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Business Idea: The $12,000 Gym Membership (No, that’s not a typo!)

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Photo: stock.schng - TanjaS

There are two ways to do this idea, both equally interesting.

The basic premise of the idea is this: You take a normal gym membership, say $40 a month, but charge $1,000 a month. I know, it sounds crazy. But there’s more to it. Check this out… The biggest problem with gym memberships is people aren’t motivated to keep going.

In part 1, we look at having your new or existing gym offering such a membership. We’ll call it the “Motivation Option.”

Gyms make loads of income from memberships that never actually get used. How many people paid for a yearly membership, plus setup fee, in January, for a membership that was never used past March (and even *that* is pushing it). Yes, you know who you are!!!

Well this is how it goes… A gym charges $1,000 per month for the membership. But, if you actually show up for your agreed-upon number of workouts, you are credited back a portion, down to the regular $40.

Or even free, since you will likely have quite a few who don’t show up and have to pay the $12,000/yr without using the services.

It’s how Web hosting companies can charge $6/month and offer tons of bandwith and hosting space. Most people use a fraction of what’s offered, and basically are subsidizing the heavy users since it all averages out in the end.

ISP’s/cell phone companies, etc can work the same way.

Anyways, if someone wants to stay motivated, there is no better way than having their money at stake.

Photo: stock.xchng - cwcav

There are a few small challenges with this, where you would be charging up front, in most cases on a credit card, and would have high amounts for refunds (and many merchant accounts charge commissions even on refunded amounts). This could be solved by charging them by check or finding another way to do it. Or simply know that you will be making very little on the clients who actually use the service and end up with the minimum fee. Their $40 membership is 4%, so as long as your merchant account fees are below 4%, you’re making a little bit of profit.

You could find ways to generate additional revenue through personal trainers, etc. Maybe even let them use the credit for services in the gym at a discount.

Though there are details to work out, it is a truly interesting idea.

The hidden benefit of this? Well, as you would be offering regular memberships at regular prices for those who don’t select the “Motivation Option”… Offering something like this would bring AMAZING publicity, especially in the new year. Journalists are always looking for quirky ideas. Send out a news release to local media (or through a news release service targeting your local area’s media outlets) telling them about your $12,000 gym membership. If you make the headline stand out, I can tell you that, having a media background myself, there is no way I could skip to the next news release down the list without reading it if I saw this.

Do you run a gym? Planning on opening one? Might be worth looking at offering an option like this.

In a future post, part 2, we’ll look at another way to play this, which won’t necessarily require a strictly local client base or dealing with any sweaty towels.

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