Archive for Hospitality Business

The #1 Member Recruiter at your Club is your Website.

Most history books of a century-old club provide a storyline of transitions. The founders’ years are exciting and challenging. The next generation moves on from the initial struggles and finds growth. By the third generation, the framework is ingrained into a culture that protects the long standing traditions. However, the common thread through all the cycles is the changes brought on by necessity.

Through word of mouth, proud members would share stories about their experiences at the club, encouraging family, friends or associates to join. The level of pride within a club has not changed, but the level of interest surrounding a club’s targeted circumference has greatly diminished. Societal norms and attitudes have shifted and a club’s offerings have more competition than ever. Members alone can no longer be held responsible for balancing matriculation and attrition.

1It is no secret that the majority of new member referrals come from members who have joined within the past five years. Over the years, most of the long term members have done their part as advocates by bringing in numerous new members. Times have changed, private club memberships aren’t as homogenized as in the past. Contrasts exist between adult and family-oriented programming, generational differences with needs and wants, etc.

Club leaders are faced with finding multiple revenue streams to feed into the dues line that once funded operations and capital. Along with prestige, exclusivity has been a selling point to attract potential members. However, the downside of being exclusive is that those outside the inner circle are not aware of the club’s features and benefits. It’s possible that a potential member, who for the past decade lived 20-30 minutes from the club, never knew the club was there. To raise awareness in the surrounding community, clubs unfortunately, are hesitant to use traditional marketing methods that may send mixed messages of the club’s financial position.

“The revenue challenges clubs are facing is not exclusively a result of economic downturn and societal shifts. The root of the problem stems from a lack of community awareness. The fact remains that the most successful way to drive revenues is by accurately reflecting the club features and benefits. When done properly, within a 20 mile / minute radius of the club, local interest is raised increasing inquiries that drive revenues.”

-Peter Jude Ricciardi

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When you think of web communications, think of it as the digital version of the existing analog member referral. Remember the times before digital social media, where we would share our interests and club experiences with family, friends and associates? If you add a dash of discretion and a pinch of discernment to the digital approach, it’ll sound familiar to the existing analog version of member referrals. Through media content and communication, interest attracts potential members to the club website. Beyond the membership advocates, the highest producer of new member inquiries for most clubs is the club website. From this point, the intention is to nurture relationships through Customer Relationship Management software (CRM), which clubs use to manage and analyze customer interactions and data throughout the customer lifecycle with the goal of improving relationships. This form of marketing is much more engaging to potential customers. Its purpose is not to change how your club looks to the community, but how the community looks at your club.

2After the recent recession, some private clubs could not keep pace with the changes brought on by the new economy. Similarly, companies and organizations also became victims of Digital Darwinism, resisting change from analog to digital practices. Brick and mortar organizations going up against businesses, such as Amazon and Netflix, quickly lost market share. Most clubs today are competing for attention and relevance. For many, it’s time to ask what we can do differently to be more relevant to attract the people we want to connect with. When you shift the paradigm, problems become opportunities.

How well do you know the Circle of Influence (potential member geographic market), where you draw members from? How well is the club’s unique value proposition defined and emotional benefits communicated to the targeted potential member? Are you capturing their imagination and holding their attention to the point of having them share experiences with others in their own words? The place and time where a member visits tells a lot about the individual and group activity at the club. How would a member at your club fill in the following blanks?

When I get to the club, I’m usually at/in the _______ around___:___ to ______. I enjoy it because________!

Exploring questions like these leads to the fact that a small percentage of members can become the greatest source of revenue…think 80/20 principle. It makes sense to pay a lot of attention to these advocates. It’s worth knowing how the club is doing with them, to the point of constant monitoring of compliments and complaints. Compliments are an endorsement that could drive a referral and complaints are an invitation to win them back, quickly!

3To best determine the needs and wants of potential member’s, data and facts are pertinent to the decision making process. When you track member behavior you quickly learn how to best position programming that drives membership usage.

A short decade ago marketing was an unspoken word in many private clubs. Today, most successful clubs have formed Marketing Committees and rely on the expertise of a proven Membership Marketing Director. Club leadership has quickly learned the value of raising awareness to produce the highly needed results in an extremely competitive marketplace.

 

 

 

 

 

 

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Are Private Golf Clubs Re-Branding Prestige?

At the turn of the century, approximately 85% of all U.S. golf clubs were private, and mainly exclusive for wealthy families to join and enjoy the sport. One of those families were the Roosevelts, who’s son Franklin became Secretary/Treasurer of the Campobello Golf Club by age 17, and played for Harvard, but unfortunately became stricken with polio. Although debilitated by the disease, his passion for the game continued. As President, following World War 1 and the Great Depression, FDR’s New Deal WPA Program put America back to work building hundreds of municipal golf courses throughout the country. By mid-century, golf dominated by the masses, left only 35% of golf clubs private. In the late 1980’s the National Golf Foundation released a report suggesting that in order to meet the demand of the sport, a golf course would have to be built every day over the next several years. By 2000, competition for leisure spending increased along with the commodification of time. Following the 2009 recession, the NGF released another report requiring a golf course close every 48 hours in the US for the supply and demand to correct itself. According to the National Golf Foundation following 2012, the number of golfers who play public courses has risen above 90%.

