We often know who’s executing the membership process, but who’s responsible for membership growth at your private club? A question often asked but less frequently answered.
Historically, members have always been in charge of referring people for memberships, especially in the non-profit equity clubs. However, it seems in recent years, members and membership chairs have relinquished that responsibility.
It’s a chink in the foundation of many private clubs, because there’s little or no accountability for finding new members for clubs. The effect, especially in light of the Covid-19 pandemic, can be crippling.
What should private clubs do about it? That’s one of the questions put to Rick Coyne, president of ClubInsights and Steve Graves, president of Creative Golf Marketing, two very accomplished marketers in the private club industry.
Coyne and Graves, competitors for many years who love the private club industry, have spent a lot of time in the same storm, but in different boats.
“Rick and I have spent our entire careers assisting private clubs in accomplishing their short and long-term membership goals. We may have taken different paths…but always with the same outcome in sight… working in our clients’ best interests and accomplishing the goals they requested from our two marketing entities,” intoned Graves.
What’s changed and what does this mean for the future? Here is the answer from these private club marketeers.
1) WHO IS ACCOUNTABLE FOR MEMBERSHIP GROWTH?
SG: They say, “A fish stinks from the head down!”
The concept of membership growth is a mindset and a culture that must permeate through the management team and membership base from the club’s leadership. If the leaders (owners and/or board of directors) do not have membership growth as a priority, then membership growth will not happen.
Membership growth tends to be a reactive thought at the club leadership level whenever the club finds itself in a financial crunch. Membership growth is consistently a knee jerk reaction, rather than a primary focus with dedicated efforts and messaging to the management team and membership base.
When the concept of membership growth is a consistent and stated priority at the club leadership level then you see a private club with a strong and vibrant membership position. The membership and management team of a private club will always take their lead from the club leadership. Ambivalence at the club leadership level results in a less than focused membership base on even the concept of why their club needs a strong membership position.
RC: Accountability for growth has been a shifting and perhaps even a misunderstood process throughout the history of private clubs.
Members are responsible for deciding who shares the first tee or a table in the dining room. However, the board, committees, general manager, membership director and department heads are responsible for creating the kind of lifestyle relevant environment that is fun and attractive and justifies the cost of membership.
Without relevance to the demographic of your membership and marketplace, members won’t refer new members and price won’t matter. Member candidates have choices. If you’re not a good one for them, they’ll simply go elsewhere.
2) WHAT HAS HAPPENED TO CHANGE THE ORIGINAL WAY (MEMBERS REFERRING MEMBERS) CLUBS RECRUITED NEW MEMBERS?
SG: This answer is really quite simple. It no longer became easy. Private club members enjoyed the old process of membership referral. They, as members of the club, were solicited by affluent members of the local community asking a member of the club they desired to join to “nominate them” for membership. It’s not very difficult to go fishing when the fish are literally jumping in the boat.
The laws of supply and demand are very powerful. The private club industry enjoyed a very prolonged era of being almost a monopoly for the discretionary time and spending of affluent consumers.
Unfortunately, as more competition has been created, attempting to lure consumers to their products, the private club industry chose not to act. Members of private clubs began to act like “customers” rather than “owners” of their clubs.
Customers simply use the product for which they are paying their monthly fees (dues) rather than thinking like an owner, for which they are motivated to invest in their club through use, support and the invitation of new member prospects.
Inviting friends to join a private club should be a committed and devoted mindset rather than the common reaction by club leadership of, “We need to run a campaign.” Membership referral, when done correctly, is a never-ending campaign of success.
RC: In the earliest days, the membership secretary, one of the most powerful members of the club and perhaps the community, functioned as the gatekeeper of membership invitations.
With few clubs available and largely dominated by the rich and powerful, access remained a sought-after commodity. This still exists in some locations. For most clubs however, things have changed. The responsibility has shifted many times from board, to membership committee and ultimately, to the membership director, none of whom can be successful without building a strong member experience, brand and sense of community.
Change has been necessitated by the oversupply of private clubs, shifting consumer attitudes and the need to listen carefully to the needs of members and those that you wish to attract as members.
While membership was once a sought-after privilege, supply/demand has altered that dynamic. Today’s club must align itself with the needs and desires of its members and potential members. It’s an ever-changing dynamic.
