Some Perspective on Dues Value

Fitness facility operators are pretty smart when it comes to membership dues pricing. At least when compared to most members who sign up for club memberships.

Our industry has talked for years about how to make people understand the “value” of their memberships. It’s said that the industry has underpriced its services, which has led to the perception that a membership is really not worth that much. But, are memberships really worth the average $50 or $60 a month being charged?

In recent years, there has been more and more talk about charging users on a pay-as-you-go basis. Most facilities offer the option of paying $10 for a visit, without signing up for a membership. Others are starting to offer some or all of their services as pay-as-you-go only. But, wouldn’t it seem logical that fitness facilities would make much more money by charging people that $10 usage fee for every workout?

Not so. According to a paper published in 2002 by researchers at the University of California at Berkeley, when people purchase a membership, they actually believe they will go to the club more often than they do. So, they assume that the monthly rate they are paying is a good deal. But what the researchers found was that most members only use the gym an average of 4.8 times per month. If the monthly membership dues are $60 a month, that means that the average member is paying about $17 per visit. That’s $7 more than the $10 daily use fee.

Another study performed in the Boston area and reported on in January in the Chicago Tribune turned up the same findings. Researchers looked at 8,000 fitness center memberships over a three-year period, and found that most people never make it to the gym three times a week (like they thought they would); instead, they only work out about one time per week. These researchers also figured it to be about $17 per visit, and concluded that 80 percent of the people studied would have been better off paying the $10 daily fee instead of purchasing a membership.

Fitness center operators know this. Read my blog entry The Big Fat Truth About Health Clubs. So why, then, at all of the industry trade show seminars on customer service, are the speakers always recommending that staff get on the phone and call members who aren’t coming in? Health club operators know that that would be foolish. Even an article in the Financial Times this past January highlights why fitness center dues structures rely on those members who sign up and never use the facility. They don’t want to remind these members that their money is being wasted.

So, the whole argument about value is really not true. As the UC Berkeley researchers conclude, most health club members either make “time-inconsistent choices” or they have “limited cognitive abilities.” Pretty smart on the part of club owners, huh?

Murphy’s Law

Some of our readers don’t like it when FM columnist Rob Bishop gets exasperated by the fitness industry. Those readers should probably skip this blog post.

Thanks to Murphy’s Law, it’s difficult to understand why fitness facilities offer amenities. Why bother going above and beyond when there is so much potential for it to blow up in your face?

Senior Editor Anne McDonnell and I puzzled over this question at the Athletic Business Conference in Orlando, Fla. Some readers stopped at our booth and commented on her article about towel service, and we said it was tough to find the upside to offering that amenity. It seemed like lots of work for little to no return. The readers confessed that the only reason their fitness center had a towel service was because members expected it. And, every good club strives to meet — even exceed — their members’ expectations. Right?

I would like to put it out there that some expectations are, perhaps, better left unmet. Why? Because of Murphy’s Law.

You opened a daycare center? Some kid will bite another kid and you’ll get sued. You invested in a snack bar? One of your members will get food poisoning. You forked over a ton for a fancy locker room? It’ll still get robbed.

Stopping an amenity once you’ve started offering it is a difficult proposition, and not one I’d care to advise any fitness facility on how to do. But I would suggest that, before you start thinking about all of the new extras you can give members, think twice. Three times. Maybe even four.

And then forget about it altogether.

Exercise for Cash

Need motivation to exercise and eat right? How about cash? The British government is offering just that with a new program it is launching.

A health adviser to the government explains that children in the U.K. will receive taxpayer-funded financial bonuses into their state savings accounts if they maintain a healthy lifestyle. The payments into the Child Trust Funds would leave healthy teenagers with more cash than their less-fit peers when the tax-free policies mature on their 18th birthdays. Children who get immunized, walk or cycle to class, and take other healthy steps will get bonuses to their so-called “baby bonds.”

The idea came from Julian le Grand, chairman of Health England. Grand also said that healthy eating at school could be rewarded by linking swipe cards to the program. Exercise among young people could also be monitored, perhaps through pedometers or devices attached to bicycles, he said.

It’s about time, right? Fitness centers do all they can to motivate members, but most classes, programs, etc., only go so far. What if insurance companies actually paid people to work out, or at least made their insurance coverage much cheaper? The idea isn’t new, but the British government has finally made a serious gesture in that direction.

Fitness centers would definitely benefit from a plan such as this, since working out in a facility would be easier to track then, say, wearing a pedometer.

But a similar program in the U.S. isn’t going to materialize on its own. Facility owners, healthcare providers and all healthy-minded people need to work to make it happen.

We all know that most people need motivation to exercise and eat right. Maybe money will finally be what tips the scales in the right direction.


P.S. Happy St. Patrick's Day!

