Case Study on "Bally Total Fitness Health Club"

Case Study 5 pages (1822 words) Sources: 5

[EXCERPT] . . . .

Bally Total Fitness is a high-visibility and respected fitness business but when a researcher digs into the company there is no service promise of substance and the narrative Bally uses to lure potential franchise owners is more hype than reality.

Presently has about 400 health clubs in the U.S. In Mexico, the Caribbean, South Korea and China, according to information provided on its Web site (www.ballyfitness.com). The company states that it is the largest "and only nationwide commercial operator of fitness centers" and moreover Bally claims it has 3.5 members and "over 40 years of successful operating experience."

Bally offers a Mission Statement (http://www.ballyfitness.com/company.aspx) that is not presented as a "guarantee"; but rather Bally says it is "…committed to providing great service and facilities that give everyone an affordable and fun opportunity to improve the quality of their lives through fitness" (www.ballyfitness.com). "Committed to…" is not a guarantee albeit it can certainly be construed as a pledge, even a promise if one wishes to split hairs. Bally says it is "…the best value you'll find" and that it will bring the customer "unmatched value -- that's our mission." Still, that is not a guarantee of anything. In fact on their page, "Our Fitness Approach," Bally appears to be throwing the ball back into the court of the consumer. "Ultimately, it's the activities you embrace every day that make the real difference in your health and fitness," the company explains on their "Our Fitness Approach" page.

Moreover, their "end goal" is to "help you help yourself with the knowledge, energy and motivation you need to lead

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a healthy and active lifestyle" (Bally "Our Fitness Approach"). Looking at the realistic aspects of a health club where people work out to lose weight, get fit, tone muscles -- and in some cases just to socialize and meet potential romantic partners -- how could a company like Bally guarantee anything?

Meanwhile Christopher Hart's article in the Harvard Business Review covers the bases as to what a company's guarantee should offer; it should: a) be "unconditional"; b) be easy to understand and "communicate"; c) be "meaningful"; d) "easy (and painless) to invoke"; and e) easy and quick to collect on" (Hart, 1998, p. 55). The Bally Mission Statement and the other Bally narrative that explains the company policies is not "unconditional" albeit the statements regarding their services ("b") are easy to understand and depending on the customer's approach to his or her membership the Mission Statement is potentially ("c") meaningful.

Is the Mission Statement easy ("d") to invoke? Once a member has visited a Bally venue a few times he or she will certainly believe or not believe the Bally assurance that a "balanced approach" to fitness is truly available. That balanced approach includes resistance training, flexibility, cardio, and "mind/body" along with "other challenging activities to give you total body conditioning" (www.ballyfitness.com "Our Fitness Approach").

"Bringing you unmatched value is our mission," Bally asserts on the "Our Fitness Approach" page. Once again, no guarantee, but rather a marketing pitch is what is offered. Hart writes (p. 56) that customers "shouldn't need a lawyer to explain the 'if's, ands, and buts' of a guarantee -- because ideally there shouldn't be any conditions; a customer is either satisfied or not." Certainly in the case of Bally no lawyer will be needed because there is not guarantee and hence no fine print to require a magnifying glass.

One wonders, what could a company like Bally guarantee? Hart (p. 59) states that a guarantee "builds marketing muscle"; a guarantee encourages consumers to buy a service by "reducing the risk of the purchase decision" and a guarantee brings in more sales "by enhancing loyalty," he adds. But with Bally the company apparently believes its millions in annual advertising will bring customers -- notwithstanding the dramatic downturn in the economy, the millions of Americans out of work and out of their homes due to foreclosure.

Bally's promotional narrative comes across to the researcher as more hype than promise. For example, in the section "Bally Franchising…" the company states, "Baby Boomers total 78 million and represent the largest and most health-conscious generation in U.S. history" (www.ballyfitness.com "Franchising"). That passage is correct on the estimated number of baby boomers; but it flies in the face of reality in America today in its assertion about boomers being "…the…most health-conscious generation in U.S. history." According to the Centers for Disease Control (CDC) (www.cdc.gov) 67% of Americans over the age of 20 are either overweight or obese.

