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Comparing two gym business models, the point is that Planet Fitness charges $10 a month and stocks unused equipment on purpose, since 92% of members never show up and effectively subsidize the 8% who do, which raises revenue per square foot more than optimizing for engaged customers.

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Key takeaways

  • Gym owner A might have 150 customers making $15,000 [music] a month.
  • Gym owner B, after the same period, might have a few thousand customers at $10 [music] a month.
  • Gym owner B is actually the Planet Fitness business model.
  • 92% of their customers actually never [music] set foot in the gym.

Chapters

  1. 0:00
    Abschnitt 1 Two people want to start and grow their gym.

Full transcript

Locally archived YouTube transcript with timecodes. Speakers are assigned heuristically and may be corrected editorially.

1 segments

0:00Two people want to start and grow their gym. Person A, the target customer is a gym goer. Stocks their gym with all the most commonly used equipment for people who go to the gym and charges 50 to 100 bucks a month. Now, gym owner B, the target customer is someone who doesn't go to the gym. Stocks the gym with all the least used equipment for the average gym goer. Gives out unhealthy food like pizza and bagels for free and charges $10 a month. Gym owner A might have 150 customers making $15,000 [music] a month. Gym owner B, after the same period, might have a few thousand customers at $10 [music] a month. Gym owner B is actually the Planet Fitness business model. 92% of their customers actually never [music] set foot in the gym. So, the 92% actually subsidize the 8% who actually show up. And that business model worked because they figured out their revenue per square foot went up dramatically when they optimized not for the people who attended the most, but the people who were willing to pay and continue to pay and at a price point they wouldn't cancel. After decade plus of growing multiple hundred million dollar plus companies, I created a scaling road map that can show you exactly where you're at and what you need to do next and it's absolutely free and you can figure it all out in 30 seconds or less. Just comment map.