There's a reason this is standard operating procedure among gyms. They know their target user is only going to actively use their product for a limited time, and the subscription model is sticky enough to monetize it for much longer.
The friction of admitting to oneself that it was a bad decision to join a gym one doesn't make time to actually use is what keeps people from cancelling on their anniversary date, and it's what keeps most gyms in business.
If you decide to instead only ask for monthly renewals, you make the work of retention 12x harder, with very few actual instances where you deter paying customers. When people check their card purchases over the course of the year and you show up 12x vs. 1x, even if it's the same amount of money it will be perceived as more expensive.
You also have the opportunity to better engage with people's brains' built-in fallibility to the sunk cost fallacy, which is also a lesson places like gyms learned a long time ago.
You see this in things like upsells for classes: a gym will send you a flyer every couple months about exciting new classes that are only $x more thanks to that membership you bought months prior ("just imagine if you were paying for this class on its own somewhere else"). People like thinking they are getting a deal, and want to make use of an existing investment they already sunk money into, and are sometimes willing to sink more money into the existing investment.
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There's a reason this is standard operating procedure among gyms. They know their target user is only going to actively use their product for a limited time, and the subscription model is sticky enough to monetize it for much longer.
The friction of admitting to oneself that it was a bad decision to join a gym one doesn't make time to actually use is what keeps people from cancelling on their anniversary date, and it's what keeps most gyms in business.
If you decide to instead only ask for monthly renewals, you make the work of retention 12x harder, with very few actual instances where you deter paying customers. When people check their card purchases over the course of the year and you show up 12x vs. 1x, even if it's the same amount of money it will be perceived as more expensive.
You also have the opportunity to better engage with people's brains' built-in fallibility to the sunk cost fallacy, which is also a lesson places like gyms learned a long time ago.
You see this in things like upsells for classes: a gym will send you a flyer every couple months about exciting new classes that are only $x more thanks to that membership you bought months prior ("just imagine if you were paying for this class on its own somewhere else"). People like thinking they are getting a deal, and want to make use of an existing investment they already sunk money into, and are sometimes willing to sink more money into the existing investment.