In the U.S., the CDC explains obesity prevalence "doubled among adults between 1980 and 2004," and moreover more than one third of adults in America -- "…over 72 million people" -- were obese in the years 2005-2006 (CDC). The CDC article claims that adults 40 -- 59 years of age "were more likely to be obese compared with younger and older individuals." There are many in that age spread that qualify as baby boomers, and again, Bally's assertions about the "most health-conscious generation" in American history bleeds badly against the math.

Obesity brings with it heart disease, diabetes, "hypertension and certain cancers," the CDC points out on its Web page. Among the reasons people are overweight in America, the CDC continues, is that food is cheap and "widely available" (unlike developing nations in Africa, and elsewhere). The CDC also says, "…opportunities for physical activity may have decreased" (CDC).

Does Bally know that the Centers for Disease Control is putting out the word that opportunities for physical activity have decreased? Bally could certainly use that idea in their marketing and offer easy membership to fun workouts. In fairness Bally currently offers a free 7-day trial (as many other gyms will do) but the monthly membership cost varies from state to state. When a researcher runs a Google check on Bally, the "sponsored" Bally page that pops up offers this: "They say it takes six weeks to change your body, but it only takes seven days to fall in love with all that Bally Total Fitness has to offer" (www.bally.com). Bally is not guaranteeing that in six weeks one's body can be changed, but Bally does offer nutrition advice and provides links to better health in and out of the gym.

Hart's article in the Harvard Business Review (p. 60) alludes to ways to maximize marketing impact. Among those passages is "The negative consequences of service failure are high." The Web site www.consumeraffairs.com has a number of apparent examples of Bally service failure. Christella of Haskell, OK complained that she has had trouble canceling her contract with Bally. She states that she is in the military and was sent to a new station, in Europe. "I sent them a copy of my orders and a cancellation notice," Christella explains, and yet they "are still harassing me about this contract." They in fact filed a negative credit report and as a result Christella says she cannot close on a house because of the damage to her credit report. She asked ConsumerAffairs.com lawyers if she can sue.

Reading through the list of grievances from former Bally members there seems to be a pattern; again and again members complain that they have had trouble canceling their contracts. Also, numerous Bally members (or former members) who had to transfer because of military obligations complain that Bally caused them grief and didn't meet their obligations. In about 90% of the customer complaints, it seems Bally continued to hit credit cards after the customer thought he or she had clearly shown the documents necessary to be let out of the contract. Again, this is not uncommon for many businesses in the U.S. To somehow fail to stop tapping into a person's credit card; but for a nationally based, high-visibility company like Bally they should certainly try to tighten up their systems in this regard. "I feel I have been cheated," writes Joseph of Glendale, AZ. "The company never attempted to make good on their customer service promise" (www.ConsumerAffairs.com).

As to the question, "How difficult is it for the customer to collect on the guarantee?" The pertinent question vis-a-vis Bally would more appropriately be, "How difficult is it to get out of a contract when the military requires a person to move out of state or out of country?"

Competitors: 24-Hour Fitness is very much like Bally and offers many of the same membership benefits but does not offer a guarantee. Bally has 400 clubs and 24-Hour Fitness has 425; both offer a free 7-day trial period. "We've held fast to our mission of helping people change their lives," the "About Us" portion of their Web site asserts. Unlike Bally, 24-Hour Fitness uses celebrity endorsements (Derek Jeter, Lance Armstrong and Shaquille O'Neal, among others). National Fitness Center (NFC) offers a 3-day free trial period and a "guarantee" but it's a vague guarantee. If a potential customer doesn't like the center after the three days, "simply cancel your trial membership…it's that simple," the NFC Web site explains.… READ MORE

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Quoted Instructions for "Bally Total Fitness Health Club" Assignment:

“

Marketing Major Learning Objective: Demonstrate effective written and oral communication skills consistent with the professional marketing environment (COMM)

Course Objective 6: Create customer experiences that result in behavioral changes.

Most companies today that are serious about their customer relationships will have some sort of service promise. This would include guarantees, warranties, or other policies and procedures purporting to offer total customer satisfaction as part of its overall customer relationship management approach.

