Planet Fitness Business Model
1. Key Partners
Boys and Girls Club
For the 4th Consecutive year at over 1800 club locations they partnered to prevent bullying and promote kindness.
Kohl's
89% of customers combine shopping in local areas around the gym with their workouts (Kufahl, 2019).
Online Gifts
Planet Fitness partnered with online gift retails such as Sherris Berries and 1-800-Flowers to allow members to receive 15% off year around.
Motivations for partnerships
Bottom line is that the more partnerships the more business coming in and more word of mouth. Advertising and profit revenue for a successful business is key.
2. Key Activities
Value Proposition Require
- Small Group Training focusing on everyone. - Different fitness types from cardio to weight training. - Friendly staff trainers offer unlimited free fitness. - With being a judgement free zone they don't enforce a lifestyle change like some locations. They still incorporate foods like pizza first Monday of the month and bagels the second Tuesday. Basically saying hey while we're here to help we are not here to judge that you can still workout and eat crap food.
Customer Needs
Flexibility which is essential to students, business professionals, and blue collared workers. An affordable price offering unlimited usage of facilities and services for only $10 a month. Planet Fitness allows for variation of memberships offering additional benefits such as a choice to bring a workout partner.
Activities are important
The way Planet Fitness advertises from internet, television, billboards, or even word of mouth reaching all demographics on their affordability beating out all other gym membership prices.
3. Value Proposition
Core Value to the customer
A judgement free zone that attracts the average person rather than the body builder.
4. Customer Relationships
Established Relationship
Customers expect a friendly human interaction at every location without deviation. The goal is to "provide a clean, safe, welcoming environment for everyone who walks through the door and all the equipment to support your need once you're there." (Planet Fitness website, n.d.).
5. Customer Segments
Classes creating Values for
- App Users - Those wanting to motivate themselves and change their life. - Customers with little to some gym experience. - All age groups, shapes, and body types.
Most important
Everyone is the most important to planet fitness as their missions statement, "is to enhance people's lives by providing a high-quality fitness experience in a welcoming, non-intimidating environment, which they call the Judgement Free Zone, where anyone can feel they belong." (About Planet Fitness, 2019).
Integratation
Cost - For an additional $10 ($20) a month you can receive in house discounts, you can transfer services to any gym worldwide, and enjoy all amenities offered by the corporation. Format- Planet Fitness allows for transfer of services (picking of new home gym) or use of all locations by paying $20 a month. This membership allows for tanning, massage chairs, hydro massage beds, and classes. The basic $10 a month just allows for membership basics at the gym near you.
6. Key Resources
Value Proposition
A key resources for the value proposition is the Planet Fitness Code of Ethics which are guided by passion, excellence, respect, transparency, and integrity. This ensures that the customers are welcomed and treated as a equal person no matter on looks or fitness level, just that they want to improve their way of life.
Activities Most Important
Physical assets such as other locations which makes customer relationships easier as customers can move or have other job locations. This allows for a customer to continue their fitness journey no matter where they are. Intellectual Property which allow for further partnerships like Kohls or the Boys and Girls Club and further out reach with other fitness apparel brands or products to boost sales.
7. Channels
Customers Reached
Website Advertisement Social Media/App
Best, Cost, And Customers Needs
Social Media or having an app works best for targeting advertisements for a reach all demographics. Social media advertising when correctly aligned with the marketing demographic can have a huge increase on a business revenue. From the start of social media advertising it can hit every time someone searches keywords like fitness, cheap, or 24 hours and allow for business to boom. The cost of social media can differ depending how much one business is willing to put in. "This is why global social ad spending doubled from $16 billion in 2014 to $31 billion in 2016 and is projected to increase another 26% in 2017 (Jolly, 2019)." Things such as social media and having an app for a business reaches customer needs because it is on their own schedule their own time. It allows for customers to track their workouts and weight to see what progress was made. According to smallbiztrends.com a gym needs a mobile app for four reason: 1.) Allow for wearable trackers to sync to the app, this allows for customers to share, monitor, and track their progress. 2.) Mobile apps build community engagement within the are they live in and could open more doors for others to join the gym. 3.) The future drive for the health and fitness industry as the app can meet the gym users anywhere they are and the combination of fitness trackers is just an added bonus. 4.) Adds value to your business. As customers they would want more than just a bunch of equipment in a hardened structure. The app would allow the reach to all age demographics and a more personalized experience. (Gazdecki, 2017).
8. Cost Structure
Most Cost
From a customer viewpoint the most cost is the membership fees. While basic card is $10 a month and the black card is $20 a month their are other fees that occur. As members while the monthly cost is low, at membership sign up a $39.00 initiation fee is due for your new account. In the long run if you decide to cancel, all membership levels pay a $58.00 cancellation fee. (Admin, ).
Most Cost - business
Planet Fitness allows for a franchise opportunity however it requires of a minimum of $1.5MM non-borrowed liquid assets just to consider the location you'd want to develop your gym on. If enough liquid assets are already in place for the future business owner, they also have $10,000 site selection costs, a construction review fee at $4,000, and just the fitness equipment alone cost $857,000 ("Planet Fitness Franchise Costs & Fees," 2019).
Key resources/activities most expensive
- Mobile App design - Online and Visual Advertising - Business Franchising - Customer acquisition costs
9. Revenue Streams
Value Willing to Pay
With current advertisements of "25 cents down, $10 a month" says a lot about the accessibility and affordability of this company. Anyone can afford a quarter down and Planet Fitness catches their customers attentions with being this low-cost gym.
Currently Pay vs Prefer to Pay
Currently as a member when I initially signed up over two years ago I had to place a card on file and it still is. However, the nice part about this the pay is automatically taken out the same way every month. However, for some reason want to purchase something from the club and I do not have my wallet I can tell them use the card on file. Preference of payment depends on the customer honestly. Some may not have a problem with a set up plan like my membership while others may not want to have their card on file for fear of theft or overdraft issues by mistake. Many gyms do not offer cash payments as many are set up like planet fitness or wanting a routing or bank account number.
Revenue Streams
Planet Fitness allows for a lot of revenue, in 2019 they were in the 25th percentile for membership sales totaling in $1,189,094, being the principle source of revenue for the club ("Revenues, Expenses, and Profits of Planet Fitness Corporate Locations," 2012). The business offers in club purchases from beverages, tanning necessities, and apparel which average about $10,000 making the total revenue with memberships and retail of 42 corporate owned locations $1,198,867. Other revenues are show below: Cost of goods sold - $14,556 Gross Profit - $1,184,311 Advertising - $104,803 ("Revenues, Expenses, and Profits of Planet Fitness Corporate Locations," 2012).
10. Brainstorming Space
Questioning
Be sure question different levels of employees of what they think changes could be or need to be. Talk to different customers on their personal experience.
Questioning cont
What are there experiences working for the gym?
