How Gyms Make Money By Setting You Up To Fail

As the owner of a robust garage gym I don’t spend a ton of time thinking about gyms and their members. That is, until I heard an absolutely fascinating episode of the Planet Money podcast on NPR now (or subscribe via iTunes). The episode covered the tactics that low-cost gyms use to make a fortune on $10 a month membership fees by setting their members up to fail.

Most businesses strive for repeat customers, gyms like Planet Fitness, however, crave members who signup and never set foot inside their doors again.

Why? Because places like Planet Fitness are not actually designed to accommodate the number of people who enroll as members. For instance, the gym used as an example in this episode of Planet Money had a whopping 6,000 members. Yet the facility itself could only accommodate about 300 people at a time. If all the members who signed up actually went, franchise gyms like Planet Fitness would have to charge far more than $10 a month.

Of the members who signup for gym memberships, about one-half never actually visit the gym once.

So, how does a gym like Planet Fitness attract a clientele that’s interested enough in fitness to open their wallet but not dedicated enough to actually show up?

A big part of the equation is design, gyms are meant to look more like bars than places where people do something hard. Simply put, they are made to look unintimidating. They are designed to make out-of-shape people feel comfortable being there, because the gyms know out-of-shape people are not likely to attend frequently once they sign up. They have mirrors, disco music, funky colors, massage chairs and monthly bagels or pizza.

The actual gym part of the gym, the free weights and weight machines, are hidden away from the main part of the gym, back in a more intimidating space.

Low-cost gyms don’t actually want the hardcore fitness types or bodybuilders in their gyms. Those people actually go to the gym more frequently, they put wear and tear on the equipment, they sweat and they intimidate the intended clientele. Planet Fitness is actually famous for kicking out gym goers who make too much noise.

Psychologically, when it comes to gym memberships, contrary to normal consumer behavior, we actually like the idea of long-term contracts. It give us the illusion of being locked into a commitment of going to the gym. The thinking is, “Well, I’m paying $10 a month, so I HAVE to go.” A great thought, but unfortunately it doesn’t work for most.

Speaking of pizza, I always found it strange that many of these low-cost gyms have pizza night or a bagel breakfast once a month. That seems so obviously self-defeating for a gym and its members. But once again, it’s all part of the design. The average low-cost gym loses about half of its members each year, so in order to entice people who don’t go to the gym to sign up for another year they offer free food every once and awhile. At least members get something out of their membership. Many members will attend only on those days with free food, for $10 a month two slices of pizza is better than nothing.

So how does a person find a good gym? Basically, look for the exact opposite. It won’t look like a nightclub, it will most likely look a bit grungy and the first thing you’ll see when you walk in will be iron. It’ll likely cost a good bit more than $10 a month and will be smaller with a lower number of serious members. Oh and some of them will actually kick you out if you don’t attend often enough.

How much does a good gym run? Some can run as much as $500 a month, and if you’re paying that much, you’re sure as hell gonna make sure you get something out of it.

With the New Year and new resolutions, if you decide to enroll in a low-cost gym, consider the very good possibility that you’re almost certainly not going to attend frequently. Perhaps a better idea would be to start a body weight program at home or better yet build a home gym.

1 thought on “How Gyms Make Money By Setting You Up To Fail”

  1. If you read about Planet Fitness and its policies, you’ll find that they offer an assortment of free, fattening foods such as pizza, candy, and bagels. Not everyday, I’ll admit, but it’s still a questionable tactic for a place that has “fitness” in its name. They don’t even urge people to consume moderately, for pity’s sake!

    “You don’t have to eat the pizza!” Planet Fitness defenders say. Strictly speaking, that’s true. You don’t have to eat it, but that doesn’t mean it’s a good idea to offer such temptation — especially since a large number of Planet Fitness members are likely to be struggling with obesity and overeating.

    Why do they offer fattening foods for free? Because their entire business model is centered around attracting people who are unlikely to work out much, while driving away the people who would use their equipment on a regular basis. That’s how they keep their prices so low.

    To drive away the dedicated gym goers, they use derogatory tactics. Their commercials depict bodybuilders as mindless simpletons, slender women as vapid airheads, and Zumba instructors as vicious taskmasters. They state that grunting, even lightly, is forbidden, despite the fact that this is often necessary when lifting heavy. And they forbid some of the most beneficial exercises around, such as deadlifting and overhead presses. Why? Because such exercises are only for “lunks” — or so they claim.

    To attract the less motivated people, they offer free fattening foods. They also tell these people that bodybuilders and their ilk are horrible, mean-spirited people, and that Planet Fitness provides a safe refuge from such despicable human beings. They also create a huge “relaxation zone” filled with tanning beds and massage chairs — the kind of equipment that people will enjoy, but which does practically nothing for one’s physical fitness.
    It doesn’t end there. In the photos section of their Facebook page, they offer a variety of near-useless workout programs. Here is one example:

    Sunday: 10 push-ups
    Monday: 10 minutes tanning
    Tuesday: 20 minute jog
    Wednesday: 5 squats
    Thursday: 10 burpees
    Friday: 15 jumping jacks
    Saturday: 10 minutes hydromassage or massage chair

    It should be pretty obvious to any knowledgeable person that this program, with the exception of the 20 minute jog, is essentially useless. The push-ups, squats, etc would be over in a matter of seconds. As for chillaxing in a tanning bed or a massage chair…. well, how exactly is that considered “exercise”?

    Their motivation is clear. They want to sell the notion that getting fit requires essentially no effort. People who are determined to get fit will recognize this to be nonsense, but the less motivated people find such a message enticing. They’re the people that Planet Fitness seeks to attract with these deceptive, unethical tactics.

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