With more than 3 million members in 38 states and 28 countries around the world, Gold’s Gym is one of the most recognized names in the health club industry. They’ve been around since 1965, surviving and even thriving in a cutthroat field that has sent many competitors to the business morgue.
But even great businesses make mistakes, and some observers have wondered if Gold’s Gym has shot itself in the foot recently. After all, according to CNNMoney, it’s Anytime Fitness that’s the fastest growing fitness chain, not Gold’s Gym. Some industry analysts have wondered if Gold’s Gym has priced themselves too high for the average consumer, and as a result lost sales. In other words, are Gold’s Gym enrollment fees too high for their own good?
- Gold’s Gym Membership Fee Options
Like many health clubs, Gold’s Gym membership plans require the payment of both an enrollment fee and a monthly fee. However, Gold’s Gym offers at least four different options to the prospective health club member, depending on their needs and wants:
1) Basic Plan:
$49.99 Enrollment Fee
$17.99 Bi-Weekly Dues
2) No Monthly Dues:
No Enrollment Fee
$499.00 Paid In Full
$0 Monthly Dues
3) Low Enrollment Offer:
$19.99 Enrollment Fee
$17.99 Bi-Weekly Dues
4) No Contract:
$99.99 Enrollment Fee
$17.99 Bi-Weekly Dues
The ‘Basic’ plan has a minimum contract obligation of $517.73 (adds up to $43.14 per month for 12 months).
The ‘No Monthly Dues’ plan has a minimum contract obligation of $499.00 (adds up to $41.58 per month for 12 months). Note that while this is the only Gold’s Gym plan that waives the enrollment fee for new members, it is still not the least expensive option.
The ‘Low Enrollment Offer’ plan has a minimum contract obligation of $955.47 (adds up to $39.81 per month for 24 months).
The ‘No Contract’ plan has a minimum contract obligation of $117.98, which assumes you quit after just one month of membership. That’s an awfully steep price to pay for one month! The cost is $332.87 if you stay a member for 6 months ($55.48 per month) and $566.74 if you stay a member for 12 months ($47.23 per month).
- The Gold’s Gym Monthly Fee Is Actually a Bi-Weekly Fee
When evaluating these four gym membership options, it’s important to note that Gold’s Gym has done some fancy footwork with their membership fees. Instead of charging a monthly membership fee, which has been the health club standard practice for decades, Gold’s Gym is now charging a bi-weekly membership fee. This subtle change allows Gold’s Gym to collect 26 times per year, netting them an extra 2 payments.
Here’s how that works out…..
Gold’s Gym is currently collecting $17.99 bi-weekly payments x 26 bi-weekly segments of time per year = 26 payments per year = $467.74 annually.
Most gyms charge a monthly fee instead of a bi-weekly fee. If Gold’s Gym did that, they would be collecting $35.98 per month ($17.99 x 2 = $35.98) x 12 months per year = $431.76 annually.
So by charging their health club members a bi-weekly membership fee instead of a monthly fee, Gold’s Gym is collecting an extra $35.98 per member per year ($467.74 – $431.76 = $35.98). This might be a good time to remember that Gold’s Gym has over 3 million members.
- Are Gold’s Gym Enrollment Fees Too High for Their Own Good?
In light of these facts, the salient question to ask is if Gold’s Gym enrollment fees are reasonable. The initial Gold’s Gym membership fee (sometimes referred to as an enrollment fee or an initiation fee) varies between $0 and $99.99 per person. That doesn’t seem to be an unusual amount in the marketplace. (It’s important to note that Gold’s Gym offers a membership plan where they will waive enrollment fees altogether for up-front payment of monthly dues.)
- Are Gold’s Gym Monthly Membership Fees Too High for Their Own Good?
The Gold’s Gym monthly fee varies between $39.81 (with a 2-year commitment) and $55.48 (with a no-contract 6-month commitment).
Simply stated, that’s too high.
Crunch Gym is currently offering health club memberships at $9.95 per month. That’s 75% below the lowest price Gold’s Gym can offer.
24 Hour Fitness has recently offered membership dues between $26.99 – $74.99 per month, depending on club location and type. That’s a potential savings of 32% vs. Gold’s Gym.
Even LA Fitness can beat Gold’s Gym monthly membership fees. LA Fitness recently offered a no contract price of $99.99 initiation fee and $29.99 per month, which is still 25% below the Gold’s Gym monthly membership fee.
- Are Gold’s Gym Enrollment Fees Reasonable?
Gold’s Gym enrollment fees are not too high but are reasonable within the marketplace. At the same time, Gold’s Gym monthly membership fees are higher than the competition by a factor between 25% and 75%.
The question, then, becomes are they worth the premium price? After all, consumers will gladly pay a premium price for a premium product (think Apple, Starbucks and Gucci). Does Gold’s Gym offer such a superior product that they can justify the higher monthly fee they charge, or are they overpriced for the market?
That’s a question worth investigating…..