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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.

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