How Planet Fitness Dominated the Gym Industry
Summary
- In gyms, offering too many amenities like racquetball courts and pools can make people feel they are not getting their money's worth if they only use one feature.
- People perceived they were getting less value because they used only a small percentage of the amenities.
- Planet Fitness succeeded by removing extra features and focusing on what most people use: cardio and some weights.
- They priced their membership much lower, making people feel they were getting value for the money they spent.
Video
How To Take Action
I would suggest implementing these simple yet powerful strategies to grow your business or personal development journey:
Focus on Core Value Offers
A good way to start is by figuring out what your customers or clients really value and simplifying your offerings to emphasize just that. For example, if you own a small gym, identify the most used services, like basic cardio and weights, and promote those. This can save you money and increase customer satisfaction since they feel they are getting exactly what they need.
Simplify and Cut Costs
By removing the "extras" that most people don't use, you can streamline your business operations. This not only cuts costs but also makes your services more appealing to budget-conscious customers. A simplified service offering can lead to a perception of higher value. Take Planet Fitness as an example—they removed seldom-used amenities and lowered their prices, which made their membership more appealing.
High-Value, Low-Cost Implementation
Embrace low-cost yet high-impact changes. For instance, basic surveys or feedback forms can help you understand what parts of your service are most valued and which are underused. This quick step provides insights for optimizing your offerings without heavy investment.
Customer Perception
Focus on how customers perceive value. If they feel they are paying for things they don’t use, they’re likely to feel dissatisfied. Simplifying your service or product lineup can make them feel like they’re getting their money’s worth. This strategy can help you attract and retain more satisfied customers.
Pricing Strategies
Consider adjusting your pricing model to reflect the simplified and focused services you offer. Lowering prices while providing high-value, essential services can make your business more attractive, just like Planet Fitness did. People love to feel they’re getting a good deal for exactly what they need, nothing more, nothing less.
By focusing on what people actually use and perceive as valuable, you can provide better services at a lower cost and increase customer satisfaction.
Full Transcript
they learned this in the gym space which was if you had a racketball court and a pool and all these things people actually perceived that they were getting a lower percentage of the value because they only came for the pool or they only came for the basketball court and so even though it's like an all-in-one price they were like well I'm only using 8% and so the reason Planet Fitness was able to come in and wedge themselves in the markets they just removed all the other stuff and said the vast majority of people use cardio and some people use weights and so they just made the gym that way priced it way lower and then everyone's like okay cool I use this I'm not even going to get into the consumption model of Fitness but like at least from the person perspective they're like okay I'm not going to waste my money by not using all these other features
