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| As we’ve discovered in the first three articles of this four-part publisher’s perspective series, the issues are many and varied, coming from many sources. The industry faces challenges from a growing marketplace, a continuing influx of new courses, both private and daily fee, changing demographics, an ailing economy that doesn’t want to get better, and battles over private club initiation fees. |
| All of this is coupled with the fact many older members are moving on, and some clubs are not offering what a younger, active clientele wants or needs in hustle and bustle of today’s society. Clubs haven’t been able, or are not willing to adapt to meet the changing needs of potential members…members who are the lifeblood of the club. |
| Clubs need to know who they are…. and what they want to offer? The club’s mission statement and values should be clearly enunciated and the club should practice what it preaches. This clearly relates to any strategy a club embraces as it seeks to remain viable, hold and gain memberships. |
| In this the final of this four-part series, those who work with and provide consulting services to the private club industry, suggest the general marketing strategy aimed at recruiting new members is to look inward for new members and referrals. |
| Additionally,
new members themselves are excellent sources for more referrals. Those
working in the industry are pretty much unanimous–one of the best
strategies centers around the present membership through “active
networking, membership referrals “ or just doing it the “plain old
fashioned way.” This is particularly so for member-owned 501 (c)7 clubs. |
| “It’s always preferable to recruit new members the “old fashioned way” . . . through existing members,” says Candice Clemenz, Ph.D., assistant professor, department of hospitality and tourism management, Virginia Tech. “This is the only option for equity clubs that wish to maintain their tax-exempt status; non-equity clubs generally have the latitude to be more aggressive outside the boundaries of their membership. |
| “Successful recruiting through your membership, however, still requires the sales-based skills of prospecting for new members, questioning to determine needs, supporting needs with benefits, overcoming objections, and closing when the prospective member offers buying signals. The strategy of enrolling new members by focusing on current members can best be defined as relationship marketing,” Clemenz commented. |
| It’s her opinion that in order “to avoid cannibalization and more effectively compete within the marketplace, private clubs need to be come more adept at utilizing the marketing tools of positioning, differentiation and target marketing.” |
| The focus for the McMahon Group is member-owned private clubs says Frank Vain, president, McMahon Group, Inc. “In this environment, I describe membership marketing as active networking. The primary source of new members for a private club is always going to be from satisfied existing members. The key to being successful is accessing this network. This means communicating with the members regularly and asking them for contacts. In most clubs the existing members are not thinking about this process regularly. If asked, they are likely to respond, “ he explained. |
| Yet at times, this seems to be precisely the difficulty, existing members, for a variety of reasons are not approached and asked for referrals. But Vain, as do others, develops and uses everyday marketing tools to assist in these efforts. |
| “Clubs have available
the typical collateral materials like brochures, web sites and the outline
of the membership plan describing dues and fees.
Active tools include the membership committee and the membership
marketing director, and, if available, a larger group that we like to call
the Ambassador Committee,” Vain outlined. |
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“This is a group
of members that is willing to reach out to prospects on the part of the
club. They might be available to play golf with a prospect, attend
orientations, participate in cocktail events and speak with community
leaders. Active
participation on the part of these two member groups, facilitated by the
membership director is more important all the time.” |
| A strategy, says Rick Coyne, president of Club Mark Corporation, Dallas, Texas, needs to be based upon a number of things including a look at SWOT…a club’s strengths, weaknesses, opportunities and threats. |
| “First, the club must determine strengths, weaknesses, opportunities, and threats to its short and long range membership stability. Once this “need” evaluation has taken place, the second effort should be at identifying who the target market needs to be,” Coyne stressed. |
| “As a private club, we generally tend to look inward for replenishment. Recent trends however, suggest that insufficient numbers of members are participating in recruitment, so the target market may need to be expanded. New members are a particularly valuable source for recruitment. |
| “Third, a marketing strategy must evaluate the various means it must employ to gain member or prospect buy-in on a timely basis,” Coyne opined. |
| “Member incentives work but must be carefully matched to the respective membership. Incentives such as food and beverage credits, guest fees and cart rentals work well for incoming members as they use the credits to introduce other new prospects to the club. |
| “Discounting should be used as a last resort,” Coyne says, and suggests “if pricing is above the level the market is either willing or capable of paying, adjust the fees to fit the market. |
| “Finally, in my
