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« The Fitness Industry's Digital Divide - Leadership Should Embrace The Future | Main | The Health Club Consumer Market - Increasing Impact of Women »
Thursday
Oct282010

Where Is Bally Total Fitness Headed ? CBI Offers Clues

I read with great interest Patricia Amend's cover article on Michael Sheehan and Bally Total Fitness included in the November 2010 edition of Club Business International. The title, "A 21st Century Brand" is interesting. Certain operational moves made at Bally Total Fitness speak volumes about an organization that, I have a hunch, has an understanding of where the fitness industry is headed. Although as Michael Sheehan himself points out, "We'd prefer to be judged on the basis of our progress...".

As you know I've been writing and speaking about what the future of the fitness industry holds and therefore I don't think it a coincidence that the new management team at Bally Total Fitness is made up of 1) a former CMO from United Airlines, 2) a former CFO of the web travel giant Orbitz and 3) the former head of HR from The Home Depot. Not one of their new "C" level executives has deep roots in fitness, with the exception of Michael Sheehan himself. I think there is a reason for that. Growing a national fitness brand and designing and executing new consumer centric models that leverage technology are but one, but a significant component, of what I think the future is about. These skills are uncommon in the extant fitness industry so one should be paying close attention to Bally given their personnel moves. We've seen bringing in industry outsiders fail before with other national brands, but time will tell.

What do you think about Bally Total Fitness ? With their under performing clubs shuttered, debt eliminated and a vibrant new management team, will they rise from the ashes of 2 bankruptcy filings ? Contact me, Bryan O'Rourke, or share your views here and tell me what you think about the CBI article. Kudos to Patricia for her great article.

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Reader Comments (6)

Bryan,

Good stuff! Glad to see you putting this out there. Admittedly, I've not kept up with the mega-club scene over the past few years. I think most all of them shoot for big numbers and sell on gadgets and fleeting emotion while offering very little in return for the hard-earned money most people pay for a membership. Whether its $19 or $300 a month I think most clubs fall short of providing the fundamental results that most people come to them to achieve......Physical fitness and the relationships it can provide to those progressing in their fitness quest. Even if we look at it in basic terms like the 5 primary components of fitness, time and again we see huge numbers (majority of most club members) of inactive members and single dimension training active members (with little result) with very little fitness actually being fostered and cultivated by the big names in the fitness industry. These clubs will certainly look to business success stories from other industries and bring them in to structure the companies in a better way and I hope it works. But fitness is different, it's personal, it gets to the core of what motivates people. It's not a counter top, a plane ticket or a new roof, it's a significant emotional experience that must persist long-term in order to provide what people are paying to have. Until these companies actually begin supplying a result and not simply a quickly fading emotional charge, the public aren't going to buy it. We've progressed past it. People can hold business meetings with colleagues in 3 continents from their phone......a new row of treadmills isn't enough to satisfy their need for stimulation and possibility. They need a person, a relationship, an emotional connection that is strong enough to hold their attention and demand their effort long enough to create lifestyle change.

I'm loving the emergence of specialty studios, gyms and facilities that cater to very specific clientele with specific ideas of what their fitness lifestyle will look and feel like. Bally's has done a tremendous service to all of us by providing the fitness industry with huge exposure and a solid model that we can learn from and use to our benefit, but I think one major reason the company (and others) see themselves floundering is they simply do not give the consumer the very thing they are in business to provide. The gym-going public is figuring this out and are seeking new innovative ways to cash in on the results they want. From P90X to CrossFit and TRX suspension training, Zumba and countless programs and studios worldwide, the individual is taking the initiative to seek and find the method of attaining fitness results that resonates with them. My gut tells me the huge gyms and gym chains will hold on as long as possible, but I think they are an aging dinosaur who's lost it's way.

October 29, 2010 | Unregistered CommenterJared Meacham

Jared thanks for your thoughtful comments. I agree with your assessment on the new emerging specialty studios. Pure Yoga, Soul Cycle, Etc. Check out my recent IHRSA webinar content "How the Bricks and Mortar Fitness Business Is Changing and What to Do About It" http://www.bryankorourke.com/journal/2010/10/17/how-the-bricks-and-mortar-fitness-business-is-changing-in-th.html where I explore "market bifurcation". The content touches on several of your eloquent points. Great to hear from you Jared.

October 29, 2010 | Registered CommenterBryan K. O'Rourke

Bryan, I would be more hopeful if Bally had actually really brought in a "vibrant new management team." You need to do more digging...you'll find that many of the same bad actors are still in senior management. You should also ask why this "new" team allowed the "old" VP of Member Services to send out illegal renewals to past members. It tells me that it's just more of the same...and I highly doubt that anything has changed at all, or will change in the future. I'm afraid it's all smoke and mirrors, and it looks like you got snowed.

November 1, 2010 | Unregistered CommenterJames O'Keefe

A 21st century remaking???? Are you kidding me??? Bally total fitness is disgusting! It is all about the sales. I was one of their elite personal training managers over the past 8 years. They have changed the pay structure their so only senior management can make a living. They rob our bonuses when we make budget over some "fabricated" thing called "modified cop". It's their BS was to still commission money you earned if "club expenses" like electricity, water, telephones, and cleaning supply budgets are exceeded. Imagine working a sales job, busting your tail to make your sales quota, and then losing over 20% of your bonus money over electric and phone bills?? The personal trainers don't make anything. The starting pay is 2 hours a day at $7.50 an hour if your lucky. Read that again I'm not lying. This company is a sham. Filthy gyms because no cleaning crews. The make managers hose down bathrooms because they don't have cleaning crews. Yeah Mike Sheehan is the devil. He came in and destroyed the livelihood of many. He is squeezing every penny out of these outdated, filthy gyms. Don't fool yourself, Bally total fitness is one of the most vile companies in the United States. They should be closed for how horrible they treat employees and for the conning pay structure they have.

Bally is a dying brand. The leadership team will not be able to bring this back from 2 BK's despite getting a cleaner balance sheet. The company maintains another 75 clubs that need to be closed. The morale in the field is very low. The wages per position are no longer competitive. Clubs are dirty. Clubs are not growing revenue. Personal training is dead. There is not a strong strategy to pick this brand up off the mat. The leader is a cost cutter. There is NO cash available to even begin any consumer centric positioning. No rewards, gyms not meeting member's expectations since costs have been stripped. New senior team probably adds $2.5M more G&A to a brand that may be up against it's bank covenants already. Without growing revenues pretty quickly, I expect Bally to falter for the last time and liquidate within the next 48 months.

January 12, 2011 | Unregistered CommenterInsights Fitness

I too read the article by Patricia Arend with Michael Sheehan with great interest. I sent him an email shortly thereafter advising him that, as a Bally's member in good standing for 20 years, I finally got tired of no hot running water in the bathroom, filthy locker rooms and incessant announcements over a blaring PA system. I took advantge of a free pass to try out 24 Hour Fitness in August and joined shortly thereafter. It's as if I moved from a stinking, festering ghetto to Beverly Hills, but for less money.

January 4, 2012 | Unregistered CommenterTerry Hensley

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