As restrictions ease and people start to return to offices, Forever Beta's Jesper Norgaard, explores how behavioural economics could be used to encourage people to return to gyms as part of the IPA's Advanced Behavioural Economics course.
In Britain, there are 10 million people with a gym membership - that’s one in seven of the entire population. With all these people doing burpees, swinging kettlebells and throwing medicine balls, it’s no wonder that it’s a £5bn industry.
But in early 2020, the COVID-19 pandemic found its way into the UK - and it changed everything. In March, the government imposed a lockdown that meant the 7,000 gyms and leisure centres across the country had to shut down, leaving the dumbbells gathering dust.
As countries all across Europe have now started to ease their lockdowns, gym-goers are slowly returning to their cathedrals of cardio. In Switzerland, for example, the return rates have been between 70% and 90%.
In this short essay, I will explore how we can see similarly successful return rates in the UK by using behavioural economics to encourage people to renew their gym memberships once lockdown is released. More specifically, I will draw on selected elements from the CReATES framework, which is an extension of the EAST framework, pioneered by The Behavioural Insights Team.
I would like to begin by addressing what might be the biggest challenge for gyms in the months to come - the consideration set and price relativity.
I think it’s fair to assume that people who would normally go to the gym have done some kind of exercise at home or outside during lockdown. As a result, in people’s minds, our paid-for gyms are now being compared to the free online classes (e.g. Joe Wicks and Yoga with Adriene) rather than other paid-for gyms.
To break free of this new consideration set, we need to distance ourselves from the free option. This could be done by moving closer to the world of spas and wellness. For example, from an experience point of view, we could introduce cues from spas; e.g. free cucumber water. And from a communications perspective, we can borrow from spa and wellness language, including words like 'pamper' and 'treat yourself' in our communications.
From behavioural economics, we know that if we make the norm of behaviour clear, that behaviour will become even more popular. Therefore, another effective tactic to get existing members to come back could be to implement social proof in the communications.
In practice, I would suggest using social proof in two different waves of communications. In the first wave, we would utilise national statistics or do a quick survey, which would inform our messaging; e.g. "X out of 10 members can’t wait to go back to the gym". Then, when the centres have been open for a while, we can introduce a second wave to contact lapsed members and use numbers from their local gym; e.g. "9 out of 10 members have returned. Come join them."
After not going to the gym for 3 months, people probably have a myriad of excuses not to come back. For example, the friction could be that they are concerned about the hygiene standards in the wake of COVID-19. To combat this friction and motivate people to come back, we need to make it as easy as possible.
To make it easy, we could use The Foot-in-the-Door Technique. The basic idea is that we ask people something small to begin with. If they say yes, it’s more likely that they will also comply with further, larger requests (i.e. renewing their membership).
In this instance, we could ask people to come down for a free workout to see the new safety and hygiene measures before they renew their membership.
When they come for their free workout, we need to make sure that we give them a great experience that will drive them to come back again. The problem, however, is that people are selective when it comes to memory. This is where The Peak End Rule comes in handy.
The Peak End Rule says that people remember two things: 1) The most intense moment, and 2) the final moment. Truth is, we have little control over the most intense moment - it’s probably when they are trying to bench press the same weight they did prior to lockdown. But we can control the final moment. For example, if the gym has a receptionist, he or she can make sure to compliment everyone before they leave - or alternatively, it could be a simple sign above the exit, saying "Well done, you. You smashed that workout! See you for the next one."
So, those are a few ways in which we can use behavioural economics to encourage people to renew their gym membership after lockdown. But we are not done yet.
When I looked at the exam question through the lens of everything we learnt on the IPA course, I spotted what I think is a good business opportunity. So, if you would humour me for a minute or two, I would like to go beyond the brief and look at how we might go about acquiring new members too.
Habits are powerful and they drive a lot of our behaviour. However, from behavioural economics, we know that there are times where habits are weaker and easier to break. For example, when a person’s age ends in 9, when the habit is fairly new, or when people have just gone through a life event; e.g. new job, divorce, having kids. It’s what behavioural scientists call The Fresh Start Effect.
There’s a strong argument that coming out of lockdown is a life event in its own right, meaning that it is an opportunity to attract people who have not been gym members in the past. And let’s be honest - we will need the new members because increased member churn is bound to happen.
In practice, this means we need to advertise - and preferably, more than our competitors. There’s no doubt that the last few months have been rough on the bottom line, but now is not the time to cut spend if we want to secure future revenue.
When advertising, I would suggest we consider The Von Restorff Effect (also called The Isolation Effect), which says that being distinctive will help get our message across because humans are hard-wired to pay more attention to things that stand out.
Distinctiveness can be derived from breaking the conventions that exist in the category. It can be as simple as using design elements that aren’t normally part of the category’s visual world. It can be the way we use a certain language and tone of voice. It can even be using media in surprising ways. For example, we could collaborate with a media partner to turn our OOH advertising into pop-up gyms; e.g. pull-up bars in bus shelters or climbing walls on the side of buildings. Not only would this make people pay attention to our advertising; it would also work as a simple yet engaging product demo.
In this short essay, I have covered a few of the elements from the CReATES framework, exploring how we can encourage people to get back on the treadmill. But truth is that behavioural science has hundreds of biases, rules and effects that can have a significant impact on the return rates. So, take a sip of water - because this essay was just the warm-up.
Jesper Norgaard is a Senior Strategist at Forever Beta. This essay earned him a Distinction in the IPA's 2020 Advanced Behavioural Economics course. Add yourself to our interest list for the course’s next intake.
The opinions expressed here are those of the author and were submitted in accordance with the IPA terms and conditions regarding the uploading and contribution of content to the IPA newsletters, IPA website, or other IPA media, and should not be interpreted as representing the opinion of the IPA.