If I wanted to know something about a song, I may ask a musician. If I was interested on the design of a house, I may ask an architect. I’ve been working and studying the world of business for quite awhile now and I want to uncover a few dirty secrets that companies don’t want you to know about. I will disclose that these tactics ARE legal and they don’t violate any laws except preying on the foolishness of their customers. The first thing we are taught in any basic business class is that the goal of any company is to make a profit.
THE GYM MEMBERSHIP
According to the International Health, Racquet and Sportsclub Association (IHRSA), 32.8 million Americans belong to a gym. That’s roughly 11 out of every 100 people. A sad sentiment if you consider that we are one of the unhealthiest countries in the world buts that’s a different topic for another time.
According to the International Health, Racquet and Sportsclub Association (IHRSA), 32.8 million Americans belong to a gym. That’s roughly 11 out of every 100 people. A sad sentiment if you consider that we are one of the unhealthiest countries in the world buts that’s a different topic for another time.
There are 29,000 gyms in the US and it is a $700 million dollar a year business. We are talking big bucks here. In the late 1980’s Boxing Gyms and YMCAS were being outperformed by places like Golds, LA Fitness, 24 Hour Fitness, Ballys and others. The perception is that more gyms would equal more fit Americans but that is far from the truth. More Gyms actually meant more money lining the pockets of wealthy gym owners. Good for them bad for you.
Let me explain how this works. Mr "X" buys a Gym in your local neighborhood. They recognize that their gym can only handle 250 people at any given time. One would think that they would only issue 250 gym memberships. The reality is that owner’s membership capacity is infinite. We must first recognize that not all 250 people will be working out at the same time. We must also recognize that Americans join a gym with the intention of working out frequently but that frequent work out turns to an occasional workout then it turns into a rare workout and eventually ends as no workout. It’s human nature. We get bored, we don’t see immediate effects and we simply don’t find the time.
This brings me to the ultimate dirty secret. Gym owners don’t care about fitness. They just want your credit card. Obviously these owners are bright enough to know that you simply are not going to stick to frequent workouts. After you initially register, the gym owners could care less if you ever walk through that door again. Why? Because they have your credit card and they know you will hold your membership despite not using their facilities. Thus you become an ideal member. You become a steady revenue stream that is unengaged to the gym and your infrequent visits allow them a bigger capacity to recruit more people whom they hope will give up on the workout too. It’s how they grow their business.
This is where I answer your question, "Where is the proof?" Example 1: When I joined a gym a few years ago, I asked them to send me an invoice for my $35 monthly fee. They refused. They said "for my convenience they wanted my credit card. That way they can deduct each month and I wouldn’t have to worry." Translation. If I stopped working out and still received invoices, I wouldn’t pay. This would ultimately lead to an unprofitable business model for the gym. Instead I paid my fee and worked out three times a week. I did this for 3 months. Then I worked out twice a week for 3 months. Then I worked out once a week for three months. Then I realized that I didn’t have the time. So I cancelled my membership. Except they even made that process as difficult as possible so they can milk a few more months out of you before your cancellation is confirmed.
I happen to be diligent with those things. My roommate at the time was not. He joined the same gym at the same time as me. This was almost 4-years ago. Last week he called me and asked how he could drop his membership from this club. I said to him "You are still working out there?" He said he has only gone 3 times in the past 4 years. I then did the calculation. He spent $1680 in membership fees in the past 4 years. He has worked out three times. That means he averages $560 every time he has used the gym. Now how dumb is that?
Not as dumb as you think. You may say why doesn’t he look at his credit card statements each month and cancel earlier.?There are two main reasons why he didn’t and for that matter many others don’t check. Firstly, CNN Money reports that the average American has $8,000 to $10,000 worth of credit card debt. When you have so much revolving debt you lose focus on what’s on your bill and you become trained on making minimum payments thus accruing pointless purchases like gym memberships that you don’t utilize. The other reason why a person never drops their membership is that they truly believe they are going to get back to frequent workouts. That almost never happens but by cancelling your gym membership you are pyscologically saying to yourself "that you are giving up." As dumb as it may sound, even if you hardly workout, you can always feel better in a conversation when you say "I belong to a gym" even though you can’t follow-up that remark by saying …"and I go often."
In a way I am committing a similar infraction. I personally pay $1000 a year to belong to a synagogue but I only go twice a year. In my case it may sound like $500 per visit but here are the differences. I pay my $1000 with the full intent on not going to synagogue often. I view it as a charitable donation to keep the Jewish community around me alive and vibrant. I know it’s a non-profit organization that will enable me to write off my membership as a tax write-off each year as opposed to giving a really smart business man my credit card and telling them to charge that card every month until I get off my lazy butt and cancel.
In conclusion, I will say that I have since joined a new gym. I still have my credit card charged each month but I know that the day I stop going, I will remember to cancel my membership. I applaud the savvy model of the gym owner. Its a very profitable venture but when I walk in the door and they are offering me add-ons or promoting bagel / pizza nights at the gym, I know its more about bringing in membership and less about getting America healthy.
