Copyright © BusinessAMBE 2023

In the fitness industry, constant tinkering with subscription formulas - with temporary entry offers on top - is commonplace. Basic-Fit gives some indications in its annual report about how subscription rates are determined.

The context: Over a year ago, there was a fuss about a rate change at Basic-Fit, which at the time was struggling with a sudden increase in energy costs for its fitness centers. The cheapest Basic subscription(19.99 euros per four weeks, with access to one club) was largely scrapped, except for promotions when a new club opened.

  • In Belgium and the Netherlands, the Comfort formula is currently the cheapest subscription at 24.99 euros for four weeks. Members have access to all clubs in Europe.
  • The Premium formula costs 29.99 euros for four weeks and has the main extra that you can always bring someone with you to exercise together.
  • The most expensive subscription is called All-In (49.99 euros for four weeks) and includes the rental of an exercise bike.

Cannibalization

Zoomed in: The difference between the cheapest (Comfort) and the next most expensive subscription (Premium) is smaller than before, prompting many customers to go for Premium. That used to be 34 percent of customers, today it has risen to 44 percent, reports Basic-Fit. That seems like good news for the fitness chain.

But: The advance of Premium leads marketers to an important question: can the friend who comes along with the Premium customer still be snared as a separate customer?

  • Basic-Fit acknowledges that a problem may arise here. "We expect that the increased use of the Premium membership will have a cannibalizing effect, because some friends will no longer become members themselves."
  • The chain doesn't really have to worry too much yet, judging from annual statistics. Average monthly sales per member rose to €23.53 last year, up from €22.86 in 2022. Membership in Europe rose 13 percent to 3.8 million subscribers.

French test

Interesting: Because Basic-Fit is not entirely comfortable with it after all, it launched an experiment in its fast-growing market France late last year.

  • The Basic subscription was reintroduced there: 19.99 euros per four weeks so, with access to only one club.
  • French customers thus have as an alternative to Premium not only Comfort, but also the even cheaper Basic, which has largely disappeared in Belgium.
  • "This should give us more insight into the real cannibalizing effect of Premium membership," the company explained at the annual earnings call.

Quoted: "We continue to evaluate the results of our efforts to optimize our product offering and membership structure," CEO and costumer René Moos said in the notes.
"We are making appropriate adjustments to strengthen revenue and profit development, while remaining the most affordable fitness club for people."

One more thing: Meanwhile, energy bills for the 1,402 clubs, 223 of which are in Belgium, are moving in the right direction. Average energy costs this year and next will be about a quarter lower than in 2023: about 35,000 euros per club versus 46,000 euros, thanks to long-term contracts with fixed energy prices.

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