Plan To Join A Gym In 2017? Read This First.

How often do you hear people say they’re finally going to get in shape in the New Year?  It’s a great goal, but you can be excused for doubting whether the person is actually going to see this resolution through.

We’ve all been there, and we’re skeptical, too.  So this year, we decided to see whether the spending of Pocketbook’s 250,000 users could provide some insights into behaviour patterns around this type of resolution. As always, we analysed the data in aggregate and with identifiable information removed.

We focussed our research on gyms.  Gyms are an obvious destination for people with fitness goals, and they can cost a lot of money.  Our data uniquely enables us to discover gym spending patterns over time.

We started our investigations with a few common sense hypotheses. Like, do people sign up for gyms mostly in January — we thought they probably would?

And do people who sign up in the New Year stay running on the treadmill? Or do they fall off (hopefully not literally)? Again, we figured they probably would. You get the picture.

Because past history is usually the best indicator of future behaviour, we looked at the post new year spending trends in 2014, 2015 and 2016. Armed with our questions, we dug down into a big sample set of nearly 35,000 people after we had filtered the data to look at the top 35 gyms.

Turns out we’d guessed right on a few things, but were surprised on others.

We’ll leave a deeper analysis of these trends, along with the industry context, to others, but here’s what we found in our data:

  1. Fitness resolutions usually don’t last – This wasn’t a surprise, but the speed of exit was.  The majority of people who join gyms in the New Year are gone within months (half are gone by 5 and a half months);
  2. People Delay Their Fitness Resolutions –  Most people’s gym resolutions don’t start right away, they start after Australia Day (this was a little surprise for us: February looks to be a bigger month for signups than January);
  3. We’re making more fitness resolutions – People have been signing up to gyms in the New Year at an increasing rate for the past three years;
  4. Some of us are born optimists – 10% of people keep trying every New Year, joining a new gym only to drop out; and
  5. The $8.5b fitness war might be heating up – Australia’s top six gym brands were analysed: Fitness First; Jetts; Anytime Fitness; Virgin Active; Fernwood; Snap Fitness.  Fitness First has been at the top of the list in terms of total spend for the past three years, but Jetts has just passed Anytime Fitness for 2nd place (fitness is an estimated $8.5 billion industry in Australia).

 

The Detail.

Want to know more? Here’s the data in a bit more detail:

Hypothesis 1: People that sign up early in the year as part of their New Year’s resolution will mostly drop off during the year

On retention, we looked at the signups in Jan and Feb for the top gym brands we’ve identified (Fitness First, Jetts, Anytime Fitness, Fernwood, Virgin Active and Snap Fitness). We found:

  • Around 57% of people don’t stick around for the whole year. This is pretty consistent across the three years:
    • 2014 – 55.16%
    • 2015 – 58.32%
    • 2016 – 56.68%
  • Further still, of the 56%, the majority (34%) dropped off before we hit EOFY.

Again, anyone out there with the time and inclination could take a close look at the different gym cancellation processes to see if this is a factor in the numbers above (i.e. Are people no longer going to the gym, but still paying because cancelling is too difficult or psychologically they want to stick with it?)

Hypothesis 2 and 3: People sign up to gyms mostly in January as part of their New Year’s resolutions (and are signups around this time increasing)

We looked at which month people first signed up to gyms across 2014, 2015 and 2016. We found that January was not the biggest signup month in either of the three years. February is. We’re speculating this delay could be due to:

  • Gyms offering free trial periods, so it’s possible in some cases membership payments start in early February (worth someone looking into).
  • Summer fun until Australia Day. People naturally delayed acting on their New Year’s resolution while in holiday mode.

