Are private clubs shooting themselves in the foot?

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Among the regular readers of this Golf Inc. Critical Issues Blog is Robert “Bob” Hall. The head of his own marketing and investment firm, Hall has been especially vocal about the shortcomings of private clubs when it comes to membership recruitment, as seen from his vantage point as both a club member and as a marketing professional. He recently offered these observations about what clubs need to do to avoid fiscal disaster in these tough economic times. 
 
Private golf and country clubs today are paying the price for their poor management, lack of experience (mostly with member owned/member managed clubs) personal agendas and egos and the most critical: not knowing what business they are in.

Do they fully understand that they are in the dues business? Membership dues are approximately 70 percent of all revenue generated by private golf and country clubs. Check your records to establish how much has been budgeted for membership replacement. Has this operational cost” ever been the top priority at your club? Using $7,000 per year in dues and the average membership life span of 14 years, my math tells me a member is worth $98,000 minimum. How much would you invest to buy $98,000 in value?

Now let’s go to Phase Two of the dues business. It’s called marketing and sales. Do you have a sales force? A membership director or manager? Normally member-owned and managed golf and country clubs have an appointed or volunteer membership chairman.

This rarely works because the pay is zero and the results are usually zero as well. Membership people on the payroll in general have a poor track record because the “don’t kill the job” union mentality is there. Do a good job and you are out of a job.

Salary plus commission works better providing the salary is low and the commission is high. General managers in charge of sales are a disaster. They’re too bottom-line conscious. The best system of all is to hire people on a straight commission.

At the present time, many golf and country clubs are running scared. They are having fire sales to acquire new members. In essence, they are telling their marketplace they are in trouble. Buyers are always leery when a price is low.

Clubs are running ads that don’t sell nor motivate prospects. Advertising agencies’ use of clever verbiage, designs more to impress their peers or competitors just don’t sell. Unfortunately, the clubs paying for these ads don’t know the difference.

There is a simple sales strategy that has been successful for centuries: Create a need. Create a reason to buy.

Don’t blame your current problems on the economy. What is happening now is an accumulation and culmination of many mistakes made over the years. Member owned and managed clubs are the biggest victims and violators. Leadership, I truly believe, is sincere, honest and dedicated. But the biggest flaw is inexperience in running a golf or country club Volunteers don’t get paid. They never fire other volunteers and when a volunteer knows what he or she is doing, they get resistance. Take it from someone who knows.

Do you agree with Hall's opinion? What strategies have you found work for membership recruitment at your club? Do you believe that a professional sales staff is a must in today’s difficult selling climate? Share your opinions with us now.

 

 

 

Pri

Comments

Obviously Bob Hall makes a lot of great points. I am sending this article to our board and hope they are able to use this good info to help save our club.

You are 100% correct. I think it is part of a sesmic change that will happen in golf however. Clubhouses will be designed for the true needs of the 21st century. Golf courses will not have wasted land. Conditioning will be less perfect and more economical.

I think one of the best programs I have seen and used is to finance memberships. This way we get new memberships for a little amount at sign up and basically discount the balance of the membership fee requirement and receive that cash to operate. It also gives us additional membership dues revenue as well as cart fees and food and beverage income as it increases our membership base.

All of Bob's points are very valid. As Robert Dedman, the Founder of Club Corp, used to say..."The Club's business is nobodys business". Meaning that in Member Owned and Managed Clubs there are no professionals that are schooled in Club Marketing. The key today in Membership Sales is to attach it to real estate so there is some other value attached verses emotional value. In addition, the Membership Department is often saddled with a huge income budget to produce but a very small expenese budget. As Bob says....zero spent on marketing is zero return. What worries me is that the Members who need to know this information are the same Members who do not read this sort of publication because they already have the answer. A great quote from Mark Twain..."It is not what you don't know that hurts you...it is what you know...that ain't so...that hurts you.

Bob Hall makes a number of good points. In addition to the marketing concepts there must also be something worthy to sell. As one who has appraised many private clubs, the trend among those successful clubs has seemed to evolve around taking what many times is an outdated clubhouse with older amenities and refurbishing them with up-to-date amenities such as fitness centers, babysitting areas, and other key items that appeal to the new younger crowd. It is not enough to take a small room in the corner of the clubhouse and throw a couple of treadmills in there and say you have a fitness center. The private clubs today must compete, to a degree, with the fitness centers who are in business for fitness only. The other thing that has been successful in the private clubs I have appraised has been incenting existing members to bring in new members. Doing this in a way that is truly a worthy incentive seems to give traction to clubs who are fighting the current economic trends.

