Consumers flock to health, finance and learning companies to reach their goals. These firms are well aware – and many are seizing the moment to profit.
Get fit. Improve mental health. Make a budget. Learn a language.
New year’s resolutions provide an opportunity for brands to pitch consumers on products or services that will help them achieve their goals. Companies know there’s revenue potential, especially in membership-based models; many say the start of the new year is an important time to attract new users whom they hope will convert to long-term active paying customers.
“There are specific spikes in demand for certain products around new year because of resolutions,” says Neil Saunders, US-based managing director at GlobalData, a consulting firm.
If these subscription-based companies can manage the careful balancing act between spending on customer acquisition through discounts and promotions, while considering return on investments in the months to come, they can cash in on the people eager to spend on platforms, services and products that can bring them closer to success. The habits of US consumers serve as an example of how resolutions can be major commercial moments.
Analysts say the start of the new year is an important time for health-focused businesses. Nearly half of Americans polled in an October 2023 Forbes Health-OnePoll survey said they were prioritizing fitness in their new year’s goals.
“People have been through the holiday season, they’ve probably been overindulging,” says Saunders. “They’re now focused on new year’s resolutions to do with wellness and losing weight.”
New York Sports Club, which operates chains of gyms and fitness facilities in the US – such as popular brands including its eponymous club, Lucille Roberts and Fhitting Room – says January is a critical time for customer acquisition, with new member sign-ups as high as two-times a typical month.
Kari Saitowitz, chief marketing and creative officer of New York Sports Club, says the club banks on the new year’s period as new business driver: targets for new sign-ups are two-to-three times the goals for most other months. It’s not necessarily a revenue play at first; the company offers discounted memberships for new joiners to get them through the door. Last year, New York Sports Club offered new members a $1 joining fee and complimentary membership for the first month.
The long-term profit lies in continued conversion. With the influx of sign-ups, New York Sports Club – and similar membership-based businesses – are hoping these new faces will go on to become loyal customers who pay the standard, higher monthly membership fee after joining on a discount.
“The idea is to get people started off with a really compelling offer for January… you’ve got to win them over month after month,” says Saitowitz. At New York Sports Club, a key part of this is ensuring they have free orientation sessions with trainers. They must look at strategy for retention after the new year’s rush, too: for instance, she says, the company is in the process of revamping its referral and incentive-based rewards programmes.
New York-based Talkspace – which works directly with consumers and employers to provide mental-health counselling – says January is a natural time for people to seek out therapy, especially after spending time with family or friends during the holidays.
“November and December are often very slow months for therapy. Clients have a lot going on as the holidays are happening,” says Liz Colizza, director of research and programmes at Talkspace. “January comes, and people start to look at their lives differently. Everyone takes a look at what the next year is going to hold.”
At the kick-off of a new year, the company has invested in resolution-related marketing to bring in users. Since 2018, Talkspace has organised ongoing brand campaigns with ambassador and American Olympian Michael Phelps, which help users set new year’s intentions and prime them to continue throughout the year – which the mental-health company, too, hope leads to ongoing business. In January 2023, would-be users were encouraged to engage with an Instagram post from Phelps as part of a contest to win free therapy sessions.
“It’s pretty common for us to have some sort of [theme] around, setting your intentions … thinking about your behaviour and what you want to do in the coming year,” says Katelyn Watson, chief marketing officer at Talkspace. In Q1 2023, the platform reported a 34% increase in the number of therapy sessions covered by insurance, compared to the prior quarter.
Personal-finance platforms often experience similar consumer interest during this time, says Jesse Mecham, founder and CEO of global digital budgeting platform YNAB. “[With] gyms and personal finance, we share so many relations, where people know that they’re not doing it right, and they could be doing better,” he says.
YNAB is a subscription business, billed monthly or annually. The “New Tear’s bump”, as Mecham calls it, can result in around a 25-to-50% boost in new member sign-ups in January. The company typically increases its advertising spend in the lead-up to New Year’s Day to capture more interest in the platform.
Similarly, Eric Dunn, CEO of personal-finance platform Quicken, says the company typically gets around 15% of its customers in January. New customer revenue, however, represents, only 10% of the company’s revenue, with 90% coming from renewals. These re-ups can happen throughout the year, but are weighted more heavily around the first two calendar quarters, with Q1 being the largest renewal quarter, says Dunn.
As people also seek personal enrichment, Berlin-based language app Babbel sees an opportunity. “New year’s resolutions are a huge boon to language learning, as with so many self-improvement activities,” says Julie Hansen, Babbel’s US CEO and CRO.
The company offers price promotions around the new year, driving a “significant boost in Q1”, with January being the peak month for US revenue and sales, says Franka Schuster, the company’s principal corporate communications manager. Hansen adds, “For Babbel, January is the largest month of the year by far.”
Duolingo, based in Pittsburgh, US, also offers a discount on its premium subscription only once per year: in January. Consequently, the new year’s period is one of the company’s biggest customer growth periods of the year, according to Sam Dalsimer, Duolingo’s global communications director.
Not every company that might see a boost from resolutions uses goals as a marketing tool, however. For global fitness-and-health company Equinox, 2024 marks the second year they are running an anti-new year’s resolution campaign called “We Don’t Speak January”, in which they don’t allow signups on the first of the year.
“Our members commit to being in our club every day, and so when we look at what the mainstream fitness industry is doing around [1 January] … they’re driving new year’s resolutions and using that as a gimmick to sell memberships,” says Jeff De Korte, chief marketing officer at Equinox. (Some people have criticised the move as a “stunt”.)
Whatever way consumers receive the marketing approach, Equinox still sees strong member uptick for the remainder of the month – the company says in 2023, Equinox had its largest January sales month in history, approximately 20% higher than January sales prior to the pandemic. And due to the company’s membership model of only year-long contracts – something De Korte says he believes promotes a long-term investment in wellness – this spike in sign-ups represents a full-year revenue boost.
Ultimately, despite the surge in resolution-related business early in the year, sustained revenue isn’t a given. Companies that see mass sign-ups still must retain customers – especially as they drop off when giving up on their new year’s goals. “They’re trying to lock customers in, because one of the problems with resolutions is people make them, they kind of stick to them in January and as the year goes on, they kind of fade into the background,” says Saunders.
Especially right now, promotions around the new year’s period might be important to some inflation-weary consumers – but during an economy in which consumers are conscious of their discretionary spending, companies will be eager to see if new members stick with self-improvement, and invest beyond the first quarter of the year.