Ask an owner how he arrived at his price and the usual answer is that he looked at what the other academies in town charge and landed somewhere near the middle. That is a reasonable place to start, and most academies start there. The problem is that most of them also stop there. Years later the price is still the number the market average happened to be the day they opened, and the owner has no idea whether it is right, because he has never had a way to find out. He has a feeling that he could charge more, and a stronger feeling that he might lose people if he tried, and the two feelings cancel out into leaving it alone.
There is a better way, and the number it runs on is one you may already track. It is your closing ratio: of the people who come in for an intro, what percentage sign up. That one number, read correctly, tells you whether your price is too low, where the market's price actually is, and when you have gone a step past it. The rest of this piece is how to read it.
First, the thing it depends on
The closing ratio only measures price if everything else is held still. If one coach runs intros on Monday and a different coach runs them on Thursday, if some weeks the new person gets fifteen minutes and some weeks gets a wave toward the mat, if the close is sometimes "do you want to sign up" and sometimes nothing at all, then the ratio is measuring the process, not the price, and nothing below applies. A ratio that swings from 60 to 90 week to week is not a pricing signal. It is a process that has not been built yet.
So the precondition is an intro and sales process that is professional, consistent and repeatable. Not ours. Yours. The method does not care what your intro looks like; it cares that it looks the same every time, because a measurement is only a measurement if the thing being measured holds still. The same length, the same person or the same script, the same information in the same order, the same close, the same price stated the same way. Whatever you have decided a new person should experience in their first visit, decide it once and run it that way for everyone, so that when the ratio moves, you know what moved it.
For what it is worth, here is what we run, and the library piece called The Intro Class lays it out in full. Every new person gets the same fifteen minutes, covering what Jiu-Jitsu is, what it will do for this specific person, what a blue belt is and how it is earned, and what being a blue belt will mean for them. Then the same close every time, which is not "do you want to sign up" but "do you want to be a blue belt." The price is stated plainly, once, and it is the same for everyone; another library piece, Never Negotiate Your Price, makes that argument in full. If your intro is different and it works, keep it. The only requirement is that it is the same tomorrow as it was today.
Once your process, whatever it is, has run the same way for a couple of months, the closing ratio stops moving around and settles at a number. That number is the first thing you need, and it is the only thing in this piece you cannot shortcut. If you do not have a repeatable intro yet, build that first and come back. The pricing method is useless without it, and worse than useless, because it will have you raising and lowering prices in response to noise.
To be precise about what the method needs, it is the stable ratio, not the written process. The process is how most academies get a stable ratio and how they know what moved when it moves. But if you have been winging the intro for years and your closing ratio has nonetheless sat at 80 or 90 for three months or more, the number is stable and you can run the experiment. Do one thing first: write down what you actually do with a new person, however informal it is, before you take the first step. Not to change it, but so that when the ratio moves you can check whether you did. Without that, a drop after a price step could be the price or could be the month you got busy and started skipping the sit-down, and you will have no way to tell them apart.
Who this is for
Before the method, a word about where you have to be standing to use it, because the ratio only tells you about price when price is the only thing it could be telling you about.
The owner this piece is for is sitting at or near the market average, say $150 a month in a town where that is what academies charge, with a repeatable intro process that has been running long enough to settle, and a closing ratio that has settled high: 80%, 90%, or better. That owner has a question he cannot answer any other way, which is whether the market would pay more, and the ratio is the instrument that answers it. The rest of this piece is for him.
If you are at the market average and your ratio is 50 or 60%, this piece is not for you yet. A market-average price is not keeping people from joining; something in the intro, the follow-up or the close is, and raising the price would be adjusting the wrong dial. Fix the process first. When the ratio comes up, come back. The good news is that the same work that fixes the ratio is the work that makes the pricing method usable, so nothing is wasted.
And if you priced yourself well above market from the start, $250 or $300 in a $150 town, and you are closing 50%, you have a harder problem, which is that the ratio cannot tell you why. It could be the price. It could be the intro. Two things are unusual at once and one measurement cannot separate them. The honest move is to hold the price, take the intro process apart and rebuild it until it is consistent, and only then read the ratio. If it climbs toward 70 with the price unchanged, the price was fine all along. If it does not, you have your answer about the price, and you can walk it down a step at a time the same way this piece walks it up.
The pattern in all three cases is the same. The ratio is a measurement of one thing only when everything else is already handled. Market-average price, settled process, high ratio: that is the condition under which the number means what this piece says it means.
