Gym pricing

Earlier this evening, I went to check out a gym here in Gurgaon. The place itself was fairly nondescript – basic and decent but nothing extraordinary. What wasn’t nondescript was the price chart.

Monthly: Rs. 1800

Quarterly: Rs. 3600

Half-yearly: Rs. 5000

Annual: Rs. 7000

The amount of discount you get as you sign up for longer periods is stunning. One explanaitonis that atrition rates (for customers) are really high in businesses such as gymming. People regulalry promise themselves that they will do this and that, rather, they make resolutions. And one of the most popular resolutions is to become fitter. To join a gym. And thus, gyms can bank on people to make this kind of an irrational decision and sign up for a longer tenure than necessary and make money out of not helping people become fitter!

However, the attrition rate that the gym seems to be pricing in while setting their prices seems ridiculously high. By looking at the rates, they are betting that people who take up an annual subscription won’t attend the gym for more than three months. People who take a half-yearly thing will stay for a little more than two months.

This kind of a high attrition rate being priced in to the discount is quite worrying. It makes me think as to whether there is something wrong with the gym, because of which they are making the longer-term plans so attractive. And also from this perspective, the one-month plan looks like a real rip-off. The gym definitely doesn’t look as if it is worth Rs. 1800 per month. The discounted rates, however, look fine.

I’m wondering what to do. In the next couple of days I plan to check out one or two more gyms, and then come to a decision. However, if I decide upon the gym I saw this evening, I don’t know which plan to take. Surely there must be something that forces high attrition rates there, that the discounts are so high? But the one month thing looks like a rip-off. I don’t know what to do.

PS: if you know of any good and reasonable gym in Gurgaon, which is not too far from my place (DLF phase 5), let me know.

7 thoughts on “Gym pricing”

  1. Gyms in singapore (atleast the one I know) have not got any chart or even a brouchure displaying their prices. They ask for the person to come over an talk to a ‘membership consultant’ to get the right program for the person.
    Not sure if this is for tailoring hte services to individual needs or infact for first degree price discrimination (e.g. for personal training the trainer slashed the price by almost half when I indicated his initial price might be too much).

    1. it’s obviously an exercise in differential pricing. the whole point of you meeting the membership consultant is to find out your willingness to pay, and if that is profitable for them, to charge you that much

      1. the only thing that could go against first degree price discrimination (ie. charging diff to diff ppl based on willingness to pay) in this case is that it would harm the credibility of the gym in case the members “talk” to each other about the price they are paying

        First degree price discrimination would only work in one of 2 cases
        1. The customers dont interact; hence dont know wot others have paid (cant think of any example here)
        2. Its a one off transaction for a product or a bunch of products (e.g. an auction)

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