Apathy, indecision, and lack of action best describe what I find with most private clubs in regard to their efforts to enroll new members. I write a bi-weekly article for Legendary Golf Management. My article from two weeks ago follows. I believe it sums it up well. Help, I need more members! I hear this refrain from Private Country Clubs all over the Country. With a falling stock market, unemployment at all time highs, and more homes in foreclosure than at any time in history, Private Clubs are experiencing record high attrition and are finding it increasingly difficult to find new Members. Yet, I am amazed at what I hear after a few questions to club managers and the lack of action being taken to do something tangible to gain a better result. Does any of this sound familiar? (A compilation of my conversations with Private Clubs) Bob: How many new members have you enrolled this year? Club: 3 or maybe 4. Bob: What is your goal for this year? Club: We need about 40 new members to cover our attrition and provide a net gain. If we don't get to 40 we won't have enough in Initiation Fees, dues income, and other Club spending to operate the Club at its current level. We'll either have to raise dues, cut expenses or assess the membership. But, we don't want to do any of those things as we are afraid we'll lose more of our current members. Bob: Great, so you understand the critical importance of enrolling new members? Club: Yes, we know we have a problem and have to do something about it NOW! Bob: A sense of urgency! Outstanding! So what current activities are you utilizing to bring new Members to your Club? Club: Well, we're thinking about some type of incentive program to our members if they bring in a new Member. Some type of reward. Bob: Ok, so you are planning a member referral program? Club: Well, not really. We tried that once a few years ago and it didn't work too well. Bob: Hmmm, so you are going to go to the 3 or 4 new members who joined this year and ask them for referrals? Club: Well, not really. We don't want them to think we need new Members. Bob: Of course not. So you want to keep your need for new members a secret? Club: Well, sort of. You know our reputation in the community is important and if the word gets out that we're looking for members, it could hurt us. Bob: Reputation is so important, isn't it! So what specific activities do you have your Membership Director focused on to covertly get the word to people who may have interest in joining the Club. Club: Membership Director, what Membership Director? Bob: You know, the person responsible for selling memberships at your Club. Club: Oh, we don't have one of those. If someone asks about membership we have the girl in accounting talk to them and on weekends one of the assistant golf pros takes over. Bob: Well, you're certainly covered then. Club: Yes, someone is here all the time. Bob: Great. Are you working with realtors in your area to introduce new people in the community to the Club? Club: One of our members is a realtor so I'm sure that's happening. Bob: Undoubtedly. What about a guest registration system to capture the names of guests, ensure the integrity of the guest policy, and gauge each guest's interest in membership with a few short questions? Club: The golf shop says it's too hard to get members to register their guests. It takes time and everyone is anxious to get to the range to warm up before their round. Bob: Yes, inconveniencing the golf shop wouldn't be right. How about your database of prospects for membership, how are you using that? Club: Well, we really don't have a database. Bob: How about sending an invitation for a Discovery Day at the Club to select areas of town that represent good prospects demographically for new members? Club: Our Reputation, remember? Bob: Yes, I remember. I could go on and on but you get the point! There is nothing more important for a Private Country Club than growing its membership. Yet, in hundreds of Private Clubs across the Country, these very scenarios, that seem so ridiculous, go on every day. The very lifeblood of success in Private Clubs, a growing membership, the #1 Most Critical Success Factor is constantly monitored but never acted on to bring new members to the Club. Owners and Boards know they are trending the wrong way, call to talk about it and get ideas, agree that what they hear makes sense, then just continue to do the same things they've always done and watch as the death spiral continues. Want to succeed in Membership? Then get busy with the following! Professional Sales You MUST HAVE a trained professional salesperson in the role of Membership Director on a commission basis whose sole role is prospecting for and closing new members. Think about this. The most critical factor for success in a Private Club is success in membership, yet it is treated like a part time position with people who have no sales training charged with the task of bringing new members to the Club. Would you put the girl in accounting in charge of golf course maintenance? Would you put the receptionist with the nice personality in charge of the kitchen? Of course not! So, by the same token, putting anyone other than a skilled sales professional in charge of membership sales is doomed to failure and is sabotaging any real sales opportunities you generate. Follow this link for information on our Membership Sales Success System, a training guide for ensuring success in Membership sales. A Private Club Commander Website Your website should be far more than just a series of bland, static pages that looks like every other club's website. Your website should be the center of all your marketing activities for membership sales and all other revenue sources you are trying to generate for your Club. Is your website a data collection machine? Is your website tracking all of your marketing activities? Is your website automatically responding to all requests made in a professional manner? If not, your website is not doing all it can to be the vital tool it should be to help with all of your marketing efforts. Planning and Accountability Your Membership Director and General Manager must have specific, written, quarterly plans to bring new members to the Club with the actions that are going to be taken specified, including dates, the goals for each activity, and the person(s) responsible for carrying out the plans. Planning for success is a basic of sound business yet consistently ignored when it comes to membership. A Budget for Marketing Resign yourself to the idea that getting new members is going to cost money. Leads, prospects, and new members cost money. How much depends on each Club's unique situation but members are not just going to magically appear at your door. And finally, Do it NOW! Stop thinking about it and start acting. Nothing is going to change if you don't take steps to change what you are doing. Do not continue to monitor your negative trends and hope they change. Unless you do things differently, your outcomes are not going to be different. Take the prudent steps any responsible business would take to reverse a key indicator of business success! And, DO IT NOW! For Legendary Golf Management, Bob Devitz President and CEO www.legendarygolfmanagement.com About Us Bob Devitz is the President and CEO of Legendary Golf Management and is an expert in the operations and marketing of Private Clubs. Bob has over 25 years of experience in the industry, primarily in senior management roles with ClubCorp, an industry leading “for profit” company. Bob has an MBA from The Florida State University, a BSBA with a specialization in marketing from The University of Florida, and is a member of the PGA of America. Having worked with hundreds of Private Clubs during his career, Bob brings results driven, bottom line approach to the Private Club Industry.