What the ratio is telling you
Two definitions, so the numbers mean the same thing to everyone. Show rate is the percentage of booked intros who actually walked in; a healthy one is about 80%. Closing ratio is the percentage of those who walked in and signed up. The closing ratio is the one this piece is about, and the benchmark we hold clients to is 70%. Seven of ten people who come in and sit through a proper intro should join. Below that, something is wrong with the intro, the offer, or the price, in roughly that order of likelihood.
Here is the reading that is easy to miss, and I missed it for years. A closing ratio well above 70, say 90% or higher, is not good news. It means almost nobody is saying no, and when almost nobody says no, price is not part of their decision. You are below the number at which anyone in your market has to think about it. Every one of those nine people would have said yes at a higher price, and the tenth probably would have too. A 90% close rate is the clearest signal an academy gets that it is underpriced, and the reason it gets missed is that it feels like success. It is success at the wrong thing.
I can say that because I did it. For most of the late 2010s and into the early 2020s my own academy sat at about $150 a month, and my closing ratio was over 90%, month after month. I was proud of it. I was a little cocky about it, if I am honest. I would not let anyone else run an intro, because why would I hand that to someone who might close eight out of ten when I was closing nine? My whole mindset was "do not leave money on the table," and I ran every intro myself to make sure nobody did. It did not occur to me that the money on the table was the price. Nine out of ten people were saying yes to $150 because $150 was not a number anyone had to think about, and I was reading that as a sales skill. It took me until about three years ago to understand what the ratio was actually telling me. We raised the price for new members, a step at a time, and today the academy is between $200 and $215 a month with a closing ratio of 73% this year to date. Same intro. Same room. The only thing that changed was that I stopped treating a number nobody said no to as a number to be proud of.
A ratio in the mid-seventies means something different. One in four is saying no, and the three who say yes are the ones who valued what you showed them at the price you named. That is what a market price looks like from the inside: not everyone, most. The people who join at that number are not joining because it was cheap. They decided. This is where you start reading each step carefully, because the top of the ladder is close.
And 70%, one in three saying no, is the floor. Below it the room starts filling with people who hesitated, and the measurement stops being clean, because at that point you can no longer tell whether price or something else is turning people away. You can land on 70. You do not go past it.
And a ratio that falls well below 70, after a price change, with the process unchanged, tells you the step was one too many. That is also useful, because it means you have found the edge, and the edge is a fact about your market that you now know and your competitors are guessing at.
The method
Raise the price one step at a time, for new members only, and hold each step until you have enough intros to read it. At each step, do one multiplication: the price, times the number of people out of a hundred who said yes. That is what a hundred intros are worth at that price. As long as that number is going up or holding steady, take another step. The first time it drops, go back one step. That is your price. And whatever the number does, never let the closing ratio fall below 70. That is the whole method, and each piece of it matters.
New members only.
Existing members stay where they are, with ordinary inflation-rate increases and nothing more. The ladder is climbed by the people walking in, not the people already on the mat. A structural raise pushed onto existing members buys a wave of cancellations and a story that follows the academy around for years. Grandfather everyone. The new price applies to the next person through the door and no one else.
One step.
A step is roughly ten percent. On $150 a month that is $15; on $200 it is $20. Smaller steps take longer and tell you less per step; larger steps risk jumping past the edge and having to come back. Ten percent is the size at which the ratio moves enough to read and not so much that one bad step costs a season. Whatever the step, the price is still stated plainly and not negotiated. A raise you then discount is not a raise; it is a worse version of the old price.
Hold it.
This is the part that takes discipline, and it is covered in its own section below, because the amount of time a step needs is longer than most owners want it to be.
Read it, then decide.
Two numbers, written next to each other every step: the closing ratio, and what a hundred intros are worth (price times the ratio). If fewer than one in five is saying no, a ratio above 80, step again; the market has not started reacting yet. Once one in four is saying no, a ratio around 75, slow down and read every step: look at what a hundred intros are worth. If it went up or stayed about the same, step again. If it dropped, go back one step and stay there. And if the ratio itself is at 70 or below, stop regardless of what the money did. Before blaming the price for any drop, check the process first: did the show rate fall, did someone else run the intros, did the script drift? A change is a price signal only when nothing else moved.
Closing ratio = members signed ÷ intros that showed. What a hundred intros are worth = price × closing ratio
The math, done honestly
The usual way to sell this idea is "do the math," and the math is worth doing, as long as it is done all the way through, because the first number it produces is smaller than people expect and the real gain is somewhere else.
Take a hundred intros, and take my academy, since I have already admitted what it did. At $150 a month and a 91% close, ninety-one people join and the academy adds $13,650 a month. At $215 and a 73% close, seventy-three people join and the academy adds $15,695. That is $2,045 more a month from the same hundred people walking in, which is a real number. But it is not the first thing to look at, because on a smaller step the revenue gain is small, and an owner who stops at the revenue line will shrug at the early steps and never take them.
