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| Membership issues in the private club industry, at times, seem never ending…overwhelming. What to do? As we discover, there are solutions. |
| Private clubs, as suggested in our first article, face myriad membership issues, emanating from many sources. Challenges come from a growing marketplace, too many new golf courses, both private and daily fee, changing demographics, and a limping economy that's bounced around for several years now. |
| Facts don't lie: many older members are moving on, while some clubs have not adapted to the needs and wants of a younger, active clientele. Those not willing to meet the changing requirements of potential members, pay the price. They're not replacing those who leave with new members. We can't ever forget, clubs are in the dues business and members are the club's lifeblood. |
| Some clubs, to counter the impediments, are relying more heavily on their membership directors and membership committees, but sometime the major issue focuses on the dollar factor: initiation fees, dues, marketing strategies and different kinds of memberships. |
| Clubs need to know who they are…and what they want and can offer. A club's mission statement and values must clearly enunciate what the club is…and the club should practice what it preaches. Undoubtedly, this clearly relates to any strategy a club embraces in seeking to remain viable, and hold and gain memberships. |
| So how does a club fix the problem? |
| "The most common fix is probably to simply fire the membership director, which isn't necessarily the correct fix," contends Brian Gaines of ClubGains, Addison, Texas. Truth is, that's something that probably happens with more frequency that we want to believe. |
| Gaines, like other consultants in the private club industry, knows you've got to determine what the problems are before determining a "fix." That requires a comprehensive analysis of the membership director, the club, the competition, the mentality of the local market, the local economic environment and how all these factors are interrelated. |
| "What works is first determined by what's wrong," Gaines reiterated. |
| Rick Coyne, president of Club Mark Corporation and executive director, Professional Club Marketing Association suggests "there's a core set of issues. It may be aggressive competitors, pricing that is too high for the marketplace, inadequate marketing processes or staff, run down facilities or a simple failure to react. However, in dealing with the symptoms, just as in all businesses, there should be a comprehensive plan, not a knee-jerk reaction. |
| "Short term fixes usually result in long term problems," Coyne stresses. "Study the issues, don't just react." |
| Here's a couple of suggestions from Heidi Voss, president of Bauer Voss Consulting, Galena, OH. "Some clubs have had great success with recallable memberships that are sold to those outside the real estate community while it is in its build out. Clubs need to be careful that they do not price these memberships too high. Realize that a full dues line should be the goal." |
| "Other older clubs have offered certificates to their members for their friends that gives them money off the initiation fee based upon the number of years the current member has been a member of the club." Voss contends this is a way to get the members involved in the recruitment process. "Reward them for their years of dedication and lower the initiation fee for a very limited time to encourage growth. |
| "Clubs that have been successful with this program have also created a referral credit for the member when they sponsor a new member to the club, but this referral credit should never be applicable to dues," Voss suggests. |
Frank Vain, president, McMahon Group, Incorporated of St. Louis, Missouri, says the key is an experience and facilities that "promote usage and membership value." His company's research shows a club must excel in five areas.
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| Beyond those things, the club must wake up from the reactive marketing strategy of the past and get the members engaged in the new member recruitment process. |
| So how do clubs get past a reactive marketing strategy? Hiring a membership marketing director is an excellent starting point. Best guesses suggest between 35-45 percent of private clubs have a person dedicated solely to membership marketing. |
| Steve Graves, president, Creative Golf Marketing, Manhattan, Kansas contends it's "taken on a much more prominent role than in the past. That being said, it depends upon their training and how well they're allowed to actually do their job (by the board and membership committee), as to how effective they truly can be." |
| And if you don't think the role requirements have truly changed, listen to Voss, perhaps not so much tongue-in-cheek: |
| "This used to be viewed as more of an order taking job requiring only the skills of being beautiful and engaging. Now we have placed the net operating income of the club on this person's shoulders. They are expected to bring more to the bottom line than all other departments. This person needs to be outgoing, intelligent, computer literate, a fantastic networker, able to moderately play all sports that they are promoting (golf, alpine, fly fishing), able to work difficult hours, positive mental attitude, thrive on social interaction and one who can bond well with all people." |
| To find this person Bauer Voss Consulting uses a personality profile test scoring them against others in the field who have enjoyed past success. |
| "The Number One attribute is a being a motivator," Voss opined. "Their role is to motivate the staff to provide wonderful service to retain members, motivate the members to use the club more, and most importantly to motivate prospects to join. If someone is not enthusiastic and motivational they will not succeed at this position." |
| Gaines defines it a little differently, but then again, maybe not so different. "The most successful membership directors are those who understand that membership sales is relationship driven and that their best prospects are those who are referred by existing members. |
| That means the membership director is on-site and actively communicating with members when the members are using the club. |