The draw for most private golf clubs remain; speed of play, sense of community, and quality experiences. However, a recent Wall Street Journal article, titled Americans Want to Play Golf – Until They Try It, refers to a recent National Golf Foundation participation report that states how the number of people trying golf has gone up, but the overall participation continues to decline. Upon viewing the video version of the article (click image below), it is apparent that the clash with rules, etiquette and learning curve are the major deterrent factors. Along with the social shifts of family-centricity, golf is finding itself losing its relativity to the masses.

Combining the word “mass” with “prestige,” Michael Silverstein of the Boston Consulting Group created the word masstige. Masstige represents prestigious products and services that are not essential, but highly associated with exclusivity and affluence. They are purchased to increase status and social currency and consist of high quality. Masstige thinking for private clubs is not about adopting the semi-private model. It’s more of a shift in efforts and results. The strategy to attract new members today is very different. Before considering another enhancement to the course, club leaders are considering alternatives to broaden their appeal with additions such as pickle ball or bocce ball. When considering the course, some clubs are following the lead from the most recently developed private golf club, BlackJack National. Tiger Woods designed this course to be more enjoyable with only one cut of grass around the greens, minimal trees and numerous golf alternatives.

Along with changes in programming, successful clubs are changing perceptions within the radius of the potential members surrounding them. They strategically measure the brand sentiment in the community. Brand sentiment is what non-members perceive about your club in the context of positive and negative associations. The research focuses on measuring external markers such as conversations and social media comments. Internally, it asks probing questions about brand perception that usually go unexpressed. Through the process, in which advocates are identified, new models are explored to create highly valued experiences. A member is more likely to share the experience about a Glowball tournament with martini stations than about yet another pair of Ray-Bans.

Embracing brand relevance, as it pertains to new members, perpetuates interest from potential members. The rise of new media, such as social networking sites and mobile applications, has led to a revolution with golf clubs. Potential members do not want to take the time to find out about you. As the acronym, TLTR (too long to read), becomes the new communication standard, clubs are already building visual content with a video and photography library. This allows club administration to keep the website current and relevant with the changing pace of technology. Experts recommend removing anything on your website that represents what you were two years ago and replace it with what you are going to be in two years.

By emphasizing the fun of camaraderie in golf, clubs may be able to win back the masses that once exceeded the supply by demanding a shared enjoyable experience when on the course.

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Transforming Tradition in the Private Club Industry.

The private golf club industry enjoyed the success of the 1990’s. From 1990-1999, the number of golfers increased from 27.4 million to 28.8 million, the number of golf rounds rose from 451.4 million to 518.4 million, and the net increase of courses rose by 20.6%. However, as golf clubs experienced a 20.6% growth from 1990-1999, the number of golfers and golf rounds played only rose by 4.9% and 12.9%. (NGF Rounds Played in the U.S.). From 2000-2012, the number of golfers dropped from 28.8 million to 25.7 million, the number of golf rounds decreased by 10.7% from 518.8 million to 463 million, and the net increase in course openings shrunk to 3.5% (NGF Golf Facilities in the U.S.).

Over a 20-year period from 1986- 2005, more than 4,500 courses were added. In 2000 alone optimistic developers opened 362 golf courses. (NGF Industry Update – U.S. Golf Supply ). However, over supply with a shrinking demand closed approximately 1000 courses by 2003. NGF State of the Golf Industry). At that time Joe Beditz, NGF – President and CEO accurately stated “The problem of oversupply will fix itself once the industry loses some 1,500 – 2000 golf courses.”played was not sufficient enough to support the abundance of supply. The slow correction that was occurring was necessary to help return the private club industry to a more healthy equilibrium between supply and demand. (NGF Industry Update – U.S. Golf Supply ). When the Great Recession of 2008/2009 hit many decision makers of private golf clubs were forced to react.

“It is not the strongest, nor the most intelligent that survives.  It is the one that is most adaptable to change.”  -Charles Darwin

Private golf clubs that have survived the shakeout and avoided over-reacting by eliminating programming and services have evolved with a raised marketing awareness. As with most luxury markets, most private club memberships were purchased based upon exclusivity and prestige. However, things are changing..

Progressive thinkers amongst board and management are now exploring marketing theories that 10 years ago were unfathomable.

