Is your New Year’s resolution to lose weight or workout more? Did you just sign up for a gym?
If you answered yes then you might want to read this…
Most businesses don’t make money if their customers don’t show up. A restaurant can only be successful if its customers are inside and eating. A store is only successful if its customers are inside shopping. In nearly every industry, more customers equals more success.
But for gyms, that equation is flipped around.
In fact, the most successful gyms have built their business model around taking our money, and then keeping us away.
From design to pricing to free bagels, gyms want to be a product that everyone buys, but no one actually uses. Ever wonder why you signed up for that expensive fitness club, but haven’t gone in the past 3 months? Well it’s not entirely your fault. Planet Money explains how gyms do it. See below for Planet Money’s 15 minute podcast (transcript) or scroll down for the rest of the article.
1. Gyms have built their business model around us not showing up
Gyms have way more members than they can actually accommodate. Low-priced gyms are the most extreme example of this.
Planet Fitness, which charges between $10 and $20 per month, has, on average, 6,500 members per gym. Most of its gyms can hold around 300 people. Planet Fitness can do this because it knows that members won’t show up.
After all, if everyone who had a gym membership showed up at the gym, it would be Thunderdome. If you are not going to the gym, you are actually the gym’s best customer.
2. So gyms try to attract people who won’t come
If you haven’t been a “gym person” in the past, chances are good that paying for a gym membership won’t change that. Gyms know this and do what they can to attract people who haven’t traditionally been gym rats.
Instead of displaying challenging equipment like weight benches and climbing machines in plain view, gyms will often hide weight rooms and other equipment in the back. Many gyms now have lobbies that are designed to look like hotels and fancy restaurants.
“For the longest time, the design was around the sweat,” says Rudy Fabiano, an architect who designs gyms all over the world. “Twenty-five years ago … clubs could be very intimidating. Remember there were the baggy pants that everybody had and the bodybuilders would bring their own jug of water?”
Once gyms started looking more like hotels, coffee shops and restaurants, people who weren’t bodybuilders started feeling comfortable in gyms. The casual gymgoer was born.
3. Our brains want to be locked into annual contracts with gyms
Normally, we hate being locked into long contracts (cellphones, cable packages), but gym memberships are an exception.
“Joining a gym is an interesting form of what behavioral economists call pre-commitment,” says Kevin Volpp, director of the Center for Health Incentives and Behavioral Economics at the Wharton School. Volpp says we actually like the idea of being locked into a gym contract … at first, anyway. “They’re picturing the ‘new me’ who’s actually going to go to the gym three times a week and become a physical fitness machine.”
We convince ourselves that since we have committed to putting down money for a year, we will make ourselves go to the gym. And then, of course, we don’t.
4. Just when we try to get out, they feed us, massage us and ply us with alcohol
Gyms have big issues with retention, and most lose around half their members every year. Once we realize that we haven’t been going to the gym, even $20 per month can feel like too much. To try to combat this, gyms look for ways to offer value to customers who aren’t necessarily into working out. Planet Fitness has bagel breakfasts once a month and pizza dinners. Those are its busiest times. It also has massage chairs. Other gyms have mixers and movie nights and spa treatments.
5. Without slackers like us, gyms would be a lot more expensive
The reason gyms can charge so little is that most members don’t go. People who don’t go are subsidizing the membership of people who do. So, if you don’t work out, you are making gyms affordable for everyone. If you are one of the brave few who actually do go to the gym, you are getting an amazing deal.