This article was published on January 25, 2011

Brilliant: Gym makes you pay more when you DON’T go


Brilliant: Gym makes you pay more when you DON’T go

It’s the time of the year when everyone signs up for a yearly subscription to their favorite gym that more often than not, are only used a couple of weeks but due to laziness, busy schedules, or whatever reason are completely neglected throughout the year. Two Harvard graduates, however, are determined to change that.

Gym-pact is the brain child of Yifan Zhang and Geoff Oberhofer, who thought of an effective way to motivate people to visit the gym regularly. According to Zhang, one of the problems is that most members see gym membership fees as money spent, or “a sunk cost, especially if you pay at the beginning of the year.’’

Gym-pact offers what Zhang calls “motivational fees” where customers agree to pay more if they miss their scheduled workouts. They came up with the concept from their behavioral economics class in Harvard where they were taught that people are more motivated by immediate consequences than future possibilities.

True enough, after thinking about it, it’s more difficult for for anyone to have to dish out cash while missing a gym session rather that say, gaining a couple of pounds, a bigger waistline, or other health consequences that may or may not even happen in the future. This might not be a crazy idea after all.

Basically, Gym-pact operates by negotiating a group rate with Planet Fitness, then paying off the membership fees for participants. They will agree on a weekly schedule and if the members miss a session or opt out of the program for unexcused reasons, they will have to pay. That money will be used to pay for more gym memberships and to build a financial aid fund. The company will eventually make money from referral fees and revenue-sharing affiliate programs with gyms.

The founders plan to tweak the fee structure to allow it to be customized to a customer’s goals. Future iterations may include a combination of discounted gym memberships and smaller penalties that apply daily rather than weekly.

This just might be the gym program that will be get me back into shape. Gyms could really learn a thing or two from this and I hope to see more of it around the globe.

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