The gym is an interesting business model. First, it a distinctly modern and distinctly Western institution. Up until recently, people burned enough calories on their jobs to stay relatively fit. Now that work doesn’t involve much physical “work” for most people, we have to supplement our day by working out. And in other parts of the world, people struggle to survive and provide enough food for their families. Here we have such a gross overabundance of calories, we’ve built special shrines called gyms to help burn them off.
Gyms can only successfully exist in a society where four historically rare criteria exist:
- A decent amount of disposable income
- A gross excess of food
- A sedentary workforce
- A culture obsessed with body image
We live in the golden age for gyms, fitness centers, and health clubs. In fact, gym membership is at it’s highest level in the history of the world. But, in a seeming paradox, obesity rates (at least in the US) have reached “epidemic” levels. We’re fitter than ever before and also fatter than ever before. How is this possible?
The answer lies in the sinfully sweet business model of the gym. They sell memberships for $5-200 a month, with assorted “initiation” or start-up fees tacked on as well. Some get creative and sell lifetime memberships ranging from a few hundred to a few thousand dollars. They’re selling access to their state-of-the-art facilities and equipment, to their exercise classes, and to their personal trainers.
But the best gyms are really selling the dream. The dream of a healthier life and a better body. And the dirty part is they know the truth: that most new gym members stop coming regularly after as little as two months. How quickly the dream fades! Because of this, membership sales staffs are tasked with creating a membership roll that is 1000-3000% the capacity of the gym, meaning if the facility has a 100 person capacity, 3000 people could be members at any given time.
Much like satellite radio, the incremental cost of one additional gym customer is nearly nothing. They’ll still have to maintain the equipment, pay the same staff, keep the building clean, etc, but as long as all 3000 don’t show up to workout at the same time, each additional membership is almost all profit.
They scan my card every time I go in, tracking me in their system. Multiply that times hundreds or maybe even thousands of members, and the gym has years of historical data that show how much use the average customer gets out of his membership. Will you be the outlier that goes 4 days a week for 10 years? Or will your resolute workout plan taper off after a few months?
Everyone intends to get their money’s worth, otherwise they wouldn’t sign up. But so few do. Instead of trying to beat the gym at their own game, you might consider asking what their rates are like for single-visits. Rather than signing up for a monthly membership charge, you can pay just when you go in. Or, you can always find ways to workout without the gym: running, walking, hiking, or biking in the great outdoors.
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I recently entered a weight-loss competition. Everyone else joined a gym of some sort. I simply ran regularly and ate responsibly and beat them all. Gyms work for some and not others.
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