AppId is over the quota
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Like many Americans who’ve made resolutions for 2012, I made these very same New Year’s promises about this time last year.
Which, it turns out, is great for business. Our collective failure to keep our resolutions represents an annuity of sorts for health clubs, weight-loss centers and other enterprises that make up what you might call the self-improvement industry. It’s an industry that thrives on our failure to change: recidivism is good for the bottom line.
Americans spend many tens of billions every year in the hope of keeping resolutions to lose weight, get fit, quit smoking, fix their finances, organize their closets — on and on. Last year, we spent $62 billion on health club memberships, weight-loss programs, exercise tapes, diet soda and the like, according to projections from Marketdata Enterprises, a market research firm.
We start with good intentions. Memberships for health clubs and weight-loss programs spike each January, says John LaRosa, the president of Marketdata. But by March, the lines thin at the treadmills and many dieters relapse. So the next year, we try — and pay up — again.
“If I try one quick fix and it doesn’t work, I may be more likely to try the next quick fix,” says Lisa Lahey, the co-founder of Minds at Work, a consulting firm in Cambridge, Mass., which coaches executives and educators in sustained behavior change.
Supposed easy remedies like celebrity diets hold a powerful allure, but they rarely work in the long term, she says. After all, it’s hard for people to shake the underlying conditions — like stress or anxiety — that cause unwanted habits. If exercise tapes, dietetic meals, nicotine lozenges and personal finance apps worked by themselves, we’d all be fit, thin, smoke-free and rich.
The hard work of changing a lifestyle isn’t as alluring as dropping 30 pounds in 30 days. But some stop-smoking and weight-loss programs, as well as gyms, are trying to help for the long haul, a strategy that can improve customers’ chances of success and, for companies like Weight Watchers International, build brand loyalty and revenue.
JANUARY is the most important month of the year in the health club industry. At many gyms, new memberships double. Given that about a third of all members tend to turn over every year, the resolution crowd is crucial.
“The resolutioners always pop up,” says Scott Hamann, an analyst at KeyBanc Capital Markets covering the fitness industry.
But you probably know what happens next. Only a fraction of members work out twice a week or more, despite all those monthly dues. Health clubs in the United States had more than 50 million members and revenue of $20.3 billion in 2010, according to the latest data from the International Health, Racquet and Sportsclub Association, an industry trade group. But clubs reported that members typically visit only 54 times, or slightly more than once a week.
People might want to do the math before joining a gym, says Stefano DellaVigna, an associate professor of economics at the University of California, Berkeley, and a co-author of a study titled “Paying Not to Go to The Gym.” From an economics standpoint, he says, many people would be better off paying per visit than signing up for a rolling monthly membership. People who seldom use their pay-by-the-month plans often don’t get around to canceling them, the study found.
“People overestimate their future attendance,” Professor DellaVigna says. “They are not getting their money’s worth.”
In any given month, one-fifth of a gym’s members are typically inactive, club executives say. These no-shows are great customers for the gyms.
“You don’t have any equipment depreciation,” says Sean Naughton, an analyst at Piper Jaffray. “You don’t have anybody who has to service them — other than charging their credit or debit card every month.”
Still, some health clubs are trying to have their customers visit the gym more regularly.
“Most of these businesses want to sign you up and hope you don’t show up,” says Scott M. Rosen, the chief operating officer of Equinox, the upscale fitness chain. At Equinox, he says, members not working out for two weeks automatically receive an e-mail from a club manager inviting them — nudging them, you might say — to come back. “We want you to be engaged and we want you to get results.”
Town Sports International, the company behind the Washington, Philadelphia, Boston and New York Sports Clubs, offers a 30-day trial membership for $30 — long enough for most newcomers to figure out whether they are ready to make workouts a regular habit, says Robert J. Giardina, the company’s chief executive. More than 100,000 people have tried the 30-day plan.
“Exercise isn’t easy. Most people don’t like it,” Mr. Giardina says. “But if they can get past a certain point — usually it’s about two months or 12 workouts — they get committed.”
Life Time Fitness, a family-oriented chain with more than 1.3 million members, tries to engage people by helping them find activities they enjoy so they’ll make them a habit. Its 100,000- to 200,000-square-foot clubs, mostly in suburban locations, offer fitness, basketball leagues, racquetball, swimming, yoga, tennis, Pilates as well as weight-loss programs and spa treatments.
“It’s about getting over the hump of making New Year’s resolutions,” says Jeff Zwiefel, the company’s executive vice president.
To reinforce its message, Life Time has “membership engagement advisers” who call new members at regular intervals during the year. In 2010, the company had revenue of $913 million.
THE idea that we can transform ourselves is deeply ingrained in American culture. Benjamin Franklin in his autobiography described a self-improvement plan that he devised for himself as a young man. It included virtues to which many of us still aspire: control stress (“Be not disturbed at trifles,” Franklin wrote); get organized (“Let all of your things have their places; let each part of your business have its time”); and show some temperance (“Eat not to dullness; drink not to elevation”).
But Franklin didn’t have to cope with home shopping channels and the local drive-through McDonald’s. Americans spent about $26 billion on diet soda, prepackaged diet dinners and artificial sweeteners in 2010, along with about $1.2 billion on diet books and exercise videos, and about $3.3 billion on commercial weight-loss programs, according to Marketdata estimates. Despite all that, people generally lose only modest amounts of weight and have difficulty keeping it off, says Kelly D. Brownell, the director of the Yale Rudd Center for Food Policy and Obesity; human biology and the current food environment, he says, are stacked against us.
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