opinion, one of the most important aspects of the marketing strategy is how
you communicate. Newsletters
are great to look at the pictures, but use the myriad of opportunities that
we have at the club to repeat the program and make it important. Tell the staff. Get
them involved. Monitor results and adapt as you may need to ensure
success,” Coyne stated. |
| Steve Graves, president, Creative Golf Marketing concurs that “membership referral” best serves the membership matriculation needs of private clubs. And so far as he’s concerned, the best marketing tools are the “relationships of the membership base in combination with the desirability of the offerings of the private club.” |
| Creative Golf Marketing works almost exclusively with member-owned, 501 (c)7, not-for-profit clubs. |
| “One of the things that always sticks in my mind when talking about strategic partners in a community is what Jim Singerling, the CEO of CMAA talks about when describing private clubs and their contribution to the community. Jim vigorously espouses about the millions of dollars that each private club contributes to the local community, yet often, the club is viewed as the “fat cats” on the hill,” Coyne explained. |
| “Involvement in the community, through the Chamber of Commerce and other civic organizations is simply being a good neighbor and providing a public relations opportunity. Community outreach programs, junior development activities and other such community-oriented programs send all the right messages about who you club really is,” Coyne concluded. |
| So is there a way a club
can develop such a program and target market professionals? Surely there is,
but the plan according to Mitchell L. Stump, CPA, PA, requires a wider
approach. He looks upon it as four ways to improve your club, the details of
which are included in many of the aspects outlined previously by other
industry experts. |
| “There are four way to improve or grow you business,” says Stump, a Florida accountant and well-known author on private club topics. “Three deal with income and the fourth with expenses. A general marketing strategy must focus on 1) increasing the number of members of the type you want; 2) increasing the numbers of time your members use your profitable services and 3) increasing the average size of each sale.” Stump says this also means “ what you can measure, you can manager. Measure and compare everything that moves and always test one idea against another.” |
| Target marketing,” Coyne says, “starts with the right contact. If I were looking to involve a group of professionals as a part of my target-marketing program, I’d try to identify who within my existing membership can make an introduction. Using golf, lunch or dinner as the incentive, I’d ask the club contact to set up a meeting at the club. Peer to peer contact is sometimes essential.” |
| In the end it all leads to the test drive! Should people be allowed to use the club before joining the club? |
| “There are a limited number of tactics available to a club when it is aggressively seeking new members. A lower initiation fee is one option. This frequently works as a short-range solution, but it has limited long term benefits. The trial membership plan is another,” says Vain. |
| “This allows the prospect to “test drive” the club for awhile. These offers tend to be more effective in higher end clubs. A lower tier club that offers trial memberships is likely to attract a high percentage of “tire kickers” – people who want to milk the free trail period and then walk away when it comes time to pay the initiation fee. |
| “In a more upscale club, people will be more conscious of the social connections within the club and the are much less likely to pretend to be interested in membership,” Vain opined. But, he says, what might work for one club, might not work for another. |
| “I strongly believe that once an individual makes application for membership they should be granted "temporary privileges" at the club,” Graves stated. |
| “They should be officially informed that these temporary privileges do not constitute an acceptance by the club of their application, but rather is simply a courtesy being extended during the application and approval/disapproval process. Currently General Motors is offering a "take the car home with you and drive it for 100 miles" program to convince consumers that they will want the product once they try it out. It only makes sense for a prospective consumer to make a buying decision on a membership that they should have the ability to use the club, albeit briefly, before making the final buying decision,” Graves concluded. |
| In Coyne’s mind, joining a club is a lifestyle decision, and prospective members must be offered an opportunity to experience what the club has to offer. |
| “The competitive environment almost mandates this opportunity. Each respective club must analyze whether it’s best to allow unaccompanied play or whether the guest must play with a member or ambassador. |
| This policy should extend over into the entire referral process allowing members to bring a “qualified” guest to lunch, dinner or a round of golf. Make it easy. If they are preregistered as prospective members, let them play or eat complimentary. Who knows, it may spawn some additional referrals,” Coyne related. |
| All of which leads to a final step for new members…orientation and the importance clubs attach to it. |
| “It’s extremely important to understand the rules, regulations and to learn more about the club,” Stump says, and it also allows “new members to meet other new members and leaders of the club.” |
| So there’s a general feeling orientation is an important and critical process, although some clubs “typically fall short of providing the proper orientation of simply what the club expect of them, and what they can expect from the club,” Graves suggested. |
