App Fines You For Missing The Gym, Rewards You For Showing Up
CNBC Sports Business Reporter
When I’ve gotten a trainer in my life, I’ve done it for two reasons. The first reason is obvious. They get me to work out harder. The second reason always sounds a little strange to people: I’m paying someone a lot of money, so I have to show up.
Yifang Zhang studied Behavioral Economics and found out that my second thought is actually quite rational and common. So instead of having people pay a trainer at all, Zhang decided to have people fine themselves if they didn’t show up at the gym. The result? An app called Gym-Pact.
Here’s how it works. You determine your weekly gym schedule and an amount of money you’re willing to pay if you don’t meet your commitment. A locator device makes sure you check in, so you’re not cheating. And if you don’t show up, and stay there for 30 minutes, your credit card that you provided gets debited.
“On average, people put about $5 or $10 on the line,” Zhang told me. “And we actually have 80 to 90 percent success rates at getting people to the gym on the days that they say they will, which is very high in the industry.”
The app has only been available for two weeks, but Zhang tested it for months and the results were similar. And it seems there’s plenty of demand for the app as more than 17,000 people have downloaded the app.
But it’s not only losing money that helps the person who wants to keep a workout promise, it’s also the fact that Gym-Pact gives you money if you do show up.
At the end of each week, Gym-Pact tallies all the money it took from people who didn’t show up to the gym and redistributes it to the people who did show up to the gym. In order to make money, Gym-Pact takes 50 cents out of every distribution and also 10 percent of what they give out, which is normally 50 to 60 cents per successful trip to the gym.
That number gets higher when people traditionally get lazy. Zhang said people who made it to the gym while the app was in the beta stage during Thanksgiving and Christmas were making as much as $2 per workout.
Zhang says there are also other revenue opportunities, including doing deals with companies that give gym goers rewards.
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