Please select a company of your choice(BALLYS TOTAL FITNESS AND HEALTH CLUB), preferably one with whom you have done business and had the opportunity to test the company*****s service promise, and post your choice in the Case Study Assignment conference area for approval by the end of Week 4. A copy or link to the company*****s guarantee/warranty or other text explaining their policies must be included in your company selection.

Retrieve and read the following article available in your Reserved Readings or through the UMUC virtual library retrieved through Business Source Premier:

Hart,a Christopher W.L. (1988). The Power of Unconditional Service Guarantees. Harvard Business Review, 66(4), 54-62.

The customer relationship concepts discussed in this article, your text, and any additional research you may conduct on the value of service promises and competitive service promises will provide the framework for your case study.

Prepare your case study by addressing each of the following questions:

Does the guarantee promise unconditional customer satisfaction as defined by Hart?

Is the guarantee easy to understand and communicate?

Is the guarantee meaningful in that it guarantees those aspects of service that are most important to the customer, including the customer*****'s time and risk, and meaningful relative to the price of the product or service?

Is the guarantee easy for the customer to invoke?

How difficult is it for the customer to collect on the guarantee?

Compare and contrast the service guarantee with at least two other direct competitors.

What recommendations for improving your company*****s guarantee based on the principles and practices discussed in the text and in the Hart article would you suggest?

Submission requirements are as follows:

Paper should be at least seven pages, but no more than ten pages, of double-spaced text.

These page requirements should not include title page, exhibits, copy of guarantee or other supplemental text.

Writing must reflect college-level analysis, composition, and style such as MLA or APA.

Name and page number should appear on each page.

(For online courses) Save your work in a .doc or .rtf file only.

Submit your .doc or .rtf file in your assignment folder as an attachment (or to your faculty member) by the end of Week 9 as published in the course schedule

Please note the following grading rubric will be used by your faculty member when assessing your case study. This case study is as much a paper on customer service as it is on your ability to think and write at an acceptable college level.

Grading Rubric

CRM content - selection

5-4

3-2

1-0

5-0

Company selection is appropriate for the assignment and copy of the service promise is attached as an exhibit.

Company selection is highly appropriate and service promise attached

Company selection is appropriate or service promise attached

Company selection inappropriate and no service promise attached

CRM content - Hart*****s six criteria

5-4

3-2

1-0

(5-0) *5=25-0

Q1. Discussion on the guarantee promise unconditional customer satisfaction as defined by Hart*****s six criteria

Fully discusses and critique*****s the company*****s guarantee promise unconditional customer satisfaction as defined by Hart*****s six criteria

Adequately discusses and critique*****s the company*****s guarantee promise unconditional customer satisfaction as defined by Hart*****s six criteria.

There is a serious problem with the discussion.

Q2. Is the guarantee easy to understand and communicate?

Fully explains and critiques the company*****s service promise communications

Adequately explains and critiques the company*****s service promise communications

Minimal explanation or critiques of the company*****s service promise communications

Q3. Defends a position as to the meaningfulness of the service promise

All aspects of the service promise are comprehensively considered with supporting arguments.

All aspects of the service promise are considered with adequate arguments

Minimal aspects of the service promise are considered

Q4. Explanation of processes or procedures for invoking the service promise

Fully explains the company*****s processes or procedures for invoking the service promise

Adequately explains the company*****s processes or procedures for invoking the service promise

Minimal explanation of the company*****s processes or procedures for invoking the service promise

Q5. Explains how easy or difficult it is for the customer to collect on the guarantee.

Fully discusses the ease or difficulty of invoking the service promise

Adequately discusses the ease or difficulty of invoking the service promise

Minimal discussion of the ease or difficulty of invoking the service promise

CRM content ***** Competitive Comparison

15-11

10-6

5-0

15-0

Q6) Compare and contrast the service guarantee with at least two other direct competitors.

Two direct competitors are compared and contrasted with the subject company on all relevant dimensions.

Two direct competitors are compared and contrasted with the subject company on some of the dimensions.

Major problem either:

> Not compared with 2 competitors

> Minimal comparison on relevant dimensions

CRM content ***** Recommendations

5-4

3-2

1-0

5-0

Q7) Recommendations of substance for improving service promise made that are supported by Hart*****s six criteria for a meaningful unconditional guarantee. Alternatively, lack of recommendations for the subject company is adequately defended.

