Building win-win commercial gyms

- memos

The premise:

Commercial gyms generally want you to buy a subscription and never use it. More than 70 million Americans had a gym membership last year, but only 18% went consistently. All 70 million paid an average of $58 per month for their membership. And if you do go - especially at a reasonable hour - the equipment you need could be occupied. We’re seriously still doing this?

For many, home/outdoor fitness does the job. Many of us are familiar with P90X or, more recently, things like Mirror, that require minimal equipment. And perhaps the pandemic will accelerate the trend towards non-gym fitness. Some may realize that they can do without the membership and prefer the savings and the safety of home.

But for others, home/outdoor fitness won’t suffice. A shared gym, or something like it, is still indispensable for two reasons:

  1. Heavy shit. The stuff you lift to get strong. I’ll focus on barbell training, since those folks are the primary audience for this. You can’t do a barbell training program in an apartment. And unless you have the right space (e.g. garage or basement with high ceilings), can put ~$2000 towards a power rack with all accoutrements, and expect not to move in the foreseeable future, you can’t train with barbells anywhere else either.
  2. Not working out by yourself. Some of us appreciate working out amongst others doing the same, or we just like getting out, and places like gyms are good for serendipitous acquaintances. 

So: gyms are useful but, in their current version, often unsatisfying. Is there a better, software-enabled way forward?

Yes: On-demand, a la carte equipment. Software could turn win-lose dynamic into a win-win dynamic.

Book the equipment you want. Pay only for what you use (e.g., squat rack for 30 minutes), at a price based on supply of and demand for desired equipment at the desired time.

On-demand booking would give gyms a clear sense of what equipment people want, and when they want it. 

When consumers head to the squat rack on Wednesday at 6pm, find it busy, and move onto plan B, this “message” may get lost or otherwise fail to influence equipment selection. They may gripe and fume to themselves, but in the interest of getting home, they do a different workout and leave. Not that gyms would necessarily care much if the gripers were to speak up, since gyms make so much money on getting people to sign up without showing up.

I think many people aren’t getting what they want, and gyms either don’t know or don’t care. But maybe there is a world, not too far away, in which gyms adjusted supply of equipment, or the price of using that equipment, according to demand.

I’d certainly pay more if I knew I could have a squat rack on Wednesdays at 6pm. Presumably gyms would take my money in exchange for this privilege. And if a dynamic price does its job as a signal of demand, maybe these gyms would get some more goddamn squat racks!

Gyms often make equipment purchasing decisions based on what will drive new (and unused) subscription sign ups, rather than what will get utilized and satisfy members that, you know, actually go to the gym. This is sad.

May be worth noting that the ‘campers’ - you know, the guys who get to the gym at 4 and stay for three hours - might be quite unhappy about this. For the same price as the rest of us schmucks, they’ve been getting primo access. 

But with on-demand booking, the silent gripers - who I believe outnumber the campers - will finally get what they want, and gyms will be able to charge them for it. Win-win.

Question marks:

If you’re a gym, would you trade your “no-show revenues” to see how much more you can make from the silent gripers? 

So how big is this group of silent gripers, how much more are they willing to pay? What will it take for them to develop some class consciousness? :) 

I think there is a game-theory dimension here. If you’re a gym, and as long as your competitors rely on no-shows the same as you, there is no reason to change. If one gym in an area were to adopt the on-demand/a la carte model, the silent gripers and the no-shows would vote with their feet, and the rest of the market would have no choice but to follow.