Thomas Plummer: Breaking the Hourly Rate Addiction
This article is an excerpt from The Soul of a Trainer
Getting paid by the hour sounds so logical when you are a fitness professional. If you work for someone else, this method of compensation makes sense because how you get paid is out of your control. If you work for yourself, however, getting paid by the hour is the least effective thing you can do to generate revenue for yourself and for your team.
The problem with hourly pay is that there are a bunch of negatives that kill this method.
Here are just a few to think about:
- There will always be a monetary perceived per-hour ceiling you can charge—either in your mind or in the client’s.
- The client immediately finds an equivalent rate, comparing you to what he pays others in his life who provide an even-vaguely similar service.
- You can only work so many hours per week; therefore, you can only earn so much before you top out your income.
- Selling yourself by the hour always brings the discussion down to money instead of how you can help the client. Why is help in our world limited to one hour at a time? Why is fitness sold per hour and not per solution to a problem? For example, a client asks for weight loss and we turn around and sell an hour. The person asked for a solution to a long-term problem and we come back with an hourly fee.
Let’s say a trainer can charge $100 per hour in her market. In the trainer’s world, this amount is often a lot of money, especially since we currently believe the idea is to charge as much as you can per hour worked. This proves to be an ineffective way to charge anyone, which we will discuss. The trainer says, “I am going to push my rate up to $100 and go for it—the most I have ever charged anyone.”
Most trainers, especially the younger ones, stumble here.
Trainers usually get into the field because they are internally driven people who love helping others. It is a strange comparison, but trainers are like the social workers of the fitness industry. Social workers are usually good people who dedicate their lives to helping others in need, often for extremely low pay. Many trainers love helping and training so much that they will help others for free if necessary. This intrinsic drive is admirable in a trainer, but it doesn’t feed the kids or pay the rent.
The client, on the other hand, often has either direct or indirect knowledge of what trainers in your market get paid and compares your hourly rate to others. You should be the highest priced trainer in your area, but there are limits to how far you can push this concept. Money people who are your training clients understand better than you that the higher the hourly rate someone charges, the higher perception of service and quality that goes with it. This thought is a direct contradiction for trainers, who often feel they have to continually make deals or charge the least in their market to get work. This is often the hardest lesson for any trainer in the business.
Where we fail, and where there is a serious disconnect, is that what we ask for doesn’t usually match the circumstances of the sale. For example, your client wants to hire an attorney. The $50 per hour attorney usually matches the rate charged. Bad suit, small office, no assistant, poor location and little experience are all signs of a $50 an hour attorney. On the other hand, the $250 hour attorney completely matches the rate, working in a big office, with assistants, is often part of a bigger firm with offices in the best part of town, and all the trappings, experience and poise it takes to charge the highest rate in town.
Our trainer, however, is trying to charge the highest hourly rate possible or the highest rate the market will bear, but is trying to sell it in the same context where all the other cheap guys live and work. Our hero wants the most money, but is dressed the same as and works alongside the low-priced guys who sell their services at the lowest price in the market, doesn’t understand added value or building value for the client and simply tries to charge a little more, but does nothing to support the context of being worth more.
It isn’t always what you know; it is how you deliver that knowledge that makes the money.
In the world of attorneys, the range between the lowest and the highest hourly rate can exist because the differentiation is so apparent. In our world, the gap between the high and low a client will accept is often much smaller, because there are often no perceived differences between the players. Your price is based on learning that perception of quality is the real separator in the client’s head in most business transactions.
Another problem with charging an hourly rate is that the client compares your rate to other professionals, and we often fare badly in that comparison. If you charge a $100 per hour, and the client’s chiropractor only charges $65 per visit, you are now being compared to a medical professional. In the client’s head, you are charging more than a medical professional on his team. We can survive this comparison, but our delivery system, which includes the support materials for the client, how we dress and act, where we train the client, the support services we offer along with our training—such as nutrition and all the other small details that make up our product along with the actual training—has to be more distinctive and offered at a much higher level than the other trainers we are competing against.
The need for having a life also works against you charging an hourly rate for your services. Yes, you can work six days a week. Yes, you can work splits so you can be there in the morning and come back in the evening for those later clients. And yes, you can train clients for 40 or more hours per week. The question is, how long can you do this, and most importantly, how long can you do this well?
Your ability to maintain this level of training over a long period of time is limited. The average trainer lasts fewer than six years before burning out. Trying to maintain this type of schedule is the prime reason trainers fade away early.
There are several issues involved here. First, your ability to work past this hour limit will put a max on the money you can make. If you can only work 32 sessions per week, your money ceiling is 32 times your hourly rate, minus your cost of servicing that client. Trainers who want to make more money keep trying to gain more clients and work more hours, but realistically, at some point you will have to take a nap, eat, see your kids, visit your soon-to-be-ex spouse or simply sit somewhere for a few hours with friends to decompress. Whether or not you admit it, there is a limit to the hours you can work, and therefore, the money you can make.
The second issue is that the more hours you train clients, the more ineffective you become. There will be those of you who read this who adamantly deny this and swear, probably at me, that every session you ever offer is the best you can do, and every client gets your best every time you’re on the floor. The passion is appreciated, but sit quietly and ask yourself if that is indeed true. Are you really giving your best every session, every week, every month, year after year? Or are you giving it about 80 percent of what little energy and passion you have left after five years of split shifts, 2,000 meals out of plastic bowls, clients in foul moods, late nights with friends and the fact that you haven’t had five consecutive days off since summer vacation in grade school?
Training for a living, despite what your relatives and friends think, is extremely difficult with a full load of clients. Every client is there to take a little of your energy home with them that day; no trainer, no matter how good, is capable of sustaining that level of commitment year after year without rest, decent food, and a chance to stay fresh and excited.
The answer to all of this is to move from hourly rate to solution-based client sales. There are several ways to get this done.
First, you can switch from one-on-one training as your primary tool and start with small group training with up to four in a group. Your return per hour goes up, the clients get better results over time due to the group dynamic. Most importantly, you can work fewer hours each week and make more money. You also gain the advantage of shifting the focus away from you and to the group, making your job easier and more sustainable over time.
The key to getting started is to switch from per-session hourly rate charges to charging by the month with a 12-month commitment—or at least three months if you are nervous to try this.
You set times on a schedule and the client books the times. The client does not have to bring a friend or fill the slots; she simply goes to your scheduler and books as needed. The average client will train about 9.6 times per month, so you win by accumulating a large receivable base of client money owed to you. The client wins by being able to train as desired, in a group setting with motivated people alongside.
If you don’t want to do it this way, you can sell a solution to a problem. For example, a client wants to lose weight and get healthier. It doesn’t make sense for this client to buy a five-pack of sessions, and it is worse if you discount your services to sell more sessions at a lower rate.
The goal is to net 40% on everything you do, but the long-term move is to build a system where you get paid for what you know, not just the hours you are willing to work each week.
You’re already doing the work; you just aren’t getting paid enough for it.
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