Keep going. The $215 academy has eighteen fewer members to teach for more money. Eighteen fewer people on the mat at peak, eighteen fewer to coach, correct and retain, eighteen fewer parents to answer, eighteen fewer bodies in a room that has a ceiling. The hour has the same number of minutes either way; at $215 each of those minutes is worth more than a third more. And the seventy-three who joined are a different seventy-three. They are the ones who heard the price and said yes anyway, which means they walked in having decided, and in our experience the member who decided stays longer than the member who got a deal. The ninety-one were a room where a chunk of the people were there partly because it was cheap, and cheap is the first thing a member re-evaluates when life gets busy.
Put a value on a member and the picture sharpens. A member is worth, on average, his dues divided by the monthly churn rate, because that is how many months he stays. At 6% churn a member stays about seventeen months; at $150 that is $2,500 and at $215 it is $3,583. The cohort of seventy-three is worth more than the cohort of ninety-one over its life, and it costs less to serve. The figure below runs my ladder, with every assumption on it, so you can check the arithmetic by hand and then swap in your own numbers.
The price ladder on a hundred intros, using my own academy. The first row and the last two are what happened; the two middle rows are reconstructed, because I was not writing the steps down at the time. The method is to find yours.
Look at the column headed "100 intros are worth" and read it top to bottom. On every ladder it does the same thing: it goes up, then it goes flat, then it drops. The climb is the stretch where the market is not reacting to price yet. The flat part is the top, where each step trades members you have to serve for members who chose you, at about the same money. The drop is the step too far. You stop at the last step before the drop, and the shape tells you where that is; the number does not have to be guessed in advance.
One thing to be honest about. On my ladder the money is still rising at the last step, but the ratio is at 73, three points from the floor, and I stopped there. That is what the top of a ladder looks like from the inside: the money has not fallen yet, the floor is right there, and one more step would almost certainly cross it. After three years of climbing, this is the price.
Why this takes longer than you want
Here is the part that gets skipped. A closing ratio is a percentage, and a percentage of a small number is mostly noise. Ten intros in a month, nine sign up: 90%. The next month ten intros, seven sign up: 70%. Did the price move the ratio twenty points, or did two people happen to say no? With ten intros, you cannot tell, and if you act on it you will be adjusting your price in response to two people's Tuesday.
The arithmetic of small samples is unforgiving. At a true 70% close rate, a month of ten intros will land anywhere from five to nine signups most of the time, purely by chance. That is a reading of 50% to 90% on a price that did not change. To tell 70 from 80 with any confidence you need something like fifty intros at the same price, and to tell 70 from 75 you need more than that. The practical rule: do not read a step until it has at least thirty intros behind it, and treat fifty as the number at which you can trust what you see.
What that means in calendar time depends on your volume. An academy running ten intros a month holds each step for a quarter, minimum, and the full ladder from $150 to $200 takes most of a year. An academy running forty a month can read a step in six weeks and climb the ladder by summer. Neither is a problem. The method is not a promotion; it is a system that runs in the background of an academy that is already operating well, and a year spent finding the real price is a year that pays for itself for as long as the academy exists.
Two more things to hold still while you read. Season, because January and July do not close the same and a step that spans the change will mislead you; compare against the same months last year if you have them, or hold the step long enough that the season washes out. And the person running the intros, because a new coach on the intros is a process change, not a price change, and the ratio will say so.
The second number to watch
The closing ratio measures a decision made on the day, in the room, with the coach in front of them. It cannot see what happens on day forty-five, when the second payment comes out and the new member looks at it differently than he did at the intro. Someone can say yes to $215 because he is excited and the number felt fine in the moment, and find out a month later that it does not fit. He does not show up as a no in your closing ratio. He shows up as a cancellation.
So a price step has to be read against two numbers, not one. The closing ratio tells you whether people are still saying yes. Early churn, cancellations inside the first one to three months, tells you whether the yes held. If you take a step and the ratio stays fine but cancellations in the first ninety days start climbing, that is a price signal too, and arguably a more expensive one, because you paid to acquire those members and spent coaching hours on them before they left. Watch the early months specifically. A member who leaves in month eighteen is leaving for the reasons members leave; a member who leaves in month two, after a price change, is often telling you about the price.
Ideally you are already tracking this. The library piece The 11 KPIs Every Academy Should Track lays out the full set, and churn and cancellations are on it; an owner running that scorecard will see an early-churn bump the month it happens. If you are not running it yet, the minimum for the ladder is two columns alongside the closing ratio: cancellations within ninety days of joining, and the month they joined. That is enough to see whether a step that looked fine at the intro is leaking out the back.