| That means that members are comfortable with providing prospect names and confident that the membership director will handle those prospects in a professional and timely manner AND that the club will take good care of those prospects once they become members. There's a lot of trust going on in that equation and it doesn't happen overnight." |
| It's absolutely necessary for a professional to continually stimulate the membership network if a club's going to attract new members, Vain explained, while also suggesting the broad economic differences in the world of private clubs "factors heavily into staffing plans." |
| He feels most clubs over 1,000 members require a full time membership director, and that those between 500 and 1,000 members are increasingly likely to have one, but it is not universal. |
| "Clubs below 500 members have to make some important financial decisions and this frequently does not include someone in the membership department. Innovative staffing plans can help these smaller clubs," Vain outlined. "Broadening the role of the membership director to include membership services and sometimes private event sales and marketing can help spread the cost of the position across several departments and allow for revenue generation in multiple areas." |
| However, one point is very clear: Membership directors must understand the concept of a fine, private club, its benefits to the community and the individuals and families invited to membership. |
| "Membership marketing is lifestyle marketing, so a hard sell is not going to work," Vain intoned. The director must be very good with people and work to establish a rapport with as many members as possible to gain their confidence and referrals. |
| So what's the role of consultants in all this? All agree they can bring objectivity, industry data and proven methods to help clubs reach a concensus to move forward. They can usually spot core issues and offer recommendations to help boards of directors make informed decisions. They can produce a road map…while creating the perfect process and methodology for short and long term success. |
| All this, Vain suggests, "can give the committee a real sense of where the club really stands and what it needs to do. The committee-driven process often results in quick-fix approaches, like price-based drives, that do not solve real issues." |
| And ultimately, suggests Gaines, "the role of the consultant is to work themselves out of a job…so the club doesn't need a consultant any more." |
| Not so for the club's membership committee and club members! |
| Very clearly the role of the membership committee is to provide support to the membership marketing director, support and involve the entire membership in the effort for new members and be active ambassadors for the club in the community. |
| "In today's society it's difficult to have only volunteers taking charge of returning phone calls, taking prospective members on tours, creating situations where sponsors and endorsers are introduced and then getting the check, the application and processing it for approval," Coyne stressed. "It's way too much for a volunteer. Instead, with a membership person on staff, the committee can offer assistance in meeting and socializing with prospective members. A membership committee can also be involved in creating prospecting opportunities and even in the development of marketing programs. However, like all committees, the membership committee should not be involved with the day-to-day operations." |
| And the member involvement is equally vital because they remain the number one source for new member referrals. "They need to understand their responsibilities…and the importance of taking a proactive role," Graves suggested. |
| Members are "often busy people not thinking about the membership level at their club on a daily basis. Great clubs have a way of engaging them in the new member process," Vain explained. |
| "Just as membership has its privileges, it also has its responsibilities," Coyne opined. "I often remark at annual meetings that if just 50 percent of members referred just one new member to their club each year they would have a waiting list. Unfortunately, when you say that to a group of members, they all think you're talking to the person sitting next to them. |
| "Members are critical to the replenishment of lost members. Who better to pick who should use the club than an existing member? But, as membership issues have plagued so many clubs, members have been literally bombarded with requests to find new members and, in many cases, have reached a saturation point. Instead of beating them up about referring, give them opportunities through planned member events than are perfect to introduce prospective members. Let the prospect see your club in action with families having fun. Involve the kids and you grab the family." |
| For Brian Gaines, there's an additional question: What's the role of management? |
| "Management's role in this instance is to make sure the membership director has the tools they need to do the job (training, hardware/software, mentoring and sales management); to make sure the club understands what members want and that the club is providing those things in order to keep existing members and attract new ones; and to effectively communicate with the board, the membership and club staff to help keep them informed and involved in the process."
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| Publisher's final thoughts |
| 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 enough 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 who may never have membership issues. But the majority or clubs do 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 and this number will rise in the future. |
A club's reputation is on the line. Members are the lifeblood. Clubs need to have long-term marketing strategies, to maintain membership growth, something that is even more difficult for equity (501 c7) clubs, which are limited in how they can market memberships. Here are some suggestions:
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| At least that's the way I see it. |
| What's your opinion? If you have any questions or comments, John Fornaro can be reached by email at johnf@apcd.com. |
| John G. Fornaro Publisher |