Why Planet Fitness hasn’t raised its $10 monthly gym price in 30 years

New York
CNN Business
 — 

A gym membership in the United States typically costs around $50 a month. Boutique gyms and high-intensity classes run double and triple that.

Planet Fitness, however, has offered $10 monthly memberships for 30 years. The no-frills gym chain hasn’t raised the price, making it one of the few things that still costs the same despite the highest inflation in decades.

Planet Fitness blares out the $10 gym plan, which includes annual fees and free training, in commercials, and the company has long sponsored the New Year’s Eve celebration in Times Square to get people thinking about signing up for memberships as their resolution.

That almost sacrosanct $10 price has become a key part of the company’s brand positioning as an accessible, “judgment-free” club conducive to casual gym goers. Planet Fitness members typically go five or six times a month, and around 60% of them don’t visit in a 30-day stretch.

“It’s a very powerful marketing tool,” said Simeon Siegel, who covers the company at BMO Capital Markets. The $10 price is right in the sweet spot, he said: cheap enough to draw people to Planet Fitness who want to get in shape and, equally as important, not so expensive that they will cancel if they don’t go often.

For $10 a month, infrequent users are likelier to hold onto the membership to say they belong to a gym rather than quit, he said.

Planet Fitness uses $10 dues, which can be canceled at anytime, to recruit people who are interested in exercising, but have never joined a gym before, are intimidated by fitness fanatics at other gyms or can’t afford pricier clubs. The company believes $10 is an entryway for the roughly 80% of Americans who don’t belong to a gym.

This inexpensive gym membership model – known in the fitness industry as high volume, low price, or “HVLP” – is also tailored to appeal to high-school students accompanied by a parent, college students and people recovering from an injury or surgery, said Rick Caro, the president of Management Vision and longtime fitness industry consultant.

“It’s a ‘get you off the couch’ price,” said Christopher Rondeau, the chief executive of Planet Fitness

(PLNT), which has grown to more…