Gym incentive problems

Traditional gyms are never going to provide an amazing customer experience. The incentives just don’t line up.

To understand how a business will behave, ask: where does their revenue come from? You can be damn sure that they will tend towards activities that help this. Anything else is a luxury or a distraction, so it’s likely to fall by the wayside.

How does this apply to gyms?

Traditional gyms make money by signing people onto long contracts. You can tell this is true because of the amount of effort and expense they spend on getting new customers in the door: big, lavish open days; waiving the signup fee;1 friend referral programs; first X months free deals; etc. etc.

But once you are in the door, they have made all of the money from you that they are going to, at least for a year (maybe two).2 3 How much you exercise or how pleasant your experience is during a single visit is absolutely immaterial to that year’s bottom line.

Which is a problem for you. Because what you want in a gym – not too crowded, clean bathrooms, well-maintained machines and facilities – is expensive. And expenses that aren’t directly tied to revenue are usually unpopular with management.

Contrast this to, say, a cafe. At your local coffee shop you want: delicious coffee, friendly staff, pleasant decor, and not to have to wait too long for your drink. And these factors directly influence revenue for the cafe.

If the place you’ve found looks dirty, or if you are waiting for half an hour just to get your americano, or if the baristas are surly, you might not even set foot inside in the first place. Or if you do, you are very unlikely to return – and with that decision, the cafe’s ongoing revenue has immediately dropped.

As such, cafes that don’t prioritise providing a good experience to customers won’t be in business for long, and the ones that do an excellent job of this will be rewarded. That is, the incentives of the business are aligned with yours as a customer.

Better incentives for gyms

So how do we solve this lack of incentive alignment for gyms? We need two elements:

  1. The gym should make more money if customers have a good experience during an individual visit
  2. The gym should make more money the more successful customers are at meeting their exercise goals

One option I can imagine is some form of contract by which you pay the gym according to how well you meet your goals – per kilogram lost, or per millimetre of bicep circumference gained, or whatever. Combine this with some form of penalty for missing scheduled workouts, so that you were financially incentivised to stick to your commitment, too. The ratio between what the gym earns in the success state versus in the penalty state needs to be high enough that they are much better off when you succeed – otherwise you risk creating a world where the gym can make good money by making it more difficult or less appealing for you to visit!

If you have other ideas, let me know – I live in hope that we can transform the fitness industry within my lifetime!