Why you paid for the gym but never went

I was on a call with a client, and the subject was how to get their customers to complete the onboarding process for services they had already signed up for. It turns out the struggle begins soon after people swipe their credit cards.

What makes this particularly interesting is that the sales process leading up to that swipe is intense. There are multiple back-and-forths, and prospective customers do a fair amount of internal work to determine if they’ll gain value from the service. By the time they sign up, they’ve made a fairly considered decision. But then it becomes a monumental task to get them to take the actions necessary to make the whole thing a success.

It gets even more curious because this is a monthly business-to-business subscription service. People sign up, pay, don’t do the things necessary to set it up properly, and then keep paying anyway. This doesn’t apply to everyone who signs up, but it applies to a meaningful majority, and my client hasn’t quite found a solution yet.

This got me wondering: what is the motivation behind someone’s consciously making a purchase, then not taking the actions necessary to make that purchase work? And why would someone continue paying for something they aren’t using, given there’s a material financial cost to that inertia?

I started looking for examples from my own life, or from people I know, that might demonstrate the same behaviour. And of course, I found one.

The unused gym membership

While this example doesn’t apply to me right now, it certainly did for most of my life. I can think of so many times over the years when I woke up one fine morning motivated to get fitter, did the online research, made the in-person visits, took the free trials, and did everything that comes with being sure that this is the place that will finally take me to the next level.

And then I swiped my credit card. There was this feeling of euphoria. A sense of accomplishment. Like the act of swiping the card in and of itself was the objective. And then I rarely, if ever, went back. I never scheduled the orientation. I didn’t do any of the free classes that came as part of the membership. I showed up a few times here and there, and then month after month, the charges kept stacking up.

Given that I’m referring to an act that happened, in the same sequence, many times over my lifetime, I can’t say for sure when I finally pulled the plug. But eventually, out of frustration, I cancelled my membership and conveniently blamed the gym for my lack of fitness. Yes, it was their fault.

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Think about it: if this isn’t your story, it’s certainly the story of someone you know. And there’s an interesting business parallel here, too. An entire industry has built a business model around the fact that some people will pay for a gym membership and barely use it.

But as I kept thinking about it, I couldn’t imagine this was a behaviour unique to gym memberships. I wanted to find something else where there was that same sense of accomplishment, excitement, or relief. That feeling of having finally done the thing I needed to do. That’s when I thought about my accountant.

I had done the thing. Or had I?

When I moved to Canada in 2019, I had to submit my personal income taxes for the first time in my life. I’d come from the United Arab Emirates, where there’s no personal income tax, so filing a return wasn’t something I’d ever had to think about. For the first few years in Canada, I did them myself, since they were fairly simple. As life got more complicated, I hired an accountant, and for a minute, I felt a real sense of relief. The relief you get from filing your return.

That lasted until he followed up with a whole bunch of emails asking me to do the hard work. That’s when I realized I still had a lot of work of my own to make this succeed. Because it was taxes, I couldn’t defer it, so I did the job. But the mechanism at play was almost the same as the gym. I had made the purchase. I had taken what felt like responsible action. I had done the thing that, in my mind, needed to be done. Except I hadn’t. There was still work to do, and if there had been no risk of the Canada Revenue Agency’s coming knocking, I suspect I might have hired the accountant, deferred the work, and eventually blamed him for not doing a good enough job.

A similar thing happened more recently with a course I signed up for. I’d been talking about wanting to take it for months, spent weeks doing the research to find the right one, and when I finally signed up, I told my family and we celebrated. The euphoria was real. That was weeks ago. I haven’t opened the coursework once. But I signed up, and some part of me still counts that as progress.

That got me thinking about what might be happening in these situations.

The good feeling comes first

There’s a concept in psychology called moral licensing, which describes what happens when doing something we perceive as good gives us a kind of psychological credit that makes it easier to skip a subsequent good behaviour. The research is particularly interesting when you think about how concrete that first action is. I paid. I signed up. I hired someone. I have the login. Those things happened and they’re tangible. They give us something we can point to and say, “I did it.”

The work that comes after is different. It’s harder, less exciting, and usually somewhere out in the future. One description of the phenomenon from the research is that “the good thoughts had functioned as a substitute for good action.” That feels remarkably close to what I was experiencing with the gym, the accountant, and the course.

The purchase itself had become emotionally satisfying, not because I’d achieved the thing I wanted, but because I’d finally committed to achieving it. Sometimes we confuse paying for something with the thing itself.

But sometimes paying is the thing

Once I had that thought, I started wondering whether there were situations where paying really was the thing itself. And then it came to me: insurance.

When you buy insurance, the payment can essentially be the entire deliverable. You’re paying to transfer a risk so you can stop thinking about it. There isn’t necessarily a series of actions you need to take after to make the purchase work, the way there is with a gym membership or a service that still needs onboarding. The relief you feel when you buy it isn’t a substitute for some future action. The payment is the point.

That helped me understand what was different about the other examples. The problem isn’t spending money or even paying for it before you do the work. The issue is mistaking the purchase for progress.

I recently wrote about what happens when spending gets easier, and how frictionless spending can make us forget what we bought. This is different. Here, you remember the purchase and may feel very good about it. The danger is that the feeling of accomplishment arrives before the accomplishment does.

How to ensure you get full value for your purchases

I don’t want the takeaway here to be that you shouldn’t join a gym, hire an accountant, sign up for a course, or spend money on something you genuinely believe will improve your life. That would be missing the point. Sometimes spending money is exactly what needs to happen. But knowing how this works might allow us to be a little more mindful about what happens immediately after.

You might get that rush of excitement when you finally sign up. You might feel relief that you’ve finally done the thing you’ve been talking about for months. You might even celebrate it. Enjoy the feeling, but take it with a grain of salt, because on the other side of it may be the real work. And that work is what ultimately determines whether the money you just spent creates the outcome you wanted.

It isn’t only about money either. The same rush shows up when you join a board to pad your resume, or take on a title that sounds impressive, right before you realize the actual work is still ahead of you.

The next time you’re about to spend money on something that requires you to do something after the purchase, maybe ask yourself: am I paying for the thing, or am I paying for the feeling of finally doing the thing? And if there’s still work to do, what happens after I swipe the card? Because sometimes the purchase is an accomplishment. And sometimes it’s just the moment when the real work begins.

Read more about saving and spending:

• What do rising bond yields mean for Canadians?
• Why Ontario is seeing more consumer insolvencies than the rest of Canada
• Rent or buy: When does homeownership actually make financial sense?
• Synthetic identity fraud: The scam where there’s no real victim to find

About Vickram Agarwal

Vickram Agarwal is a multiple-time founder and award-winning entrepreneur. He leads S1:E2, a business strategy consulting firm, and contributes to The Globe and Mail, Entrepreneur Magazine, and Inc.

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