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January 5, 2011 / zachfarley

Is Planet Fitness a Scam ?

Ultimately, Planet Fitness is a business (business exist to make money) which is to be understood. In studying their marketing, sales and corporate strategy, you can see how they have grown into a “success”! When you look at the members, there are many underlying psychological theories in play. So, lets take a look at their shady marketing and sales tactics that have led them into becoming one of the fastest growing gym’s in the world.
the road is waiting

In Honor of 2011, here are 11 reasons Planet Fitness is a scam!

1. 10 Dollars a month***?
Planet Fitness has a great marketing campaign along the fact that their monthly cost is just 10 dollars. However, when you look at the fine print, you will see the true cost. They will take an annual fee to make sure you stay “locked in” to your monthly rate. There have been numerous complaints filed and you can hear some of the horror stories here!

Don’t forget the startup fee!

2. The Upsell
With any business, they need to get customers in the door first with that 10 dollar price and then start the upsell. PF clearly looks to diversify their income and they do this by selling other items. If you pay 10/month but then spend another 10 by using their tanning beds, they win. Every time you forget a water and buy one at the cooler at a huge mark up, they are getting more on top of the 10 dollars per month.
The “black card” is 10 dollars more and a very common membership choice. I would love to know the stats of how many “spring for it” Remember, you are uber motivated when you go to sign up at the gym. You are not thinking rationally or month’s down the road. Throw in a free t-shirt, access to other locations and free tanning for 10 bucks more? Why not!

3. The attitude of “its only 10 dollars a month”

In the same vein as college students who slack off because they haven’t paid the tuition bill, the low cost justifies people’s laziness. The student who works extra hours and takes out loans nearly always grinds harder than the trust fund kid who plays video games in his room all day. If you pay more for something, it doesn’t mean it’s better, but you are likely to use it more.

I haven’t gone much yet, but I will someday, its only 10 bucks!

4. Capitalize on the feeling of belonging
People love having things in common with others. “Yeah, I’m a member there!” If your office friend has a membership and you go twice a month with them, why not just keep the membership up. You wouldn’t want to tell them you quit and stopped going there right? You weren’t really “going,” but hey you belonged there and belonging to a gym is cooler than working out anyway.

Last line of PF Mission Statement : You Belong! (For a small fee)

5. Judgment free zone
Really? Because I’m pretty sure your lunk alarm system discriminates against “strong people?” Planet Fitness somehow makes it cool for obese people to walk on a treadmill, yet discourages people who have gotten long term results and are dedicated. Perhaps it is because these people keep coming back and aren’t just a free 10 bucks every month?

6. People LOVE to tell you what a good deal the got!

How much does your gym cost? 80 dollars OMG! I only pay 10 bucks a month!

JD Roth over at  Get Rich Slowly (and Get Fit Slowly) admits to paying almost 200/month to work out at a crossfit gym.  However, in the last year he has undergone quite an amazing transformation. Now, this is a personal finance blogger who has written quite a few posts on frugality. However, frugality doesn’t mean being CHEAP, it means finding value and getting the most out of your dollar. The exercise industry rakes in BILLIONS of dollars a year in just supplements and get thin quick schemes. If you get results, what is that worth to you? Probably more than 10 bucks a month! His main point is cheap things you never use are no bargain!

7. Successful? Get out of here!
People who aren’t winning physically or financially often have negative attitudes. People with a winners mentality see a “rich” or “fit” person and think wow, good for that person. I wonder if they can show me HOW they got fit and if I am on the right path. Negative thinkers, resent these people and either think they cheated with supplements or got the money unethically. In their mind, there is no way that hard work could have factored into the equation. When they come to work out, they get discouraged by seeing success rather than feeding off of it. This is why the Planet Fitness must discriminate against the successful members and keep the “losers” paying.

8. Location, Location, Location.
Remember PF is a business, so they are targeting specific areas and locations where other established gyms have succeeded. My PF came in and undercut a gold’s gym with their strategy and it worked beautifully. Clearly they have researched demographics, market and clients to maximize profits. They have located this specific gym in a decent area with very close access to low income neighborhoods. When a Walmart moves into town and undercuts local business, people flip out. However, PF seems to be off the hook so far!

When a new McDonald’s opens, their franchise fail rate is incredibly low. That is because they are the best in the world at opening locations and understanding stats, traffic patterns and projected sales. They analyze every factor as successful business must. They know who they are targeting and why, rich people don’t often eat at Mcdonald’s and fit people don’t work out at PF.

9. Corporate
Look on the website for a contact form or number to call? Is there a clear way marked to cancel your membership? Voicing a complaint to your local branch is a time waster. The employee’s there are simply cogs in a big corporate wheel. They only know sign up and check in. They can’t help you get up the ladder to someone with decision power.

