Bally Should Match its Rhetoric with Real Customer Service

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If Bally insists on sticking around, the company should match its rhetoric with some real customer service.

THEY'LL BE BAAACK A customer in Midvale, Utah, jotted down Bally's toll free number in the wake of a bankruptcy-related closing that took place in late 2008.THEY'LL BE BAAACK A customer in Midvale, Utah, jotted down Bally's toll free number in the wake of a bankruptcy-related closing that took place in late 2008.

Dear Bally Total Fitness: Please go away.

We can't take it anymore. You head toward bankruptcy. You declare bankruptcy. You emerge from bankruptcy. (Repeat.) You go through CFOs like a restaurant goes through hostesses. You spent years fraudulently accounting for your revenue and even got your former accounting firm into the act.

Granted, as independent club owners, we're not unbiased observers. Still, we're tired of the headlines, the embarrassment to our industry. Please - move along.

But, Bally won't. And what's especially annoying is that, sometime this year, Bally will be on the cover of one or more health club industry publications. CEO Michael Sheehan, who has been doing the yeoman's work of trying to restore this battered brand since mid-2008, will be shown smiling broadly with one or two of his executives standing proudly beside him. The headline will read "Up from The Ashes" or "A New Beginning at Bally," or something similarly upbeat and hopeful.

We know this because it has happened - more than once. For some reason we are not supposed to just care what happens to Bally, we are supposed to learn from them. We are supposed to read articles about them and think, "That's how we should run our business!"

Are they kidding?

Bally's business practices continue to be emulated by too many health clubs - even today, when you'd think they would have been marginalized by all of their financial woes. Just recently at one of our facilities, a new resident to our area bristled at the notion of monthly dues because "I still just pay $10 a year at Bally's." It took quite an effort not to respond, "Have you noticed how they keep declaring bankruptcy and we haven't?"

Every time Bally has attempted to reinvent itself, the story has been the same. They tell us how they are going to become customer-friendly, curtail old billing practices and make their business all about the members and their results. But then it's back to the same old way of doing business. They can't help themselves. Perhaps, despite everything - the bankruptcies, the revolving door in the executive suite, the faltering economy - they just can't overcome decades of ingrained corporate culture. Even today, on their web site, there's this gem about annual dues increases:

"[I]t is necessary to increase your monthly renewal dues in accordance with your membership agreement. Most agreements provide for annual increases of either 10%, $12.00, or in accordance with the increase in the U.S. Consumer Price Index. You should refer to your membership agreement to determine which type of increase applies to you."

Ah, yes. Nothing says, "It's not about the money" more than a guaranteed rate increase as a thank-you for being a member. And it's not that Bally has decided to impose this annual increase right up front when you join - the words just happen to be on the agreement. It's the agreement's fault.

Sheehan has been quoted as wanting to establish Bally as "the most trusted name in fitness." We'll take him at his word. But may we offer some advice?

1. Apologize. Stop being subtle, using upbeat messaging, soft colors and friendly images on your web site to deliver your current message. Say it plainly - Bally ran a disreputable business model for most of its history. You've poisoned thousands of consumers against yourself and all health clubs. Fall on your sword.

2. Create one simple membership with no commitment. On your web site, you start with "No Long Term Commitment." But your "Special Value Plan" is your most popular membership, and your "Paid in Full" is your best value. Plus, of course, you've got those pesky annual increases. We're not so naïve as to disagree with what you've outlined, and we do something similar in our business, but we don't have a reputation for ripping people off. So, create one flexible membership plan and stick with it.

3. Be so customer-friendly that it hurts. Being "the most trusted name in fitness" seems like a lofty goal for a company emerging from its second bankruptcy and whose membership policies refer repeatedly to its agreements. Naturally, membership agreements are vital to any club, but why wave the agreement in everyone's face? Trust cuts both ways, so break the agreement and do what's right. At our clubs, we bill members month to month, and (lo and behold) we often must contend with late payments and bounced payments. However, we happily waive late fees for members who have a good payment history. Such thinking and actions by Bally - simply by being willing to break the letter of the contract in an effort to build loyalty - would send a message to the market that this time, things really are different.

4. Put us, or somebody like us, on your board of directors. Finance guys are great, but we doubt anyone on Bally's board has been down in the trenches for a while. Anyone unclog a toilet lately? Dealt with a mom whose kid was disrupting child care? Calmed a manic member who couldn't get his favorite bike in cycle class? Spoken with a screaming member who was convinced he submitted his cancellation months ago but hadn't noticed he was still being billed? That's our world. We'd be happy to share it.

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