As a member(yes, one of the types that Bob says 'rarely work'!) who's responsible for the marketing of our private members nine hole golf club in Reigate, Surrey, UK, I thought the following might be of interest: - over the last two years we've recruited 75 new members, a 15% increase overall - the club has enjoyed one of its best years ever, financially speaking - we started some 4 years ago, focusing on researching members' perceptions, likes and dislikes, etc. and developed a marketing strategy with much of the feedback on board - we developed the club's website into an effective marketing tool, and more recently gave it a complete makeover - see www.reigateheath.com and ask yourself if your's is as good - we initiated a change from an old fashioned club secretary to a PGA qualified Club Pro who wanted to be our club manager. He's been with us for the last 2 years. - we initiated a Gateway membership, giving people the opportunity to try out the club membership at a reduced rate for a year, and advertised it through 2 well branded and designed adverts. This raised 55 applications in the first 3 months of the campaign - the Gateway idea became a permanent offering in our Memberships range - we totally re-branded the club, using every item of collateral we could, from scorecards to the flag, stationery, bag tags, etc. - we developed a Course Guide with Eagle, the best in the UK for these items, using aerial oblique very high resolution photography of each hole of the course to create what many regard as possibly the best course guide they have ever seen. We then used the spare pages around the hole pages to create a proper brochure of the club, plus some advertising. - we formed an alliance with 4 other clubs locally, which is about to be launched. It enables our members to play at any of the other courses in the group for a nominal sum, thereby extending the benefits of being part of a private members club. - we installed the world's best online tee time booking system from BRS Golf, because we wanted to manage the 9 hole course properly (much more complex to do than mere 18 or 36 hole courses), and enable anyone to book 24/7, most obviously visitors as well as members, from home or office as well as club. - we finally got the catering we wanted, by encouraging someone to run their business out of our club, and who has a passion for high quality home produced cooking. Our members and guests can't get enough of the food now. I am a marketing and communications professional, and yet I'm also a member who does something for nothing by putting something back into the club that has given me a lot of pleasure in the past. We're not in the membership dues business, we're in the leisure business and focus on providing the best experience - within reason - that our club can. It seems that our increasingly large and happy membership agree, as do the growing numbers of visitors, and the regular enquiries we're getting from those who want to join. Perhaps things are a little bit different over here in the UK, but not that much I suspect. Maybe my club and I are the exceptions that prove Bob's rules - but what we achieved can be done by any club, private or proprietary, small or large.

An innovative and successful way of financing long term capital projects is being practiced by several San Francisco Bay area clubs. The senior membership is being exempt from any future assessments in exchange for giving up their voting rights.

A reply to Charles de Haan. What you and your club have done is absolutely remarkable. We both have something in common, Marketing & communications professionals! The major difference is your leadership was smart enough to capitalize and use your expertise whereas the leadership at my club resisted any recommendations or advice from me and actually resented me. Just one little item to support my last statement. After much frustration, I knew I was p.....g against the wind. I offerer to buy 29 memberships that were on our resale list for $150,000 and guaranteed that I would get the club 29 new dues paying members within a year or less. What I did with the memberships was my business. This was rejected, in fact never brought to the Board. The president at the time was a friend, still is a friend (I think) and one of the nicest people I know. Very successful in his working career, but just didn't want to "hurt his friends on the Board". Those early events led me into the membership business in our area and my experiences convinced me our club wasn't the only club with the mentality not condusive to success. I received a call the first day my blog was published from a man who is part of a major corporation in our industry and he made this remark," I hope not too many people read your statment. It would hurt our business". I cleaned this up somewhat for protective reasons. So,again thanks for your input. Keep up the good work.

Regarding marketing and sales, too many clubs are wasting thier time and money focusing on “Brand” marketing. It doesn’t generate revenue. Showing prospects what your value is will generate interest and leads. Creating a real sales plan will build top line revenue. ROI should be the #1 factor in how marketing dollars are spent. Unless you are the Coca Cola or Budweiser of your market, it makes no sense at all to pretend that image based marketing will do anything to grow revenue

We believe so strongly in the need for a membership sales force and specific written scripting and training for the salespeople that we wrote the complete manual on it! http://www.MembershipSalesSuccess.com Available as a stock item or customizable for your club. Call my office for details 800-827-1663 x1 See also http://www.GolfMarketingBible.com for a complete blueprint for your club's marketing and sales success!

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