| Coyne feels member orientations are “vitally important for several reasons. It provides the club the opportunity to make “connections” between staff and the new members. It allows members to understand how everything works and to meet the people that make it work, and it provides the club an opportunity to reinforce the idea that membership has its privileges and its responsibilities, the latter of which is the need to refer new members.” |
| Vain stressed that “orientations are very important because every new member is like a new employee. |
| “They are anxious to get going, but don’t know how to go about it, and if you don’t establish clear rules and guidelines quickly, they will either make up their own or they will become frustrated and stop trying,” Vain explained. |
| “The quicker you can make them comfortable with the club, the sooner they will become an active, using member. One of the first things they will probably do is call up a good friend, family member or business associate and invite them to the club. That person is probably a prospective member. So now you are able to start tapping into their network.” |
| Publisher's final thoughts |
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| However, our research indicates clubs are facing four major issues: 1) Clubs today may not have the amenities today’s members are seeking. 2) Initiation fees and dues maybe out of line with what the market can bear. 3) The traditional way to recruit doesn’t bring in new members and 4) older members (the ones you could always count on) are quitting. The average life span of a member is decreasing. |
| This leads to the major requirement to actively recruit new members, a task that falls to either the membership committee and membership director, or in many cases, both. |
| The
membership director’s role comes from history…tradition dating back to
the early days of the private club industry 200 years ago in England. The
“membership secretary” was held in the highest esteem. This person
screened applicants, and if a member wished to recommend a friend or
colleague for membership, the membership secretary completed all the paper
work and acted as a liaison between both parties. |
| It’s my considered opinion membership directors must be more creative in membership recruiting. Your current membership will not provide your club with enough referrals. Of course, there’s always an exception, and maybe a minority of clubs who may never have membership issues. But the majority does have membership issues. |
| The membership director’s primary role today is to build or preserve membership. This person must have an understanding of the marketplace, the concept of the private club, professional marketing skills, be able to execute approved marketing programs, and feel comfortable attending meetings of local groups. The mistake clubs make when they hire a membership director is in not understanding the type of experience required of a membership director. |
| Ten years ago, only a
handful of clubs operated with membership directors. Today this has
increased to between 35 to 45 per cent of clubs who have someone in charge
of membership recruitment. This
number will rise in the future. |
| But even while clubs focus time and energy on maintaining membership growth, there’s another issue–initiation fees, whether they be “fixed” or “floating”, or whether or not they increase or decrease over time. |
| In my considered opinion, clubs should only raise the price of initiation fees if all of the following happens. |
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• All specific membership categories have reached their full
complement.
• The club has a steady sales momentum and there are a continues
flow of
• Clubs of a similar type in your area have a short list of
membership for |
|
The
worst time to increase initiation fees is when there is no sales momentum.
The initiation fee at that point may well be at its height.
It is also important to recognize that if a club uses an initiation
fee increase as a closer, the club could drain the marketplace of any
existing prospects, as well as price |
| A club’s reputation is on the line. Clubs should not make short term decisions regarding initiation fees. Rather, the club needs to have a long-term marketing plan prepared before hiking up initiation fees otherwise the club might pay a penalty later for being greedy. |
|
So far
as decreasing your initiation fee are concerned, I favor a floating |
| This is even more difficult for equity (501 c7) clubs, which are limited in how they can market memberships. These are approved recommendations. |
|
1.
Hire a membership director whose only job is to create marketing |
| 2. Develop a marketing strategy that motivates more club referrals and increases the club exposure in the community. |
| 3. Research your area. Make sure your comparison study is that of clubs similar to yours. This means not only the golf course and clubhouse facilities but also more importantly a similar member demographics and income. |
| 4. Make sure you do exit surveys. Why are members leaving? If your club is not meeting the members’ needs, fix it. Word of mouth will make or break your club. |
|
5.
Attend the Association of Private
Clubs’ marketing seminar in |
| At least that’s the way I see it. |
| John Fornaro Publisher |
| We welcome feedback and comments on any of our editorial features. If you have an idea for a topic you'd like to see addressed in a future "Publishers Perspective," please contact our editorial department at (714) 596-6611 or via e-mail at jody@boardroommagazine.com |