7 February 2020

Better Gym and the emptiness of ‘people over profits’ marketing

By Julia Behan

“I chose a gym that puts people over profit”.

In its bid for a slice of the New Year’s Resolution gym membership market, the latest ad campaign from social enterprise Better Gym has pitched for the anti-nasty-capitalist crowd.

But although this kind of glib virtue signalling might appeal to a particular kind of right-on fitness enthusiast, there isn’t much sign that consumers feel particularly antagonised by commercial gyms.

Indeed, it’s hard to think of a worse target if you were trying to prove how unfair modern British capitalism is. Health and fitness is one of our most competitive industries and seldom have consumers had such power, influence and choice in a market.

The raw figures on the UK industry are remarkable. According to the 2019 State of the UK Fitness Industry report, total gym membership in this country has now passed the 10 million mark, with well over 7,000 different fitness facilities available.

The range of different options is equally impressive – and a fine example of the power of a well-functioning free market to offer people what they want.

For shift workers, there are now a host of 24-hour gyms. For those who only want to work out every now and then, there are pay-as-you-go, no-contract gyms. For the more upmarket customer there are establishments such as London’s KX, which doubles as a private members club. There are LGBT gyms, women-only gyms, gyms in Mayfair’s old boys’ clubs, and gyms that double up as brunch spots and coffee houses.

The spike in demand has also meant all manner of classes are on offer, from hot yoga to zuu (primal movement exercises).

All of these options offer something just a little different to each other and quite a lot of them are booming as people try to improve their health, but also move away from traditional retail experiences.

And a diverse market means plenty of opportunities for entrepreneurs too. Young mothers who run their own yoga business build small communities with other parents, the city worker who’s headed off to become a personal trainer creates a community of like-minded folk in the big city.

Nor is the industry confined to the well-heeled professional classes – even in London there are now options that cost less than a fiver a week, and there are all sorts of concessions and discounts.

This all comes down to the abundance of supply, which forces providers to engage in cut-throat competition, all to the benefit of us, the consumers. To paraphrase Adam Smith in The Wealth of Nations ‘the price of free competition … is the lowest which can be taken’.

So, whatever Better Gym’s marketing team might have you believe, no one is being punished by greedy profit-seekers. If anything, it’s Better Gym’s own customers who are getting a raw deal. Despite its grandiose claims of putting people before profit, it’s not actually the cheapest option around.

For example, In my own London suburb BetterGym charges £30.95 a month for its standard membership – just down the road at The Gym it’s only £23.99, while PureGym is £26.99. This is not just the case in the capital. In Leeds, PureGym charges £14.99 per month, Trinity Fitness £15 and BetterGym £15.95. It seems for all the group’s lofty rhetoric, the free market is better at providing a low-cost option.

Which brings us back to the vacuity of the whole ‘people before profit’ sloganeering. In a properly functioning market, a business only makes profits by providing a service that customers want at a price they are willing to pay – what could be more people-centred than that?

Indeed, if you were being cynical, you might observe that the ‘people before profit’ message is actually that most capitalist of phenomena – a canny marketing ploy from a business trying to grab market share from its competitors.

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Julia Behan is a Research Associate at the Adam Smith Institute