Will New York Sports Club Go the Way of Crumbs?

Town Sports International Holdings, Inc., the publicly traded company that owns and operates the New York Sports Club (as well as the D.C., Philadelphia and Boston) brand of gyms has gone from 523,000 members as of fiscal year close 2011 to 488,000 as of Q2 / 2014. Where did those 35,000 members go? Probably CrossFit gyms, Soul Cycle studios and other, more streamlined fitness offerings such as Equinox’s value brand, Blink.

The road is littered with chains that overextended (the once ubiquitous 1980s brand Benetton comes to mind, as well as the recent Crumbs closings) but there is clearly a huge market for fitness. So, where did Town Sports go wrong?

Well, I think what is partially to blame is that they have been swimming in the same geographic markets for way too long and relied far too heavily on new members, at the expense of existing members. Their four primary cities are magnets for a constant influx of newcomers and that strategy had worked thus far but Town Sports has always had a reputation for aggressive, strong-arm sales tactics, difficult-to-cancel memberships and impossible-to-reach customer service people. They were able to run for a while, but the reality is that in the age of Social Media, they can no longer hide and their tactics are becoming transparent to the public. Figure in that those newcomers are Gen Y/Millennials – an extremely “social media savvy” segment – and you have a recipe for falling member recruitment and irreplaceable member attrition.

523,000 members in 2011! That should have presented a dream come true for Town Sports’ marketers. Jump on some promotions via email and the club front desk to get members to follow you on Twitter and like you on Facebook and, voila! A major thought leadership platform would have been born. Membership clubs are ideal for Social!

Yet, Town Sports is oddly quiet in the social space. As a matter of fact, it appears that Town Sports has shut down their Twitter feed and their Facebook page. Both have been dormant since 2012.

Due to some of the archived comments on their Facebook page, I suspect they went dark because they were receiving the kind of attention they did not want and were unable to handle. In other words, if they rarely responded to members regarding customer service issues via email and telephone, they certainly weren’t going to get back to members in the timely fashion that social media has begat. And with social media, it was no longer a private issue.

Some of NYSC's Unhappy Members Attempt Communicating with the Gym on Facebook

Some of NYSC’s Unhappy Members Attempt Communicating with the Gym on Facebook

Today, if one has an issue with a hotel or a restaurant or a store, one merely needs to tweet the issue to them and the customer service team kicks into action to help. Nothing like a public shaming to rally the troops.

Unfortunately, Town Sports has no customer service troops. There is simply no infrastructure for dealing with member issues. All the responsibility for customer service issues falls on the overburdened shoulders of individual club managers. If a member manages to escalate a complaint up to corporate, it languishes. Corporate is primarily a small team, which busies itself with issues of human resources, legal, real estate, operations and generally trying to ensure the shareholders are kept happy, which must be increasingly difficult. So difficult that they are poised to sell 151 East 86th Street, a building at one time a feather in their cap, to a developer for 82MM.

Town Sports seems to have entirely missed the point that social is about fostering a dialogue with your community, and not just another outlet for print advertising and a revolving door of job postings.

The only consolation to them is that, with its approximately 90 followers, it is unlikely that anyone is missing their Twitter presence. Only their LinkedIn page appears to be somewhat active, albeit strictly as a job recruitment tool.

Meanwhile, gyms such as Equinox and David Barton Gym appear to get social right. Equinox has a fun Facebook page for staff, members and anyone else where actual dialogues between members and staff occur – and it has more than 126,000 likes – while David Barton Gym’s Twitter is a vibrant, sexy and funky feed.

Town Sports still has a chance, they just need to begin acting less like a real estate holding company and more like a membership organization.

 

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