Planet Fitness Using AI to Reduce Membership Churn

Planet Fitness (PLNT) is installing “digital plumbing” across its fleet of stores/franchises to support the company’s AI ambitions. Over the next several months, the company will be building a “digital engine”; collecting member data from connected equipment. By 2019, PLNT intends on introducing AI supported virtual coaches; designed to motivate members to remain engaged (and to continue paying $10/mo.) by monitoring progress. Customized exercise routines and nutrition regimes, based on member performance (from an initial baseline), will be included.

Howie Long-Short: Planet Fitness has grown revenue 136% over the last 5 years; including 12.1% YOY in Q3 to $97.5 million. The company also added 31 new stores during the most recent quarter. PLNT shareholders have been on quite a roll. They got the positive earnings report in November, learned Trump’s new tax plan should boost EPS by 25% and now find out the company is investing in technology that will reduce churn rates; critical for a business that operates on a month-to-month basis with no commitments. Plus, they’ll own the valuable data.

Fan Marino: If your New Year’s Resolution is to join a gym, chances are you won’t be there for long. 50% of Americans drop their gym membership by the end of January and just 22% make it through the 3rd quarter. Gold’s Gym says most people fall off the cliff after 39 days. PLNT has found a pain point, I’m optimistic that positive reinforcement in the form of visual progress can extend that time frame.

How Planet Fitness plans to gain a competitive advantage with AI

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Author: John Wall Street

At the intersection of sports & finance.

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