Child's Play

With the Centers for Disease Control estimating that between six and 19 percent of children are overweight, and an additional 15 percent at risk for becoming obese, I think we need to ask ourselves: What can the fitness industry really do to make a difference?

I guess the first thing we have to understand is, “What is the problem?” Why are so many kids fat? Of course, discussion about this has been going on for years; the biggest culprits appear to be junk food, entertainment options that cause kids to sit for hours and hours, and school funds cuts, which have resulted in the elimination of physical education programs.

It’s been a while, but I do remember being a kid. My friends and I had junk food and ate it, albeit our junk was more in the form of sugar rather than in fat; in fact, our almost daily outing after school was to the local drugstore to purchase our favorite candy, and then proceed to eat it -- all. And, at meals, our parents made us eat everything on our plates. As for entertainment, we didn’t have all of the options that kids have now, but we did have music and television, and even “back then,” those were distractions from being outdoors with our friends -- or, in other words, being active. And those P.E. programs? They were no incentive to exercise at all. Almost every kid I knew hated P.E.; it was punishment. Yet, still, the percentage of children back then who were obese comes nowhere close to what that percentage is today.

So, why are kids so fat today? Well, many say that kids just don’t partake in as much of the good, old-fashioned fun that children used to crave. The kind that happens after school and on weekends when kids and their friends get together and roughhouse, grab the bikes and head to another friend’s to get a pick-up game together, or head down to the river, lake or beach to check out the scene. It’s not that these options don’t exist anymore. I still see kids in my neighborhood outside riding their skateboards, chasing each other around, playing basketball, etc. It’s just that, I believe, there seems to be a different perception of what is “fun.” The newer entertainment options have made good, old-fashioned fun seem sort of “hum-drum.”

The question is whether the new facilities geared specifically toward kids’ fitness that are springing up across the country are what this population needs to stave off the obesity crisis. The facilities I am talking about include those such as Volt Fitness and Intelligent Sports’ Youth Fitness Centers.

Volt Fitness is a new video arcade/gym concept in Glen Rock, N.J., which was created by a pediatrician and former fitness director, and combines circuit training machines with video games. They’re marketing the concept to pre-teens and teens who pay $10 to $15 an hour to “work up a sweat while playing video games that require them to ride an exercise bike, work out on a rowing machine or engage in a simulated boxing match.” The idea, apparently, is “to get the kids moving so that they will have a change in mind-set -- a paradigm shift in how they view exercise.”

Intelligent Sports’ Youth Fitness Centers in Upland, Calif., provides youth and family fitness equipment and programs “to allow kids to grow athletically and intellectually, and to fight childhood obesity.” The facilities, which are membership-based, are designed for kids and include exercise equipment that is interactive with several popular video game titles from PlayStation and Xbox.

Interesting concept for a whole new type of fitness facility market, but is it just a new business model that will attract only active youth? Or, could it succeed in having an effect on the child obesity epidemic?

Controversy: Is It Worth It?

I’m not Catholic, but even I have an issue or two with the Equinox Fitness Club ad that’s gotten Boston’s Catholic population’s rosaries in a twist.

The ad ran in Boston magazine, and is pictured left. Three attractive nuns are sketching a chiseled, nude man, while another presses her body against a metalwork door and watches.

Forgive me, but what does this have to do with fitness?

The company told the Boston television station WCVB that, “Our ad campaigns are based on personal motivation and fantasy and, throughout history, the body has been considered a form of art.”

Um … could they repeat that, please? In English? I’m still not clear what this ad has to do with fitness.

It seems obvious that Equinox was hoping to ruffle feathers, get some free press and maybe even attract a fallen angel or two wanting to lose a few pounds. But, for the company to pretend that the ad serves any purpose other than provocation is, quite frankly, insincere.

Of course, this begs the question: Is there anything wrong with that? People in Boston are talking about Equinox — and there’s only one Equinox facility in the city, so it stands to reason that its profile has most definitely been raised. And isn’t that the purpose of marketing, after all?

Perhaps. But, is it worth it? I don’t have any numbers handy, but it’s my understanding that Boston is a pretty Catholic town. Why risk alienating such a large population of potential members? C.J. Doyle of the Catholic Action League of Massachusetts is fired up about the ad, saying it is “exploiting and mocking and sexualizing Catholic religious imagery.”

For their part, the local nuns have risen above the situation. “It is crass, but there are a lot of crass things that I don’t pay attention to,” Sister Martha Moss told WCVB. Sister Kathryn Hermes added, “We know that these things come and go, and the best thing is to let them go.”

It’s too bad Doyle can’t count to 10 and realize his reaction plays right into Equinox’ publicity-seeking hands. See, if everyone followed the nuns’ examples and ignored the ad, then Equinox’ attempt to get free press would go straight to … well, you know.