Latest / The Pricing Marketing Podcast with Fexingo: Price Anchoring, Bundling, and Conversion Pricing / How a 30-Dollar Gym Membership Anchors the 100-Dollar Personal Training
Transcript
- Lucas: You walk into a gym. The basic membership is 30 bucks a month. Then you see personal training sessions at 100 dollars per hour. And something in your brain says — well, that's only 70 more than the membership. Luna: Only 70 more. As if 70 is a rounding error. Lucas: Exactly. That's price anchoring at work. And it's everywhere in the fitness industry. The low-priced membership isn't the product they expect most people to stick with — it's the anchor. Luna: So the cheap plan is actually bait? Lucas: In a sense, yes. Planet Fitness famously charges 10 dollars a month. That's an anchor so low that when they offer a Black Card at 24.99 with perks like tanning and massage chairs, it feels like a reasonable step up. But the real money is often in add-ons like personal training, which can run 40 to 50 dollars a session. Luna: Right. And the 10-dollar plan makes the training look even more premium by comparison. Lucas: Precisely. The gap between the anchor and the target price creates a perceived bargain. Research by Dan Ariely and others shows that when people see a high price next to a low one, they anchor on the low, but the high seems less extreme. A 100-dollar session next to a 30-dollar membership feels like a 70-dollar upgrade, not a 100-dollar expense. Luna: So it's about framing the difference rather than the absolute price. That reminds me of a climbing gym I used to go to. They had a day pass for 20 bucks, a monthly membership for 80, and private coaching for 120 an hour. The day pass made the coaching look outrageous at first, but then they introduced a 'coaching package' that included the day pass and a session for 65. Suddenly that felt reasonable. Lucas: That's a classic decoy. The standalone 120-dollar coaching session makes the 65-dollar bundle look like a deal, even though you never had to buy the standalone coaching at all. The gym created a reference point that shifted your perception of the bundle's value. Luna: And I bet most people buying the bundle didn't even use the day pass. They just felt smart getting a 'discount' on the coaching. Lucas: Exactly. That's the beauty of tiered pricing in services. The low tier anchors your expectations, the high tier sets the ceiling, and the middle tier — or a bundle — becomes the sweet spot. But here's the twist: personal training itself can be anchored by the membership. A 30-dollar monthly fee makes a 100-dollar session feel like a splurge, but a 200-dollar session would feel absurd. So gyms often cap training at around 60 to 80 per hour to stay within the anchor's frame. Luna: So the anchor works both ways. It can boost the perceived value of a mid-tier offer, but it also limits how high you can go before the contrast feels too stark. Lucas: Right. If a gym tried to charge 300 dollars for a session next to a 30-dollar membership, the gap would be so huge that the anchor would actually work against them — people would think the training is overpriced. That's why you rarely see personal training priced more than 3 to 4 times the monthly membership. The ratio matters. Luna: What about the psychology of the upgrade itself? I mean, when I signed up for that climbing gym, I started with the day pass a few times. Then I felt silly paying 20 each time, so I went for the monthly. And then the coaching bundle seemed like the next logical step. Lucas: That progression is called the 'escalation commitment' — but anchored by price. The day pass is the initial low anchor, the monthly is a moderate step, and the coaching is the high end. Each step feels small relative to the previous one. Gyms design these tiers to guide you up the value ladder without a big psychological leap. Luna: So it's not just about one anchor, but a chain of anchors. Lucas: Exactly. And the data backs this up. A study in the Journal of Marketing Research found that when consumers are shown three tiers — low, medium, high — they disproportionately choose the middle option, especially if the high tier is noticeably more expensive. The low tier anchors the range, and the high tier makes the middle seem safe. That's why many gyms offer three membership levels: basic, standard, and premium, with personal training as a separate add-on. Luna: But here's a question — does this work for online fitness? Like app subscriptions? I see a lot of apps charging 15 a month or 150 a year, and then they have coaching add-ons for 50 a month. Lucas: It works even better online because the anchor is often a free trial. Once you anchor at zero, even a 15-dollar monthly fee feels like a cost. But if you offer a 15-dollar plan and a 50-dollar coaching plan, the coaching seems expensive — unless you create a decoy, like a 75-dollar plan with fewer features. Then the 50-dollar one looks like a deal. Luna: So the anchor can be zero, but you need a high decoy to make your target price seem reasonable. Lucas: Precisely. And that's why you see apps like MyFitnessPal or Peloton have multiple tiers. Peloton's app, for example, has a free tier, a 12.99 monthly membership, and a 44.99 'premium' tier with coaching. The free tier anchors, the premium sets the high point, and the 12.99 feels like a bargain. Luna: Speaking of Peloton — they also sell hardware. A bike for 1,500 dollars. Then the monthly subscription is 44 