Staying Power

By | June 28th, 2017

Victoria CC’s by-laws prescribe a membership capacity of 500; the “100 Reasons” promotion has taken current membership from 360 to over 470 and may prompt the club to look at a cap adjustment.

To address “anemic membership,” Victoria CC offers a referral program that ties new members to existing ones to give both parties permanent dues reductions for as long as they retain their memberships.

In their desperation to revive sinking membership numbers in the post-recession years, many private clubs launched programs that rivaled the “pay no interest until [insert future date]” pitches of appliance and furniture stores.

But just as many consumers can’t keep up with payments for giant flatscreens or sofas bought through such come-on deals, especially when the grace period ends and huge compounded interest comes due, many of the new club memberships bought through deferred initiation-fee/dues packages also eventually had to be “returned,” either voluntarily or by default, after costs became too onerous.

When Patrick Ferkany, CCM, arrived at Victoria (Texas) Country Club (VCC) to be its new General Manager last October, he knew that the club, which was established in 1924, had “seen its share of highs and lows” in its 90-plus-year history. And as he immersed himself in his new position, Ferkany adds, “I quickly determined that we were at one of those lows, [because] membership was anemic.”

THE GOAL: Address “anemic membership” at Victoria CC with a program that would eliminate initiation-fee and dues-structure barriers for new members without creating collection/retention issues down the road or harboring resentment among existing members.
THE PLAN: Tie new members to existing ones through a referral program that gives both parties permanent dues reductions for as long as they retain their memberships.
THE PAYOFF: Over a 25% increase in new membership within three months, including a sizable number of those who had retired their memberships.

Ferkany, who brought over 20 years of experience from notable private clubs, including the Dallas (Texas) Athletic Club, Mountain Brook Club in Birmingham, Ala., and Austin (Texas) Country Club, made it a point right after arriving at VCC to get coverage about his hiring in local newspapers and other outlets, and to stress through that exposure that he was planning to make growing the club’s membership through new promotions his immediate and primary focus.

Then Ferkany sat down with VCC’s Membership and Marketing Director, Claire Hallett, and the club’s Director of Golf, Breene Cantwell, to brainstorm how to deliver on that plan, and quickly—Ferkany went public in the articles that were written about his arrival that he planned to have a new program in place by the end of the year.

Hallett, who had come to VCC a year earlier, and Cantwell, who has been at the club for 16 years and also served for a time as its GM, identified that the club’s current initiation fee and dues structure were both serving as impediments to attracting new members. And Ferkany knew that simply offering deep discounts or waivers for new members was not a road he wanted to take VCC down, because of the resentment it can create among the club’s existing supporters.

Posters displayed in the Victoria CC clubhouse made it clear to existing members that the “100 Reasons” promotion had as much in it for them as for anyone they recruited.

Instead, VCC set out to aggressively design a program that would tie current members to new ones, and not just temporarily. “It’s always the case that your best membership recruiters are the members you already have,” Cantwell notes. “But we needed to get beyond offering the typical incentives for bringing in a friend that don’t tend to get [current members] too excited.”

The VCC team decided that a better approach would be to offer 100 incentives—as in, current members who refer new members would earn a $100 reduction in their own monthly dues, as well as for the dues the new members would pay. And the reductions would be permanent for as long as both parties retained their memberships. (Existing members who brought in more than one new member earned additional food-and-beverage credits for the subsequent referrals.)

The VCC “100 Reasons” promotion also provided an initiation-fee incentive for the new member that was more workable for both the member, and the club. The fee could be deferred for 24 months, and then could be paid in monthly payments of as little as $25 a month after that period.

In addition to eliminating the barriers that had caused prospective new members to go elsewhere (and VCC’s promotional materials aggressively positioned its new cost structure vs. that of its competition), or not join anywhere at all, the “100 Reasons” offer also proved enticing to a number of former members who had resigned, often because of cost issues, but now saw new value in returning to VCC.

General Manager Patrick Ferkany

All told, the promotion brought in over 100 new members in just three months. Just as importantly, tethering so many of the current membership to those who were joining greatly sped up the processes of orientation and assimilation. “It’s built a larger community for us immediately, with a lot of instant camaraderie [among old and new],” says Cantwell. “Member usage is also up 12%, and guest fees are up 10%.

“[The membership promotion] brought a lot of new youth and energy [to the club], too,” Cantwell adds. “We’re now the place to be in town, and we’re scheduling a lot more parties and functions.” Best of all, he notes, “a study we did of the first 75 new members showed that beyond their dues, in their first three months they accounted for $25,000 worth of activity and spending. When you factor that out over four quarters and for over 100 new members, that’s quite a sudden and solid impact for your bottom line.”

While the momentum of the “100 Reasons” has slowed after its initial three-month success, its success has pushed VCC towards the membership capacity of 500 that is prescribed in its by-laws—a limit that Ferkany says “could very easily be adjusted” should management decide to push for additional growth.

“This was not your typical, ‘Recruit a new member and get one month free, yippee…well, maybe not so much…program,’“ Ferkany says. “It’s a membership program that has some serious traction to it. And I think it’s a story that [can apply to other properties], especially other smaller, ‘town-type’ clubs [that feel they are] desperate for members.”

When the staff at Old Sandwich Golf Club in Plymouth Mass., noticed that many members had begun to drive Teslas, they reached out to the automaker to see if a partnership could be formed. Through Tesla’s “Destination Charging” program, a charging station (at a value of $7,500) was installed on the property for free, and Tesla also agreed to keep Old Plymouth’s location, because it is a private club, off its charging map that is shared with other drivers. Members can now charge their vehicles in about four hours—long enough for a round on the golf course.

INSTANT IDEAS

The Seattle (Wash.) Yacht Club now uses a “speed dating” approach for its new-member orientation, with members moving, after introductory remarks from the club’s Commodore, from station to station to meet with representatives of six key departments for periods of 8 to 10 minutes. Each department representative provides handouts with details of the topics covered at each stop and room for notes. A xylophone chime Is sounded to signal when it’s time to move on to the next table…The “Kick-Start” membership initiative at Sailfish Point, Stuart, Fla., was designed to address delays that the mandatory-membership community was experiencing with new members joining its Golf Club (new members may join the Golf Club after being approved for membership and purchasing their home, but in some cases it was becoming three years or more before they were fully moved in or ready to make full use of the property). The Kick-Start program, which allowed members to join the Golf Club and pay only dues while deferring capital payments for two years (and then stretch out capital payments over another three years if desired) effectively addressed the issue and generated 13 new Golf Club memberships in a short period of time, the club reports…The Tuxedo Club, Tuxedo Park, N.Y., has developed a successful “feeder system” to bring younger members into the club through its “Oak Leaf Privilege Program” that features a dues structure designed to provide an incentive for joining at as young an age as possible. In addition to a lower dues structure, the program waives an initiation fee, along with the capital improvement fee, club facility surcharge, and food minimum, until the candidate is elected to full membership. All facilities of the club, including guestrooms and rental apartments, are made available to Oak Leaf members, but there are restrictions on golf and club-competition participation. Currently, the club reports, about 50% of Oak Leaf participants are elected to regular membership, and the program has “significantly increased the retention rate of members seeking to be elected to full membership.” …For the children’s furniture registry at Addison Reserve Country Club, Delray Beach, Fla., members with grandchildren or other small guests can borrow items such as car seats, high chairs, bassinets, etc., from members who have those items to spare. The club has established a working list of the items available, and members return items in the same condition in which they received them

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