3. WHAT DO YOU VIEW AS THE RESPONSIBILITIES OF THE BOARD, THE MEMBERSHIP CHAIR AND THE COMMITTEE IN RECRUITING NEW MEMBERS? WHAT ARE THEIR ROLES?
SG: Fascinating question and one with an answer that you may not expect. These club leaders need to create a culture of positive storytelling about what new member growth will allow the club to do on behalf of the membership and the club’s long-term financial success.
This critical group of influential members will set the tone and temperature at the club and keep the membership knowledgeable and focused on the never-ending efforts of introducing their friends to the extraordinary lifestyle of club membership.
These leaders should not sell the “what” of “we need more members” but rather the “why” of what new member growth will provide to the members in continued financial prosperity for their club. This group of influential individuals/members plays the pivotal role of constantly and consistently personally (not in a blurb in the newsletter) informing the membership of how a strong membership will allow the club to provide them every experience and expectation of private club life they desire.
RC: Stop knee jerk reacting! Build strategy that drives vision beyond your three- year term! Expunge bias. Know your market, your members’ needs and create a positive member experience. Price reduction is not a strategy. It’s a potentially devastating and misguided practice to be avoided. A healthy membership is the private club’s most important product. Growth and retention don’t happen in a vacuum. How you are perceived by members and your non-member community is your brand image. Your brand attractiveness is dependent on the board’s support and the provision of resources and tools to create the most member relevant environment and lifestyle possible.
This is not limited to facilities. It includes events, activities and a staff that understands the importance of making every touch positive.
Membership committees need to activate into three groups – finding members, helping to wine and dine member candidates and the group that helps acclimate and assimilate the new members that join.
4. WHAT KIND OF BACKGROUND OR RESUME SHOULD THE MEMBERSHIP COMMITTEE CHAIR POSSESS?
SG: What is not necessary is someone with a “marketing background.” We commonly run into membership committee chairs who feel as though their background in marketing their company or product is going to be relevant to the private club industry.
The best membership committee chairpersons should be individuals of influence at their club level not their business level. Membership committees need to be a conduit of education, motivation and inspiration to the membership of the club to actively participate in the invitation process at their club.
Leading by example and by action is an important characteristic and attribute of a membership committee chairperson. One very successful private club in New York had a membership chair who felt he was the club’s “Rush Chairman.”
This highly successful businessman (Wall Street executive) had zero background in marketing but extraordinary personal skills in communication and motivation of the members. His skills in communication, motivation, education and support for the efforts of the membership base were off the charts successful.
The members of this elite club were led by this Pied Piper to a full membership with a waiting list. He didn’t know how to sell or market the club, but he knew how to excite and motivate his membership to take action.
RC: For most clubs the days of creating ways to turn down members are over. Today’s membership committee must be a working committee. An understanding of marketing and sales is a bonus, but remember that membership in a private club is a unique and lifestyle driven commodity.
Forcing sales through gimmickry or price, without a substantive and relevant lifestyle experience, is simply a revolving door.
Experienced marketers tend to be better capable of understanding core issues that may be creating or contributing to a club’s challenges. Except for location, there is not a club issue anywhere that cannot be solved through core issue analysis. People who can be objectively analytical can be an asset.
5. WHO IS RESPONSIBLE FOR MEMBER RETENTION? IS IT THE GM (WHO QUITE OFTEN IS REPLACED EVERY FOUR YEARS), THE MEMBERSHIP COMMITTEE CHAIR, THE MEMBERSHIP COMMITTEE OR THE BOARD PRESIDENT, OR?
SG: Membership retention is a critical component of a successful private club. It is much easier to get money from someone that is already giving you money.
Membership retention is rather easily defined. It’s like a slow leak in a tire. If you notice that the tire on your car may be losing air it’s much too easy to simply add some air to the tire rather than permanently fixing the leak. Members who leave private clubs tend to slowly trend away from their club.
A club leadership that invests in software to identify these negatively trending members will be able to then put together an orchestrated series of communications and invitations that draws those negatively trending members back to club life. The club’s membership director is commonly the perfect person to orchestrate these strategies of influence.
Additionally, when a club is seeing uncontrollable membership attrition – (death, health, finances or moving), then the controllable reasons given by these negatively trending members need to be acted upon by the club’s leadership and management team. Strong membership retention efforts commonly provide valuable information for club leaders to use in operational changes and offerings.
