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Profitable Paradox: How Gyms Thrive on Inactive Subscribers

In this boundless world of fitness and health, the idea of flourishing gyms benefitting from lazy members might sound like a confusing concept. After all, the very essence of a gym is to promote physical activity and a healthier lifestyle. As we explore the complications of the fitness industry, we discover a fascinating and profit-rich paradox. Successful gyms not only embrace but apply the power of inactive members to build thriving businesses. In this blog, let's delve into how gyms have transformed this unexpected prospect into a profitable asset and uncover the intriguing dynamics behind it. What strategies, insights, and secrets can we learn in the process?

The fitness industry has been hit harder than most by the pandemic. It may be in the rearview mirror, but its impact on the fitness world cannot be ignored. Before the pandemic, the global fitness industry had achieved record global performance with total industry revenue of US$96.7 billion in 2019. There are approximately 210,000 health and fitness sites with more than 184 million members. In 2019, more than one in five Americans owned at least one health club or studio in the United States. Membership also increased by 2.7% from 2018 to 62.5 million compared to 64.2 million members in 2019.

Given the rise of health clubs and gyms, it makes sense to see members also increase during this period. Before the pandemic, the fitness industry was growing, increasing year by year, and its future was bright, but 2020 was the year everything changed.

2020 was a challenging year for the fitness industry. It was predicted that the global health and fitness club industry would continue to recover as the industry reopens. Estimations show that the US gym and health club industry lost $13.9 billion from mid-March to August 31, 2020. This is no surprise given that the sudden closure of gyms and studios came as a shock; the industry was not prepared. But with a quick pivot to online services, the fitness industry was able to survive and bounce back.

Amid the pandemic, consumer habits evolved at pace. There is now a greater emphasis on health and well-being. In general, people are investing in various wellness apps, fitness technology, and online fitness services to support their physical and mental health through lockdowns. For many people, the gym is not just about exercise. During the initial lockdown days, the experience was mostly online, making this sentiment even truer. It's a place where people connect, socialize, and work toward their goals.

But here’s the catch. That new member who just signed up for your gym? There’s a 67 percent chance you won’t see them again. It is reported that a full 67 percent of gym memberships go completely unused. But even among those who do use their gym membership, many are not exactly what you’d call regulars. Statistics reveal that 56.6 percent of members use the gym twice a week, 20.7 go once a week, 6 percent go once a month, and 7.4 percent go less than once a month. Considering that a gym membership costs an average of $60 a month, this is a waste. Americans spend $397 million each year on gym memberships they never use.

Why are there so many inactive members right now? There's a specific reason why so many people buy gym memberships but never use them: Gyms love it. One of the attacks on gyms in particular is to single out people who don't like exercise and predict that most of them will stay at home. This allows gyms to hold more members than their facilities can accommodate at any given time. For example, Planet Fitness has an average of 6,500 members, but their gym can only accommodate 300 people at a time. This overbooking strategy not only helps the gym's profitability; It also provides benefits to members who use its membership. The fees paid by members who do not go to the gym can be used as support to reduce the cost of membership.

What benefits do gyms acquire through these members? These members provide a steady stream of revenue through their monthly fees, contribute to reducing overcrowding during peak hours, and indirectly invest in serviceable costs for active members. They offer potential for upselling and data insights for targeted marketing efforts. Inactive members can be part of the gym's community, encouraging brand loyalty and the possibility of reactivation in the future.

In conclusion, it is interesting to know that by adapting their business models and taking advantage of inactive members, gyms not only ensure their financial stability but also continue to play a significant role in the promotion of a fitter way of life. This fascinating dynamic reminds us that innovation and adaptability are key drivers of success, even in the most unexpected corners of commerce. Looking ahead, it will be interesting to witness how gyms continue to leverage this profitable paradox, transforming laziness and lack of consistency into opportunity, and pushing the boundaries of what's possible in the world of fitness and business.

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