10. Overcrowding : Great post from Shoemoney about oversell
So if PF has 50 cardio machines that can be used at once, it will still sell as many membership’s as possible. If they can fit 100 people in the gym, they won’t ever cap there sales. Remember, they expect you to quit and be lazy!
They run into a unique problem around Jan 1st. The place is an absolute mob scene. There has been no parking from 5-8 pm at my location since everyone has “resolved to be better” this year. Awful tough to work out when you can’t find a place to park.
This is just one more barrier for people to overcome. Before leaving their house they think, do I really want to go battle the crowd rather than being excited for their workout. They justify their laziness by saying well I probably can’t get a treadmill for 20 minutes or someone is already on that machine, I can do it next time. By March, most people will have given up and the gym will be back to a manageable crowd, and PF is still getting “just 10 bucks a month”
“Nobody goes there anymore, its too crowded” – Yogi Berra

11. Bare minimum
No Classes, Low Weight Machines (No strong people remember) minimal guidance, no sauna/steam etc.

Your getting some free weights, cardio and circuit machines. FREE PIZZA THOUGH!
Having free pizza on the Monday January 3rd was quite a scene. Remember that everyone is coming back STRONG in 2011! Back into a routine after work, eating better and focused. They walk in the door and the entire place reeks of pizza. Fresh, hot and delicious. Now, I know these people were done eating junk food 2 days ago, BUT… they are already at the gym, why not have a slice or two. They are paying for it anyway! For the people who refused to eat it because they set goals and weren’t compromising after 1 day, it was distracting to smell it the whole time. Same reason that alcoholics don’t hang out in bars, too tempting.
Now, I’m not saying “fit” people can’t enjoy a slice from time to time, but 2 days after new years I think alot of honest resolutions went up in flames.

Final Thoughts: I am not saying Planet Fitness does anything illegal with your account or information. They seem to be honest in that sense, however make sure you understand your sense of value. Don’t become a sheep who thinks they are getting a good deal behind the 10 dollar a month guise. There is a reason this company is exploding onto the scene. They have a forumla that works.

Lastly, when a small business starts it seems to have a mission of purpose to help people get better. Yet, when it starts to expand to 2,3,5 shops it loses a little of its luster. The owner is spread out and now focused on making sure things run smooth rather than baking fresh bread every morning. Recent companies like Five Guys, Upper Crust Pizza and Planet Fitness have become so operational in their management (the only way to run big companies) that all employees are cog in a machine. The attitude that made these companies great and gave them the opportunity to expand are gone and replaced by corporate mantras and handbooks.

Healthcare organizations are often criticized for being profit oriented business who care about dollars over patients well being. Yet, when you look into most big business, its is rare to find one who truly cares. While people are outraged that Healthcare companies do this, other industries get a free pass.

I think we need to look past the purple and yellow and really think if Planet Fitness is ultimately helping or harming its consumers and how they can do better. You will almost always make more money if you are inspiring and helping your members be great, rather then using them as a monthly withdrawl device.
Either way its just 10 dollars a month I guess!

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3 Comments

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  1. JackBauer / Jan 5 2011 6:40 pm

    The definition of a scam is, “A fraudulent business scheme; a swindle”. It is unclear how exactly Planet Fitness is a fraudulent business scheme in your post. Planet Fitness is a niche business in an ever-growing market. They offer a cheap alternative to more expensive, mainstream gyms. Often people find themselves unable to commit to a more expensive choice of a gym and cannot justify, perhaps, a twice per week gym visit for $80 a month. Furthermore, with the downturn of the economy it can be seen as even more burdensome for individuals than in times past. With the cost of living rising, people working more, and dual-working parents, there is less and less time to be able to get to the gym everyday. Having a “fallback” to workout inside a controlled environment at $10 a month isn’t exactly a scam.

    I have been a member at Planet Fitness for 18 months now. The equipment is adequate for what is needed for any person looking to improve their fitness. I have paid nothing, except for the $10 a month. $180 billed to date. The fine print, for me at least, has not included any hidden charges whatsoever. I am sure there are exceptions everywhere. The internet is a breeding field for people who feel spited in every aspect of society. You could support any view point by referencing horror stories from people who have felt slighted and are too petty to realize it was probably their fault for not correctly handling the matter or simply walking away having learned a lesson.

    If you take the time to simply peruse Planet Fitness’ website, it is even more apparent that they do not prey on poor neighborhoods. They are located in cities and towns that are affluent as any in the United States. It is not fair to take your own example and extrapolate over the entire population. There is a reason why their formula is working; there is a demand for their product.

    In summation, “don’t eat the pizza” (YOU have a choice, don’t make excuses).

  2. Trent Hamm / Jan 6 2011 7:13 pm

    I have never used Crossfit, nor do I have any intention of ever using it. I think you may be referring to J.D. Roth from the Get Rich Slowly blog, not me.

    • zachfarley / Jan 6 2011 7:27 pm

      My bad on that Trent, I had confused you and JD! (2 of my top 3 PF bloggers) Fixed and thanks for stopping in. I don’t do crossfit either, seems too intense, I haven’t worked out with people yelling/encouraging me since college and I’m not eager to train like that again. Good luck with your 2011 workout goals!

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