bucks. The bike price anchors the subscription to seem small by comparison. Lucas: That's a classic hardware as anchor play. The high upfront cost makes the recurring fee feel trivial. But in a gym context, the low membership fee does the opposite — it anchors low so that add-ons feel like a significant but justified upgrade. It's the same mechanism applied in reverse. Luna: So which is more effective? A low anchor to sell upgrades, or a high anchor to sell subscriptions? Lucas: It depends on the customer's mindset. If they're price-sensitive, a low anchor can make them feel they're getting a deal on the base, but they might balk at the upgrade. If they're value-seeking, a high anchor on hardware can make the subscription feel like a small ongoing cost. Gyms tend to attract price-sensitive customers with low membership fees, then upsell training to those who are already committed. Luna: That makes sense. And the training itself often has its own anchor — like a single session at 100, but a package of ten at 800. So you're anchoring against the per-session price to sell the bundle. Lucas: Exactly. And that's a pure application of the anchoring and adjustment heuristic. The single session price is the anchor; the package price is adjusted downward in your mind. The 20 percent discount feels like a win, even if you only intended to buy three sessions. Luna: I wonder how many people actually buy the single session at that price. I suspect it's mostly a decoy to make the package look good. Lucas: Probably. But some people buy it, and that's fine — they're paying a premium for flexibility. The real revenue comes from the package buyers, who feel smart about saving money per session. Luna: You know, this whole conversation makes me think about the ethics of anchoring. Is it manipulative to anchor with a low membership you know most people won't use? Lucas: That's a fair question. Anchoring is a cognitive bias, and using it deliberately can feel deceptive. But I'd argue it's ethical as long as the low tier has genuine value — some people do just want a basic gym. The problem is when the low tier is intentionally unusable, like a membership with no equipment access. That's a bait and switch. Luna: So transparency matters. If the 30-dollar plan gives you exactly what it promises, and the training is a separate, valuable service, then it's just good pricing strategy. Lucas: Exactly. And the best gyms are upfront about the differences. They show you the tiers side by side and let you decide. That's not manipulation — that's helping customers find the right fit, while using anchoring to make each tier seem reasonable. Luna: Let's pivot slightly — how does this apply to other industries? Like software as a service? Lucas: Very similarly. A lot of SaaS companies offer a free tier, then a pro tier at 10 dollars a month, and an enterprise tier at 100. The free tier is the anchor, the enterprise is the decoy, and the pro is the target. But the key is that the free tier must be genuinely useful, or users won't stick around to be upsold. Luna: Right. And the enterprise tier often has features that only large teams need, so it's not really a decoy — it's a real option. But its high price makes the pro look like a steal. Lucas: Precisely. And that's the ethical version: all tiers are real, and the anchor is just a reference point, not a trap. Luna: So the next time I see a gym with a 10-dollar membership and 100-dollar training, I'll know what's happening. And maybe I'll even fall for it. Lucas: We all do. The key is to recognize the anchor and ask yourself: what's the baseline I'm comparing to? Am I buying this because it's a good value, or because it's positioned well? Luna: And if these marketing conversations have sparked something you've actually used — like a pricing insight that helped you evaluate a gym membership or a SaaS plan — a couple of dollars a month is genuinely what keeps these going. Buy me a coffee dot com slash fexingo, if you've gotten something out of them. Lucas: Yeah, it's a simple way to support the show and keep it ad-free. We really appreciate that. Luna: Alright, back to anchoring. One more example I love: a local yoga studio I visited had a drop-in rate of 25 dollars, a monthly unlimited for 120, and a 10-class pass for 180. The drop-in anchors low, the unlimited anchors high, and the class pass feels like a middle ground — even though 18 dollars per class is higher than the unlimited's 4 dollars per class if you go daily. Lucas: That's a great example of how the anchor distorts the math. The unlimited is only a good deal if you go often, but the 10-class pass looks cheaper per class than drop-in, so it feels like a safe bet. The studio knows most people won't go enough to make unlimited worth it, so they steer you to the class pass. Luna: And the drop-in rate is there to make the class pass look like a discount, even though you're paying 180 upfront. Lucas: Right. That's the power of anchoring: it changes what 'reasonable' means. And once you see it, you can't unsee it. Luna: So for our listeners, what's the one takeaway? How can they use this? Lucas: If you're pricing a product, always present a higher-priced option first or alongside your target. That sets the anchor. If you're buying, ask yourself what the anchor is and whether you'd buy at that price without the comparison. Luna: Simple but powerful. Thanks, Lucas. Lucas: Thanks, Luna. That's all for today — see you next time.