A lot of people who join gyms or health clubs find it very easy to stop going. Two 2010 Harvard graduates, however, are determined to change that.
Gym-Pact (http://www.gym-pact.com/) is a fitness program where you pay less if you exercise more. As described by its creators Zhang and Oberhofer, “Users create a Pact of how many days a week they want to get to the gym, and how much in Stakes they will pay if they don’t work out. When users fulfill their Pacts by checking in at the gym with their smartphone, they earn cash, paid for by those who didn’t make their Pact.”
In a sample Gym-Pact program scenario, a member might commit to four gym visits per week, with a motivational fee of $10. If he keeps to this commitment, his gym membership is free. If he only goes to the gym twice that week, he’ll owe Gym-Pact $20. If he decides to stop the program altogether, he will have to pay $75.
Nowadays, this main idea behind Gym-Pact, a new company in Boston which is the co-founders are Zhang and Oberhofer that partners with local gyms to offer discounts to consumers in exchange for weekly workout commitments. As a member, if you successfully fulfill your commitment, you enjoy great discounts on a fitness membership that you actually use. If you fall short of your commitment, a motivational fee is charged for each day missed that week to motivate you to get back on the fitness track.
Gym-Pact, as described Zhang and Oberhofer, “is a Foursquare-like mobile app with cash incentives to get you to the gym. Users create a Pact of how many days a week they want to get to the gym, and how much in Stakes they will pay if they don’t work out. When users fulfill their Pacts by checking in at the gym with their smartphone, they earn cash, paid for by those who didn’t make their Pact.” Currently, they have 50+ gyms registered as part of the application.
Real accountability was critical, but collecting attendance data from gyms proved problematic, and they keep tabs on members through a simple SMS system. E-tokens are kept at the gym’s front desk, with a digital password that changes every 60 seconds. Whenever you arrive at your fitness destination there will be a passcode for the day at the front desk. You SMS this code to the Gym-Pact designated number when you sign-in and when you sign-out.
“Basically, Gym-pact operates by negotiating a group rate with Planet Fitness, then paying off the membership fees for participants. They will agree on a weekly schedule and if the members miss a session or opt out of the program for unexcused reasons, they will have to pay. That money will be used to pay for more gym memberships and to build a financial aid fund. The company will eventually make money from referral fees and revenue-sharing affiliate programs with gyms.”
So, the questions are:
- Have you ever heard Gym-Pact and would you like to participate into this program?
- How would you assess this free concept and new business model? Does it works?
- If yes, how can we extend this concept and model and apply to other business layers or industries?