2020 was a long year for 24-Hour Fitness CEO Tony Uber and his team. Not only were they dealing with the COVID-19 pandemic and the resulting mandates to temporarily close health clubs, but in June, the company was forced.
“It was a leadership and management challenge that has got to be pretty unprecedented in time,” Uber told Club Industry during a phone interview in January.
To survive, Uber and his team had to make difficult decisions, such as furloughing staff in March 2020, although they kept on more corporate and club employees than may have been warranted by the circumstances. The reason? They needed those people to help the company thrive. And toward that end, the team adapted a mentality beyond just “hunkering down” until things cleared up. Instead, they worked on their change initiatives to transform the organization.
As part of the shutdowns, the furloughs and the Chapter 11, the team re-allocated positions between departments, adding talent and capabilities in certain areas while eliminating positions in others. Inside the clubs, they changed operations, revising job descriptions, compensation plans and organizational structures.
Much of that reorganization was in the area of sales. Prior to Uber joining 24-Hour Fitness, the company had begun implementing a new club membership process that virtually eliminated sales staff based on research that indicated people dislike a “hard sell.” The overall effort, called ECO, wasn’t well implemented and resulted in membership decreases, Uber said, although he declined to share how much of a decrease the company experienced.
Now, the company has reinvented its approach and crafted roles for club sales and service experts in recognition of the dual responsibility of engaging and enrolling members while ensuring member needs are met. Senior sales and service experts work with sales and service associates, and compensation plans offer incentives for club teamwork. The focus of the new sales process is to meet customers where they are and sell to them the way they want to be sold, rather than how the company wanted to sell to them.
It’s still early in the implementation process, but the performance has exceeded Uber’s expectations in the markets where clubs have been able to remain open, he said.
24-Hour Fitness also is working to meet customers’ needs by adding third-party content to its 24GO app that includes more than 1,000 free on-demand workouts to support fitness at home or in the club. The app also provides for touch-free in-club check-in at indoor and outdoor club locations and offers a workout reservation system for those club markets that require reservations per local government and public health agency guidelines.
Company Size and Future Plans:
Changes occurred beyond the operations and offerings within clubs. 24-Hour Fitness also downsized its club numbers from about 450 prior to the Chapter 11 filing to about 300 clubs in 13 states now. Prior to the Chapter 11 filing, the executive team had identified that the real-estate portfolio needed to be “rationalized” and had done a strategic review of clubs based on financial factors, past and potential future club performance, geographic considerations and the number of clubs needed to serve a given market, Uber said.
The cooperation of the landlords throughout the process helped the company come to a resolution that was in the best interest of 24-Hour and the landlords, he said.
Looking forward, Uber wants to reinvest in the remaining clubs in part by re-allocating more than 3,000 pieces of the best equipment possible and adding turf and half racks to the clubs.
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