Gym Membership Models – what is best?

Gym Membership Models – what is best?

Choosing the right membership structure is one of the most critical business decisions a gym owner can make. The membership model doesn’t just define your pricing — it shapes your brand, retention rate, and revenue, and your reputation and marketing potential.

Over the past decade, fitness businesses have shifted from one-size-fits-all memberships to diversified, flexible, and hybrid pricing models. As consumer expectations evolve, successful clubs are those that align pricing with value perception, not just access.

1. The Shift Toward Flexibility and Value Alignment

According to IHRSA’s 2023 Global Health & Fitness Report, the most successful operators are those that match pricing structure to member behaviour and perceived value. In practice, that means offering flexibility, transparency, and tangible benefits tied to results.

Fifteen years ago, annual contracts and “set-and-forget” memberships were the industry norm. Today, 42% of members globally prefer month-to-month or hybrid memberships, and 31% engage in multiple fitness memberships at once (Les Mills Global Fitness Report 2024). This shift highlights that modern consumers buy access for experiences, not just equipment.

2. Core Membership Models and Their Strengths

A. Traditional Contract Memberships

Best for: Full-service clubs with strong brand trust and retention systems.

These 6–12-month agreements remain the backbone of stable revenue, particularly for established clubs with robust onboarding and engagement strategies. They create predictable cash flow, which supports long-term investment in facilities and staff.

However, today’s members expect added flexibility — the ability to pause or upgrade their membership — which can reduce cancellations and improve satisfaction.

Tip: Combine long-term contracts with loyalty benefits such as free guest passes, birthday rewards, or upgrade credits at renewal.

B. Flexible Month-to-Month Memberships

Best for: Competitive or urban markets where consumers have many options.

Month-to-month plans reduce the barrier to entry and attract hesitant members. Fitness Australia’s Club Operations Benchmarking Report (2023) notes that gyms offering flexible memberships often see 20–25% faster new-member acquisition compared to contract-only facilities.

To offset higher churn, focus on early engagement and community integration — members who attend 12 times in their first month are 70% more likely to stay for 12 months (IHRSA 2023).

Tip: Use behavioural analytics or apps to identify disengaged members early and re-engage them with personal messages or rewards.

C. Tiered Access Models

Best for: Gyms seeking to appeal to multiple demographics or income levels.

Tiered memberships — for example, Bronze (gym only), Silver (gym + classes), and Gold (full access with wellness zones) — allow members to self-select value.

This model works well for multi-facility operators and premium clubs where perceived exclusivity drives higher spending. According to Deloitte’s Health & Wellness Market Trends (2023), tiered offerings can increase average revenue per member (ARPM) by 12–18% when upsells are effectively communicated.

Tip: Offer easy upgrades — members are more likely to move up tiers when they can trial higher packages for a limited time.

D. Hybrid & Pay-Per-Use Models

Best for: Boutiques, studios, or operators blending in-person and virtual experiences.

Hybrid models combine ongoing memberships with drop-in or credit-based options. The rise of digital training platforms (e.g., on-demand or livestream workouts) means members increasingly want the ability to train anytime, anywhere.

This approach helps retain travelling members and re-engage those who may otherwise cancel. Hybrid models also support corporate or remote work populations who value flexibility.

Tip: Use hybrid memberships to cross-promote — e.g., include one virtual subscription or personal training credit in every in-club membership.

E. Premium and Inclusive Wellness Memberships

Best for: Mid- to high-end clubs with recovery and allied-health offerings.

As fitness and wellness converge, members are willing to pay more for access to wellness, recovery, and performance services. IHRSA (2023) reports that facilities offering infrared saunas, massage, and recovery zones see 30% higher secondary-spend revenue.

Bundling these into a single premium tier adds convenience and simplifies pricing. For instance, a “Wellness Plus” membership might include sauna access, one recovery session per week, and discounted physiotherapy.

Tip: Train staff to promote wellness benefits as an integrated health solution, not a luxury extra.

3. Key Trends Influencing Membership Design

• Hybrid Fitness: Members expect to train anywhere — digital access is now a hygiene factor.

• Subscription Psychology: Shorter commitment periods reduce perceived risk, even when long-term value is greater.

• Experience Over Equipment: Members will pay more for personalised coaching, social connection, and results accountability.

• Loyalty and Gamification: Reward systems and progress milestones drive engagement and renewals.

4. Pricing Strategy: Balancing Revenue and Retention

The ideal membership model balances predictability (cash flow) with flexibility (member satisfaction). Consider:

• Use data to segment your market — e.g., value-driven vs. premium members.

• Apply dynamic pricing: introductory offers, off-peak rates, or referral bonuses.

• Track Average Revenue per Member (ARPM) and Lifetime Value (LTV) as key metrics, not just membership count.

• Periodically reassess pricing — inflation, technology adoption, and competitive shifts require adjustment every 12–18 months.

5. Combining Models for Optimal Revenue

The highest-performing operators often blend two or more models to capture different customer segments.
Example structure:

• Base membership: Month-to-month access ($29/week)

• Premium tier: Access + classes + wellness zone ($45/week)

• Corporate memberships: Volume discount for businesses

• Add-ons: Personal training, small-group classes, digital training app access

This hybrid strategy diversifies income streams, improves retention, and maximizes facility utilisation across all hours.

Conclusion

There’s no one-size-fits-all approach to gym memberships — the right model depends on your market, brand positioning, and operational capacity.

However, the most successful clubs share a common formula: flexible structures, clear value differentiation, and integration of wellness and digital access.

By aligning membership design with modern consumer expectations, gyms can enhance member satisfaction, increase average revenue, and create sustainable long-term growth.

References

• International Health, Racquet & Sportsclub Association (IHRSA). (2023). Global Health & Fitness Consumer Report.

• Fitness Australia. (2023). Club Operations Benchmarking Report.

• Deloitte. (2023). Health & Wellness Market Trends Report.

• Les Mills. (2024). Global Fitness Report.

• IBISWorld. (2024). Gyms & Fitness Centres Industry Reports (Australia, U.S., U.K.).