RC: Like growth, responsibility for retention rests with the club’s ability to make members happy and proud of their club. No one person that can do that alone. It takes the entire team. The days of departmental fiefdoms should be over replaced by an all hands-on deck process of listening to members, building your sense of community and building pride and loyalty.
Membership is job one. Every board member, every committee member, every department head and the general manager should have a palpable stake in both growth and retention. If you believe that each touch a member has with the club is important, then every staff member, starting with department heads must drive personalization and services matching the lifestyle needs of your members. Growth and retention, stimulated by satisfied and happy members enjoying the lifestyle created by your staff, is a self-perpetuating and sustainable recipe for success.
6. HOW IS A CLUB’S INITIATION FEE DECIDED?
SG: Initiation fees are more of an art-form rather than a science. They’re also a mindset. If your club leadership doesn’t believe in the quality of your club and the investment necessary to maintain the quality and standards of your private club then you can be totally assured of a low initiation fee at that club.
If your club falls into the mindset trap of, “We are simply in the dues business”, then you can be assured of a low initiation fee. Private club leaders that understand how initiation fees are the driving force of funding depreciation and capital investments NEVER consider slashing initiation fees for the short-term gain of some dues revenue.
For example, “Join our club and if you commit to two years of membership we will waive your initiation fee.” Clubs that employ this flawed type of marketing strategy have not bought into understanding how initiation fees must be commanded to fund the club’s capital investments.
A demographic study of the immediate area around your club will give you an “economic snapshot” of the levels of joining fees that you may be able to command. The laws of supply and demand are very powerful too.
The closer you are to a full membership base the more bullish and aggressive you can be when considering the joining fees you suggest for your club. Private clubs should inform all new members that the joining fees they are paying are an investment in the club’s future capital investments.
Just this type of messaging will keep a club leadership focused on maximizing the initiation fee, with the membership expecting their friends to pay a joining fee and the new member understanding that their joining is helping to further their new club’s success. A financial windfall for the club based on a mindset of success at the club leadership level.
RC: In the early years of clubs, initiation fees were a barrier to keep out those not wanted as members. Since then, the process has been largely arbitrary, increasing wildly during the late 1980s and 90s as golf and club demand skyrocketed and then reversed as supply/demand ratios and golf decline occurred in the early 2000s.
Initiation fees are important for capitalization, but dues are the steam that drives the engine. Clubs that have chosen to reduce or do away with initiation fees are faced with continually deteriorating facilities or assessments, the latter often making matters worse.
The determination of initiation fees should be developed on the basis of 1) your depth of market demographic and their capability to afford, and 2) the value of your club’s lifestyle experience to the members you are trying to attract. If you have created loyal members who passively market your club, your value and brand will be more sought after.
7. WHAT IS A THIRD-PARTY CONSULTANT’S ROLE?
SG: Marketing private clubs is a sophisticated and complex process. Just having a club admit to that reality can be a significant hurdle. Too many private club leaders have taken the approach of “we can do this ourselves” when it comes to the important process of marketing their club.
Private club leaders often feel as though asking for assistance, in marketing their club, is a show of weakness and/or desperation. Marketing a private club is not brain surgery but it is much more intricate and complicated than a part time membership committee can accomplish at its rushed monthly meeting. It is becoming less uncommon for a third-party consultant to be considered for membership growth assistance. A marketing consultant/agency provides many skills and services that are not commonly provided by your current management team.
Third party consultants provide information and best practice advice not known by your management team or club leadership. Club consultants are “specialists” that know the private club industry inside and out and know exactly what ‘s required to take a club from the concept of marketing their club to the reality of marketing their club.
Third party consultants help take the emotions out of important decisions that club leaders are reluctant to make, without the advice and direction of experts. When you talk about marketing you are discussing income you hope to have. When a third-party consultant executes on your behalf you make deposits with the income you budgeted to have.
RC: Ultimately, consultant firms specializing in membership solutions like Steve’s and ours are subject to the willingness of a board to accept or reject the solutions we may offer. That said, there’s a responsibility for all of us to offer solutions that address the core issues affecting the club’s long-term membership success.
Maalox was long a powerfully effective mask for the stomach pain of ulcers, but it never cured anyone.
Boards need to be more strategic and informed in their thinking and listen to their general managers and highly skilled staff, most of whom know full well that the solution for nearly every membership issue is in the relevance of what you offer, the lifestyle that you create and the member loyalty that results.