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.