price. Competing on price is a race to the bottom. I'm gonna say it again. Never compete on price. Competing on price is a race to the bottom. The goal in your business is never to be the cheapest option. The goal is to be the clearest option. Because the right client is not looking for the lowest price. They are looking for the person who understands them best and can best solve their problem. So stop trying to compete with businesses that have. More reformers, more therapists, more locations, bigger teams, and bigger budgets. You do not need to beat them at that game. You need to build a business that is impossible to compare to. If you are small, you do not compete on price, you compete on precision, and when you do that, you will stop attracting bargain hunters. You will start attracting people who are willing to pay for the results, attention and expertise that only you, my friends, can provide only you because boutique businesses should never try to be cheaper. We should just try to be better, and that's your goal, not to be cheaper, to be the best. So if this episode hit home for you, which I'm sure it probably did to most of you, I'd love, I would love if you took a screenshot, if you shared it on Instagram, if you tagged me and maybe tagged another business owner. And I really hope you did enjoy this episode. I hope you took something from it. I hope you'd go back to your business and be like, no, I should not compete on price. I'm not gonna keep lowering my standards and my pricing. I'm gonna lean into that. I am the. Best in my area, the best in my business, and I know my value, and I know when I know this, I will attract the right people, the right buyers, the right clients to my business, and into my orbit. And you can do this all my friends. So until next time, bye for now.