A VIEW FROM
Have you ever noticed those gyms with a huge glass window in front? Did you notice how they never seem to be full? Did you ever wonder how they manage to make money? Prime location, attractive decoration, lots of brand-new equipment, all barely used.
But if they’re not full, how do they make enough money to survive?
The answer is they make their money by encouraging membership from people who don’t want to go to the gym.
But how can that make sense? They must make money from people using the facilities? Not really; think about it. What is the capacity of the average gym, 300 if it was absolutely jam-packed?
But if 300 people turned up they’d be so packed no one could get on the equipment. And 300 people couldn’t even fit in the changing room all at once. And if they only had 300 members, they couldn’t make enough money anyway. So that’s not a very sensible business model. Planet Fitness is a typical example. They have a 300-capacity gym, but they have about 6,200 members.
That’s right; they have more than 20 times as many members as they can handle. But how can that work? Obviously, most of those people hardly ever go to the gym. And that’s exactly why gyms are designed to look the way they do.
They’re designed to attract people who like the image of belonging to a gym, but not the reality of sweaty workouts.
So, on display are the sofas and cappuccinos, juice bars, massage chairs, spa treatments, breakfast bars, huge TV screens. This all looks very attractive, relaxing, fun and enjoyable. Nothing to do with sweat and strain, hard work, aching muscles and being out of breath. All the nice parts without the nasty reality of the actual workout.
Gym designer, Rudy Fabinno, says the image gyms are after is like coffee shops, bars, hotels and restaurants.
It’s the opposite to most retail brands: they want to encourage trial, not repeat purchase.
That’s why the model that works is gym membership paid once a year in advance.
Kevin Volpp, of the Wharton School, calls this pre-commitment.
The image on sale is beautiful people relaxing in a pleasant environment. People are willing to pay a year ahead; they think it will encourage them to come along. They’ve paid for it, so they think they’ll be more likely to go. And it’s easy to sign up for the attractive lifestyle on display.
But after one visit, they don’t want the actual reality of constant, sweaty hard work.
So they keep the gym membership open and keep promising themselves they’ll go.
Every week they promise themselves they’ll go, but every week they don’t go. And, because they don’t go, these thousands of overweight and unfit people aren’t on display at the gym.
What is on display is the few healthy people who do go regularly. Who are fit and toned and attractive.
They, along with the sofas and juice bars, become part of the image that is on sale. The overweight, unfit people are never there. Because, in their heart of hearts, they don’t want to go. But they don’t cancel the membership, because that would be an admission of giving up. Of admitting that they are never going to go. And those are the majority of people who most gyms want to attract. People who will pay for the product but not use it. So the gym gets the money and never has to supply anything for it.
Because the consumer doesn’t actually want what they’re paying for. It’s a fascinating business model. It depends on selling people something they don’t want and will never use.