With this last point in mind, we looked at Jan and Feb combined and found that the proportion of people signing up has increased in the past three years. Look at the figures:

  • 2014 – Jan and Feb – 18.05% (just over the expected 1/6 of the year)
  • 2015 – Jan and Feb – 21.92%
  • 2016 – Jan and Feb – 25.50% (more than 1/4 of people)

Hypothesis 4: Some people that sign up to gyms as part of their New Year’s resolution, then drop off, might repeat this behaviour year on year

We looked at pairings of 2014-2015, and 2015-2016 and found that:

  • The % of people that repeat the process was low (10% of people across both years)
  • Of the repeaters, there is a slightly higher skew towards women (about 2% more likely)
  • Also when looking at the repeaters about 10% of those (12.88% of the 2014 repeating population, and 8.91% of the 2015 repeating population) repeated at the same gyms – so if things didn’t work out, people are more likely going to try a different location.

Hypothesis 5: Gym membership costs vary greatly and the rankings of the top six gyms in Australia has changed (ranking based on our data)

On a per user / per year spend, we see that gyms vary greatly. Primary factors affecting these results are most likely pricing (and discounting strategies) and retention.

Gym Brand 2014 2015 2016
OVERALL $485.01 $550.15 $674.03
Fitness First $681.80 $774.14 $818.16
Jetts $428.03 $453.32 $513.63
Anytime Fitness $223.96 $137.00 $268.76
Virgin Active $1,082.74 $1,145.69 $1,299.29
Fernwood $813.72 $847.79 $976.46
Snap Fitness $394.68 $377.52 $473.61

As part of this exercise, we were also able to identify the 6 most popular gym brands over the past 3 calendar years (more members). These are:

2014 2015 2016
1 Fitness First Fitness First Fitness First
2 Anytime Fitness Anytime Fitness Jetts
3 Jetts Jetts Anytime Fitness
4 Snap Fitness Virgin Active Virgin Active
5 Fernwood Snap Fitness Fernwood
6 Virgin Active Fernwood Snap Fitness

 

Why These Questions Matter.

Pocketbook’s purpose is to help people spend and save better. Gyms obviously work for a lot of people.  Even people who drop out may benefit from a boost in fitness or a lifestyle change, but given that almost $8.5 billion dollars are spent annually on gyms and fitness in Australia, it’s important to know that the majority who join up to a gym as part of a New Year’s resolution don’t stick it out.

Consumer watchdog, Choice, has taken a close look at gym contracts here; and SunCorp’s the Cost of Being Fit underscored how a lot of spending around fitness goes unrecognised by Australian consumers (read more here).

NPR in the US has done a great piece on the psychology around the gym business model (that’s here), but it’s worth summing up. Basically, gyms count on more people signing up than will actually use the gym. In some ways, this is fine. It makes the costs cheaper for everyone and a better experience for the people who actually end up using the gym. Our data doesn’t say don’t sign up to the gym, but maybe think twice or three times about whether you are one of the people who won’t use the gym enough to make it worth your while. The good news seems to be —and this could be something a researcher might look into— that the kind of unfair contracts of the past seem to be gone and competition remains very strong.

How We Approached the Data.

We take our user privacy very seriously, and strictly and anonymously analyse data to determine the kind of information about trends and habits that can further this purpose and benefit everyone. We also take the integrity of the data we analyse seriously, so here are some of the things we did to clean the data so it would be most accurate and effective:

  • We took out transactions which were outliers or otherwise questionable
  • We built a sample based on the most prominent 35 gym brands and an “other” to mostly catch ongoing fortnightly/weekly or monthly subscription gyms. This filters out equipment purchases and other anomalies. We then used the ‘cleaned data’ to look at specific questions
  • Our final sample was 34,816 people

 

Pocketbook Personal Spending Takeaways.

The above findings should give you a leg up if you’re going to find the best gym deal.  And here are three additional key takeaways:

  1. You probably don’t want to sign up to anything longer than a 6 months contract. There’s a really good chance you’ll drop off before July.
  2. If you want to join a gym this year, you’ll likely need to increase your fitness budget. Average yearly gym spending was up 48% year-on-year last year and has been up yearly over the past 3 years. Chances are prices this year will be higher again.
  3. Exercise without the gym fees. Regular exercise has many benefits, economic and other, but do you really have to pay for it? Here are 50 free exercise hacks from Huffington Post.

Wishing you a healthy and fit 2017!

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