Monday, 17 May 2010

Gym 2.0 : Expanding Contracts

Anna goes to join a gym, and as well as taking a quick profile test to check her exercise aspirations, she is asked how long she would like her membership to last. She thinks six months is a reasonable commitment, and that sounds fine for the club too. She asks about cancellation, and they tell her that she can cancel whenever she wants, with one month’s notice and no quibbles.

What if her motivation wanes? As well as regular newsletters posted through her favourite social network, she will receive tweets or texts to remind her if she hasn’t visited for a few weeks. Furthermore, after three months absence, the club will warn her, and then cancel her monthly payment*, at the same time sending her a few free guest pass credits.

This is the club of the future, a club that has supreme confidence in its staff and systems and their ability to motivate members. Its business model is not to continue taking money from inactive members, as they only spread a negative message. Nearly all new member sales are referrals by existing members, whose reward is that their friends are now at the same club. Staff are rewarded for retaining members, but their real motivation comes from seeing their members achieve results and enjoying their time in the club.

There a lot of debate about gym memberships at the moment, particularly related to length of contract, automatic renewal, and notice period.

Many large chains currently offer a minimum twelve month contract; the only choice is whether to join at one or multiple sites. If there’s a facility near your home and work, then the choice is made for you, and if not, there’s really no choice.
Smaller clubs also get driven down the contract route, particularly if they outsource collections to a Direct Debit agency, as the membership contracts are defined by the service provider.
Yet some new budget clubs and many local authority and trust run clubs offer a wide choice of memberships, from Pay & Play, Monthly, Annual, etc.

The future of gym membership will be about choice. And more choice will be a very good thing for the fitness industry in the long run.

*cancelling payment was suggested during a recent discussion with the director of a local council (the discussion was before the bar had opened!)

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