Blue Ocean Theory Innovates New Membership Subsets.

linkedin 2During the growth years of the private club industry there was optimistic development in affluent communities of private country, yacht or city clubs. Today, many of these institutions are competing in dwindling markets. Therefore, it has become increasingly competitive to sustain growth. In these potential member pools, the waters become bloody red oceans fighting over shrinking demographics. However, as with most industries, some shrivel up and fade away while others in the same market blossom from creating blue oceans of new market spaces to enhance dues.

Tiger Woods recently opened his first private country club course in the U.S named Bluejack National Private Club and Community. According to the co-Founder, Mike Abbott quoted in Club and Resort Business Magazine; “ We think that golf has lost its way because of how challenging it’s become, the time commitment involved and the loss of social interaction, as people go looking for their ball. As a result, not only is the game not as fun as it used to be, it is also a big reason why clubs have stopped being as interactive as they once were.” Along with creating new experiences on the golf course, facilities will include areas such as “The Place” and “The Fort”.   The amenities and programming of such facilities will include: resort style swimming pool, sports field marked for flag football, wiffle ball field (Little Fenway, modeled after Boston’s Fenway Park), skate park, study hall pavilion, ropes course, zip lines, walking trails and an active fishing program. In addition, it will offer 386 private residences, in which the first couple to purchase a home are not golfers. Food and beverage operations will provide fruit stands, burger and shake joint, and a coffee house. Some of these amenities didn’t exist in the club industry 10 years ago.

“Many leading organizations plummet from the pinnacle of success to the depths of failure when market conditions change. Because they’re paralyzed? To the contrary, because they engage in too much activity of the wrong kind. Previous success breeds active inertia and active inertia breed’s failure.”  -Donald Sull,  Why Good Companies Go Bad.

Jobs to be Done Theory Disrupts Existing Potential Member Markets

linkedin5In the recent issue of Club Business Magazine, Damon DeVito of Affinity Management expounds upon having a different point of view by asking; “Does your club allow jeans in the dining room? If not, is your club nicer than Congressional Country Club? They allow jeans in every room except one – and nobody goes into that one”.

According to a March 2015 article in USA Today, the Broadmoor Country Club in Indianapolis lost a half-million dollars in 2013, then did away with its ban on jeans in the clubhouse and has added child care. It added over 80 new members in 2015/16. That boosted membership to about 280 from a low of 167 a few years ago. The club says it has stabilized its finances after cutting $125,000 in expenses last year and boosting revenue by $143,000. One simple adjustment at Broadmoor made a big difference in the culture: dropping the ban on jeans in the clubhouse.

Another club in Indianapolis, the Woodstock Club, lost $171,916 in 2011. As a result they ditched their requirement for coats and ties in the dining rooms and now treats the partners of unmarried members as full members, not guests. That includes same-sex partners. The Club says added about 25 new members from 2012-2015, for a total of 488.

“What the private golf industry has failed to come to grips with is that the options they provide were designed for another generation of golfers, not the golfer of today.” – Jim Koopenhaver, Pellucid Golf Research.

Third Place Theory Drives Social Capital

linkedin4According to Ray Oldenburg, author of the Great Good Place, the third place, (or third space), is the social surroundings separate from the two usual social environments of home (“first place”) and the work (“second place”). Examples of third places would be environments such as cafes, clubs or parks. In his influential book, he argues that third places are important for establishing feelings of a sense of belonging.

Private clubs have always provided a third place destination for members. Not only as a home away from home, but also as a means of increasing one’s social capital. With increased dependence upon the internet, social media sites have grown tenfold in the past decade with 65% of U. S. adult population using social networking sites, according to Pew Research Center. Social currency is quickly becoming a professional and personal measurement in the lives of members. In one form or another, social currency rises out of on and offline social networks and communities. As in the past, social currency came in many forms in a private club. In all cases, social capital is about increasing one’s sense of community, helping for one’s identity providing status and recognition.

Third Place communities are neutral areas where members can gather and interact. Beyond the realms of home and work, members can put aside their concerns to engage in conversation and camaraderie.

“If it ain’t broke, don’t fix it.”-No one in the Private Club Industry since 2009.

Marketing theories are on the low end of the learning curve for most private golf clubs. With limited access and a captured audience through member referrals to sustain waitlists, club boards and management never needed marketing strategies.

However, a pristine, well-conditioned golf course alone is no longer enough to differentiate a competitive position to attract members. As the world around clubs continue to change, so will the members that join. As the private club industry continues down the road to recovery, it has become imperative that they market themselves based upon how existing and potential members perceive the club.

As clubs continue to transform towards the future, it will be interesting to observe how quickly new norms will be adopted. For example, as mobile devices continue to replace other forms of communication, what will become of tee times and menu ordering? With video continuing to grow exponentially in the field of education, how will the relationship between the teaching golf pro and long distance member be impacted? Considering how the rate of change in the private club industry has accelerated in the past five years, how quick will these changes take place? Possibly sooner than we think.

 

 

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