According to Frank Vain, President of the private club consulting firm The McMahon Group, the debate over membership and dues structures revolves around theory and practicality.
The basis of any private club, he says, is that a group of people join to promote or participate in a common interest. That unity, he stresses, is “an essential construct for successful clubs. It is difficult for them to accept and address diversity in what are really relatively small businesses with intensive capital and labor costs.”
About a year ago, his group looked at survey results over time. They revealed that 10 percent of clubs ever surveyed had overall membership satisfaction of 90 percent or higher; the average club had a satisfaction level of 78 percent.
“One of the key traits of these more highly successful clubs,” says Vain, “was the level of agreement among their membership about the club’s mission and purpose. So there is a clear benefit to the organization in having a membership that is unified. From a membership-structure standpoint, this means fewer segments and divisions.”
Richard C. Day, Chairman and CEO of the Hospitality Resource Group, sees many clubs scrambling to accommodate a growing population interested in becoming members of private clubs, particularly younger members. When done properly, he says, an expanded membership structure can still attract more members.
“The future of clubs is young professional families with children,” he says. “Many traditional clubs have, for a long time, resisted this demographic because they didn’t want children running through the clubhouse. Clubs that are not family-friendly and do not have facilities for children and families find themselves aging and not being able to attract new members.”
But sometimes this effort to please all of the people all of the time does more than just create an identity crisis for the club; it can also be devastating financially. In fact, Day’s company has a client that presently needs to add to its facilities—but the club has been so poorly run that its initiation fees have gone straight into operations, leaving the club with no money for capital improvements.
Dues, Day reminds us, are designated to cover operations and meet the current budget. If that budget income falls short in covering those operations, members usually face an increase or assessment—“neither of which is overly palatable.”
The most optimal structure, Day argues, is one that covers the full spectrum of membership options: full single, full family, recrea-tional/social single, recreational/social family, full single social, full family social, corporate, legacy and senior.
“It is also important,” he says, “to recognize ‘significant others’ and domestic partners. Club policies are all over the map here, as well.”
See related story, "In Due Time."
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