The same rule applies here as everywhere else in this piece: check the process before blaming the price. Early churn also rises when onboarding slips, when a new member goes three weeks without anyone learning his name, when the first class he attends is not the one he was promised. If those are steady and the only thing that changed was the step, the step is the likely cause, and the response is the same as for a falling ratio: go back one and hold.
What 70 is not
It is not a target to drive the ratio down to, and it is not where the money is highest. On my own ladder the money was still rising at 73, and I stopped anyway, because the floor was three points away. Seventy is the floor: the ratio you do not go below even if the money is still holding, because below seven in ten the measurement stops being clean and the room starts filling with people who hesitated. The actual stopping point is wherever a hundred intros stop being worth more, which on the ladders we see lands between one in four saying no and one in three, a ratio of 75 down to 70. If yours stops at 76 and you are happy with the price, you are done. Nothing says you must take the last step.
It is not a verdict on the people who say no. At the right price a third of the people who walk in will not join, and that is the system working, not failing. The ones who say no at $200 were going to be the first to leave at $150. Let them go find the academy down the street that is still closing at 90.
And it is not a number for the whole academy. The ratio is measured on new members and the price is raised on new members. Existing revenue moves at the inflation rate and no faster. Over a year or two the room turns over and the new price becomes the price, without a single existing member being asked to pay more than they agreed to.
Leave the door open
The method above has a quiet dependency. It says existing members get ordinary inflation-rate increases and nothing more, and that only works if your membership agreement allows an increase at all. A majority of the ones we see do not. The price is written in as a number, the agreement renews month to month at that number, and ten years later the owner is charging what he charged the day he opened, which is now a discount of a third or more in real terms, and he does not know how to raise it because nothing he ever had anyone sign said he could.
So, whatever price the ladder lands on, write the agreement so that the number can move. This is not a term length question. We do not recommend year-long contracts, and you do not need one; a month-to-month agreement can say, plainly, that rates are reviewed annually and adjusted for inflation, or that rates increase by a fixed small percentage each year on a stated date. Three percent, five percent, the published inflation figure, pick one and put it in writing. The member reads it when he joins, when the number is small and the room is new to him, and the increase arrives later as something he already agreed to instead of something being done to him.
Then do it. An increase that is written in and never applied is the same as one that was never written in; the room learns that the price is fixed, and the first real increase lands as a betrayal. Apply it every year, on the date, in the amount, with a short notice beforehand. A three percent increase on $150 is $4.50 a month. Nobody leaves over $4.50. People leave over a $40 jump after eight years of nothing, which is what the owner who skipped the $4.50 eventually has to ask for.
The ladder finds the price for the people walking in. The inflation clause keeps the price honest for the people already there. An academy that runs both never again has to wonder how to raise its prices, because the mechanism is built into the agreement and the method, and the owner is never the one who has to bring it up.
Where the price meets the room
The closing ratio tells you what your market will pay. It does not tell you whether that price, times the members your room can hold, is enough to run the business. That is a different question with a different answer, and the two have to agree.
The library piece What Your Rent Says You Should Be Making sets the standard we use: a healthy academy's total occupancy cost, rent plus the common-area charges and the insurance on the space, should be about fifteen percent of revenue, so the revenue the academy needs is its occupancy cost divided by 0.15. An academy paying $4,000 a month all in needs about $27,000 a month to be healthy. If the ladder lands at $200 and the room holds 150 members at most, the ceiling is $30,000 and the standard is reachable. If the ladder lands at $140, the same room tops out at $21,000, and no amount of marketing fixes that, because the problem is the price times the room, not the number of people walking in. The ratio finds the price. The standard tells you whether the price and the room are a business. Run both.
What to do this month
· Pull the last ninety days: intros that showed, members signed. Divide. That is your ratio.
· If it swings widely month to month, stop here and fix the intro process first. The number is not readable yet.
· If it is steady and above 80, raise the price one step, about ten percent, for new members only. Existing members are untouched.
· Hold the step until at least thirty intros have come through it, fifty if you can wait. Do not read it early.
· Read it. Above 80, step again. Near 70, stop. Well below, go back one, and check the process before you blame the price.
· Watch early churn alongside the ratio: cancellations inside the first ninety days, by the month they joined. If they climb after a step and nothing else changed, treat it as a price signal.
· Check the result against the room: new price times the members the mat can hold, against rent divided by 0.15.
The owner who does this ends up with a price he can defend, because it was not guessed, copied, or inherited. It was measured, one step at a time, on the people who actually walked in. That is the only pricing authority there is, and it is sitting in your intake log right now, waiting to be divided.
Open Minds. Open Mats. Open Source.