A gymnasium membership in america usually prices round $50 a month. Boutique gyms and high-intensity courses run double and triple that.
Planet Health, nonetheless, has supplied $10 month-to-month memberships for 30 years. The no-frills gymnasium chain hasn’t raised the worth, making it one of many few issues that also prices the identical regardless of the very best inflation in many years.
Planet Health blares out the $10 gymnasium plan, which incorporates annual charges and free coaching, in commercials, and the corporate has lengthy sponsored the New Yr’s Eve celebration in Instances Sq. to get individuals fascinated by signing up for memberships as their decision.
That nearly sacrosanct $10 value has develop into a key a part of the corporate’s model positioning as an accessible, “judgment-free” membership conducive to informal gymnasium goers. Planet Health members usually go 5 or 6 instances a month, and round 60% of them don’t go to in a 30-day stretch.
“It’s a really highly effective advertising and marketing software,” mentioned Simeon Siegel, who covers the corporate at BMO Capital Markets. The $10 value is true within the candy spot, he mentioned: low-cost sufficient to attract individuals to Planet Health who wish to get in form and, equally as essential, not so costly that they may cancel in the event that they don’t go usually.
For $10 a month, rare customers are likelier to carry onto the membership to say they belong to a gymnasium reasonably than give up, he mentioned.
Planet Health makes use of $10 dues, which may be canceled at anytime, to recruit people who find themselves excited about exercising, however have by no means joined a gymnasium earlier than, are intimidated by health fanatics at different gyms or can’t afford pricier golf equipment. The corporate believes $10 is an entryway for the roughly 80% of People who don’t belong to a gymnasium.
This cheap gymnasium membership mannequin – recognized within the health business as excessive quantity, low value, or “HVLP” – can also be tailor-made to attraction to high-school college students accompanied by a mother or father, school college students and other people recovering from an damage or surgical procedure, mentioned Rick Caro, the president of Administration Imaginative and prescient and longtime health business marketing consultant.
“It’s a ‘get you off the sofa’ value,” mentioned Christopher Rondeau, the chief government of Planet Health
(PLNT), which has grown to greater than 2,300 gyms nationwide and reached a record-high 16.6 million members final quarter. “You’re not going to provide one thing a attempt for the primary time and spend $50, $60, $70,” he mentioned.
Planet Health doesn’t plan to boost the $10 value anytime quickly. As an alternative, it’s going to maintain down the worth by getting individuals to commerce as much as its $24.99 month-to-month “Black Card” membership with extra perks.
“The longer I can keep at $10 the higher off I’m to get individuals off the sofa, give health a try to proceed to drive extra worth within the Black Card,” mentioned Rondeau.
The upper-priced month-to-month plan presents entry to all of Planet Health’ gyms and perks like water therapeutic massage beds, therapeutic massage chairs and tanning gear, and Black Card members may carry a customer.
Greater than 60% of members subscribe to this tier, which Planet Health elevated by $2 a month earlier within the 12 months. The common Planet Health member pays round $17.60 a month, serving to the corporate maintain the decrease plan at $10.
“It’s not that totally different from different companies that entice you with a low value level after which upsell you with increased choices,” mentioned Joseph Altobello, an analyst at Raymond James.
To attraction to occasional gymnasium goers, Planet Health’ golf equipment even have extra cardio and lightweight power gear than many rivals and fewer heavy free weights. Planet Health discourages what it calls “lunk” conduct, equivalent to dropping weights and grunting, and has a “lunk alarm” to stop individuals from dropping them.
Planet Health has benefited from the consolidation of the health business throughout the pandemic, which has left the corporate with fewer budget-gym rivals.
Round 25% of US gyms and studios completely closed throughout the pandemic – roughly 10,000 amenities, in response to the business commerce group. A number of main chains, together with 24 Hour Health and Gold’s Health club, filed for chapter.
Planet Health, nonetheless, didn’t completely shut any gyms throughout the pandemic. This was largely as a consequence of its franchise gymnasium mannequin, with a number of the gyms owned by private-equity teams.
The corporate has additionally capitalized on People trying to get in form within the aftermath of the pandemic. Month-to-month visits to US gyms are increased than they have been in 2019, in response to Placer.ai, which tracks foot site visitors to retailers.
Regardless of the rise of Peloton and the at-home exercises many individuals obtained used to throughout pandemic lockdowns, at-home train will not be a risk to Planet Health’ $10 mannequin.
“It’s a distinct buyer,” Altobello mentioned. “Not everybody has the cash or the area to create an at-home gymnasium.”