CIO Innovator

CIO and IT team do the heavy lifting in Bally business transformation

Karen Goulart, Senior Features Writer

Imagine if this Yelp review typified the way customers viewed your company: "Do not ever, ever, ever buy a membership from them! Their customer service is completely a lack thereof."

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Guy Thier

As CIO at Chicago-based Bally Total Fitness, Guy Thier didn't have to imagine; he was living it. Even before acquiring the black eye of two bankruptcy filings in six years, Bally had developed a reputation for bullying sales tactics and poor customer relations. At the peak of its popularity, the company operated 440 clubs internationally. During the last few years, that number has been whittled down to 60 in the U.S. With this smaller, cleaner slate, Thier's challenge was how to use IT to facilitate a business transformation that would make Bally more customer-friendly and more customer-focused.

"The way I approached this is, I'm a consumer and a heavy mobile user and a heavy mobile experience person, and I get frustrated with poor service," Thier said. "So, at one point I just woke up and said, 'Let me look at Bally and see what we're doing that would frustrate me as a consumer.' I ended up with a long list of things at Bally that were broken or not member-centric."

Along with his 25-member team, Thier is changing Bally's culture from confrontational to customer-centric by tweaking mobile apps, incorporating social media and fixing back-end processes to deliver a more personalized, friendly experience.

Hitting the gym for personal and business transformation

To help Bally become more member-centric, Thier first made sure his IT staff understood the fitness center's customers. To do that, he put his team in the members' place -- literally. Come January, when New Year's resolution-makers flock to the treadmills, Thier's team joins them on the gym floor. Here, they observe pain points and successes to see how IT can make the club better for members, as well as their fellow employees.

"I'm striving to create business people with a technology background, as opposed to geeks who sit in cubes," Thier said, adding that he's believed in this throughout his career. "I have always wanted to be where the business interacted with its customers and really understand how that business serves its customers," he said. "As I built up the IT team here, I took people from the business and put them into IT. and put them into roles where they would interact with that business unit."

Taking a Page from Google

Just as important as knowing what customers need is having the time to address those needs. Thier borrowed from Google CEO Larry Page's policy of allowing employees to spend 20% of their week on innovation.

The Bally version of "20% time" revolves around the IT organization's innovation summit, an annual event about boosting business transformation. At the summit, Thier gives seed topics for employees to research. Mobile technology is a past example. Divided into teams, the staff is given six weeks to explore what other companies are doing in the topic space, and how Bally's can adapt these innovations. At the end of the six weeks, staff members present their findings to company executives. The executive team reviews the viability of the ideas presented, and some move forward. "It has allowed people to work together who don't normally work together; it allowed my team access to the executives -- and we get some great ideas," Thier said.

I have always wanted to be where the business interacted with its customers and really understand how that business serves its customers.

Guy Thier,
CIO, Bally Total Fitness

One winning idea from an innovation summit is the Bally "Results Center." Using a Microsoft Kinect for navigation, members can engage a variety of apps on a 7- by-4-foot video wall. Among the app collection is a motivational app that takes images of a member's body for comparison over time. Another popular app is a navigable human body on which users can click each muscle group to see videos on how to exercise those muscles.

As such innovations are added to clubs, Thier will be looking for feedback via social media. Part of the effort to soften Bally's image was the creation of Facebook pages for individual clubs that are managed by the staff at that club, not a marketing person in Chicago. "Now, when we monitor social media, such as Yelp and Twitter and Facebook, and see comments about Bally, we have the field staff reply directly to the customer," Thier said. "We want to make it a local, personal experience and enhance that relationship."

'Applefy'-ing Bally sales tactics

To drive the business transformation, Thier also looked for inspiration from companies that excel at customer service. (He isn't shy about mentioning Bally's overbearing, hard-sell tactics when it came to new members. He had been a victim of the "take you into a room and berate you until you buy something" approach. He saw it as a big problem a little technology could help solve.) Witnessing Apple Store employees casually chatting with customers and making sales on their iPads, he decided to try the same thing at Bally.

His IT team partnered with an outside firm to create an iPad app for Bally sales reps to use during gym tours. With the app, tours ceased to be whirlwinds ending with a pushy pitch in a back office, Thier said. Instead, they're more leisurely and focused on perks instead of payment plans. If and when a customer wants join the gym, he can do it on the spot on the iPad, signing the contract with a finger and swiping a credit card. "It changed the conversation from the hard-sell type of conversation to one about the benefits we can offer you and the benefits of fitness," he said.

Another iPad app built to benefit Bally employees shows pictures and key statistics of members who have recently checked into the gym. Along with a picture of the member, the app lists such information as how long the customer has been a member, his fitness goals and whether he's purchased personal training. The app helps Bally build a relationship with customers by allowing gym staff members to check in on those customers' personal goals -- and to suggest other services.

When it came to mobile app development to benefit customers, Thier wanted to make sure the apps were specific to Bally. "I took the theory that I don't need to create another calorie-counter or another workout tracker; there's a ton of free ones available," he said.

His team started with adding QR codes to the clubs' circuit training equipment. Each club includes a group of 10 pieces of equipment meant to be used together to complete a workout. By scanning the code with their smartphones, members can read about how to use a particular piece of equipment and about the benefits of circuit training. There are plans to add the code to all pieces of equipment soon.

Also coming soon to Bally is a concierge-style mobile app, similar to those deployed by many hotels and casinos, which will allow Bally's members to order items from the club's juice bar, pay for them and choose a time for pickup. "We'll have your picture, so we know what you look like and know what you ordered, that you already paid for it and that you're good to go," Thier said.

Polishing back-end processes

All the member-focused changes seen on the gym floor were important changes to draw in members, but in order to effect a real culture shift, changes had to be made on the back end. If Bally was to be a customer-focused business, its approach to customer relationship management (CRM) would have to change, Thier said. He started with the call center. "I lived through all of the negative pieces of Bally, along with the good pieces, but the call center was definitely an example of a broken process that had an impact on member services."

Instead of having "a collection agency on old technology," Thier put in KANA software designed to provide a "360-degree view of the customer, with all previous contacts and all previous correspondence at the agents' fingertips."

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With the new CRM system in place, new communication channels were opened so members could choose how they wanted to be in touch with Bally. "We opened up email and chat, and had a unified vision of the customer through those channels, and we started monitoring social media and responding to customer comments there," Thier said. Before the new CRM solution, he said, a simple task like mailing customers a copy of their contract took three employees two days to complete. Today, a mouse click sends it by email while the Bally's agent is still engaged with the customer.

Such culture shifts don't come easy, Thier warned. Newer workers adapted quickly to the technology, he said. The shift, however, was harder for longer-tenured employees who not only had to learn the new CRM software, but also had to transform from "hard-nosed collection agent behavior to supportive, service-oriented behavior," he added. "It took them a while to see the new employees coming in and 'getting it,' before they bought the change and became engaged."

Another pointer? None of the changes -- from customer-centric mobile apps to personalized social media to a new CRM system -- would have gotten off the ground without Thier's deep interest in the business. In his nine years at Bally, he has worked with six CEOs. Today he's the longest tenured member of the C-suite.

"I've brought a sense of stability to operations," Thier said proudly. "Through my diligence in learning the business and having my group learn the business, we have a thorough understanding of the Bally business model and a firm grasp on where we think it needs to go -- and we're not shy about sharing that."

Let us know what you think about the story; email Karen Goulart, Features Writer.


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