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CNN business
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US gym memberships typically cost about $50 per month. Boutique gyms and high-intensity classes operate at twice or three times his size.
planet fitnessHowever, we do offer a $10/month membership for 30 years. The no-frills gym chain hasn’t raised its prices, making it one of the few offerings for the same price, even though the prices haven’t changed. best inflation decades.
Planet Fitness touts $10 gym plans in commercials that include an annual fee and free workouts, and the company has long been a sponsor of New Year’s Eve celebrations in Times Square, prompting people to come up with a solution. It’s making me think about signing up for a membership.
Its almost divine $10 price has become a key part of the company. brand positioning As an accessible, ‘non-judgmental’ club that encourages casual gym-going. A Planet Fitness member typically sees him 5-6 times a month, but about 60% of them he doesn’t go 30 days in a row.
“It’s a very powerful marketing tool,” said Simeon Siegel, who runs the company at BMO Capital Markets. The $10 price is right on his sweet spot, he said. Planet He’s cheap enough to attract people who want to get in shape to fitness, and just as importantly, it’s not expensive enough to cancel if you don’t go often.
For $10 a month, infrequent users were more likely to say they belonged to the gym and keep the membership, he said.
With a $10 membership fee that can be canceled at any time, Planet Fitness uses it to attract people who are interested in exercising but have never been to a gym, intimidated by other gym fitness fanatics, or more expensive clubs. We are looking for people who can’t afford to buy. The company believes $10 is the gateway for the roughly 80% of Americans who don’t belong to a gym.
This inexpensive gym membership model is known in the fitness industry as high volume, low cost, or “HVLP,” but it also appeals to parent-accompanied high school students, college students, and people recovering from injuries or surgeries. adjusted to. Rick Caro, president of Management Vision and longtime fitness industry consultant, said:
Planet Fitness CEO Christopher Rondeau said:
(PLNT)has grown to more than 2,300 gyms nationwide, reaching a record 16.6 million members last quarter. “I’m not going to spend $50, $60, $70 trying something for the first time,” he said.
Planet Fitness has no plans to increase the $10 price any time soon. Instead, get a $24.99 monthly “black card” membership in exchange for more perks to keep the price down.
“If I can stay on $10 longer, I can keep people off the couch, try fitness, and create more value on the black card,” Rondeau said.
A higher monthly plan gives you access to all Planet Fitness gyms and perks like water massage beds, massage chairs, tanning equipment and more. Black Card members can also bring visitors.
With over 60% of members enrolled in this tier, Planet Fitness increased the price by $2 per month at the beginning of the year. The average Planet Fitness member pays about $17.60 per month. This allows the company to keep the lower plan at $10.
Raymond James analyst Joseph Altobello said:
To appeal to the occasional gym-goer, Planet Fitness clubs have more cardio and light-intensity equipment and fewer heavy free weights than many of their competitors. It has a “Rank Alarm” to discourage so-called “Rank” behaviors such as grunting and grunting and keep people from dropping weights.
Planet Fitness has benefited from fitness industry consolidation during the pandemic.
About 25% of US gyms and studios About 10,000 facilities were permanently closed during the pandemic, according to industry groups. Several large chains have filed for bankruptcy, including 24 Hour Fitness and Gold’s Gym.
However, Planet Fitness did not permanently close its gyms during the pandemic. This is largely due to the franchise gym model, with some gyms being owned by private equity groups.
The company is also taking advantage of Americans trying to get in shape in the aftermath of the pandemic.According to Placer.ai, which tracks foot traffic to retail stores, monthly visits to gyms in the United States increased by 2019 increasing year by year.
Despite the rise of Peloton and the at-home workouts that many have become accustomed to during the pandemic lockdown, at-home exercise is no threat to Planet Fitness’ $10 model.
“It’s another customer,” Altobello said. “Not everyone has the money or space to build a gym at home.”
