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Pay-for-use pricing is a common pricing strategy but recently I read an article describing a new application of it in the fitness industry. You commit to a number of workouts per week and if you meet your commitment you save money — if you don’t meet your commitment you pay a penalty. The theory behind this strategy is “people are more motivated by immediate consequences than by future possibilities.” In other words someone would work out to avoid paying the penalty rather than work out for a long-term payoff of health and fitness. Pay-by-use pricing has been effective in many areas, for example cell phone pay-as-you-go plans. The theory of avoiding penalties vs. achieving benefits has worked in other areas too. Labelling food products “90% fat free” is more appealing than “10% fat.” I’m not convinced that this pricing strategy will be as effective in the fitness industry.

It is not easy to change human behavior. The fitness industry has used segmented membership fees and promotions for as long as treadmills have been around. And for just as long, people join up with the best of intentions but never find the time to actually make it to the gym after those initial visits. If changing behaviour were as simple as incentivizing people to work out this likely would have been implemented years ago.The definition of a workout varies from member to member. If I commit to and achieve 5 workouts in a week will I get a bigger discount than someone who only goes 3 times a week? These issues add complexity to the pricing plans and sales process and raise questions about fairness in the customer’s mind.