Comprehensive, relevant, and literature supported recommendations are made.

Some relevant, and literature supported recommendations are made.

Minimal recommendations are made.

CRM content ***** Overall

5-4

3-2

1-0

5-0

Overall, paper provides evidence that student understands the importance of a service promise in the application of customer relationship principles.

The ***** clearly understands the importance of a service promise in the application of customer relationship principles.

The ***** shows a basic understanding of the importance of a service promise in the application of customer relationship principles.

The ***** shows minimal understanding of the importance of a service promise in the application of customer relationship principles.

CRM Content - Total

55 - 0

COMM -Purpose and Audience

5-4

3-2

1-0

5-0

Overall, the case analysis provides evidence that student understands the importance of a service promise in the application of customer relationship principles.

- the ***** successfully demonstrates the importance of service promise through the application of CRM principles

-The ***** addresses the assignment in a creative/ innovative way.

-The ***** goes beyond the requirements in some way.

-The ***** fulfills all aspects of the assignment.

-The ***** generally meets the expectations of the reader in terms of content, organization, language.

- The ***** does not fulfill the assignment.

3-2

1-0

(5-0) *4=20-0

- The ***** does a sufficient job of developing and following the main idea (thesis).

- Does not clear state a thesis or explain structure in the introduction

COMM -Organization and Structure

5-4

- The paper generally uses topic sentences to introduce ideas at the paragraph level.

- There may be some slight weakness in organization at either the macro or micro level; however, the reader can still follow the argument easily, and paragraphs are unified around central ideas.

- The paper exhibits serious problems with organizational structure that may include:

*****¢ > few topic sentences

*****¢ > paragraphs not centered

*****¢ on one controlling idea.

*****¢ >The order of evidence

*****¢ appears random

>difficult to follow the

argument.

Introduction clearly states thesis and explains structure of the paper

- The ***** develops a clear, strong thesis and presents clear topic sentences.

- The central theme of the argument generally understandable.

- There may be some slight problem with organizational flow or consistency in the argument

- The paper exhibits serious problems with organizational structure that may include:

*****¢ >The order of evidence

*****¢ appears random

>difficult to follow the

argument.

Conclusion of paper brings closure to the main thesis

- The conclusion clearly integrates the main thesis with the key findings in the paper

- The conclusion partially integrates the main thesis with the key findings in the paper

- No conclusion or conclusion has serious problems

COMM - Evidence/Arguments

5-4

3-2

1-0

(5-0) *3=15-0

Evidence is logical, contextualized and supported with relevant evidence from reliable academic sources

- The evidence presented is logical, contextualized, and appropriately researched and supported, and synthesized with the *****s own argument.

-The paper contains a controlling idea; it is clear to the reader what the main idea is and what the basic arguments are.

- There is indication of research that forms the basis of the evidence presented.

- There is a relatively successful attempt to synthesize research within the argument.

The paper exhibits several problems that may include:

>The paper contains irrelevant support, and there is insufficient analysis and/or depth of analysis.

>The paper does not contain research and/or does not adequately cite that research.

The analysis is sophisticated and considers other perspectives.

The analysis is sophisticated and considers other perspectives.

- There is clear evidence of analysis and an attempt to consider alternate perspectives

The paper exhibits several problems that may include:

> limited to no research

> Alternatives not

considered

Attachments such as exhibits, graphs, bibliography, etc. are relevant to the discussion.

The attachments are scholarly and very relevant to the discussion.

The attachments are relevant to the discussion

The attachments exhibit some problems either:

> are not relevant to the discussion

> do not some from

appropriate sources

Communications -Readability, Style, Mechanics

5-4

3-2

1-0

(5-0) *2=10-0

Paper written in MLA or APA style

MLA or APA style full met throughout the paper

MLA or APA style generally met but there are a few errors

MLA or APA style not met.

Paper is has been proof read and edited and is free of overt grammatical and typographical errors. Paper adheres to submission requirements.

-The tone and style are appropriate for the audience.

- There are no noticeable proofreading or grammatical errors.

- Sentence structure and diction are effective and diverse

- Submission requirements met

- For the most part, tone and style are appropriate for the audience.

- (NEED A WORKS CITED PAGE)

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