What’s worked—and what hasn’t—to help clubs hold existing membership levels and attract new prospects.
If Groucho Marx sent his famous resignation message (”I don’t want to belong to any club that would accept me as a member”) to a membership director today, it’s quite likely he’d get an immediate reply pointing out that the club was doing much to improve its facilities and programs and greatly increase its value for members—and as part of that, the staff was at Mr. Marx’s service, to try to help him find ways to like himself better.
Big Challenges for the Coming Decade
This is the final installment of a special series appearing in selected issues of Club & Resort Business in 2010, to address areas of key focus for club and resort properties as they enter the second decade of the new millennium. Previous installments in C&RB’s Big Challenge series included:
• “A Capital Spending Thaw?” (The Big Challenge for Capital Spending, January 2010)• “Stewards of the Land” (The Big Challenge for Course & Grounds, June 2010)
• “Destination Dining” (The Big Challenge for Food & Beverage, October 2010)
If that didn’t win him back, Marx would then probably get a second appeal promoting how the club now had a special offer that would lower the initiation fee, reduce the dues, spread out payment requirements and allow a no-obligation trial period—all to provide greater affordability that might make it much easier for him to learn to tolerate his own presence.
With the recent recession putting unprecedented strain on even the most entrenched member relations, and intensifying the need to justify every club’s value and expand its appeal, club managers have been challenged like never before to keep existing members from jumping ship, while at the same time finding, and bringing, new ones aboard. This has led to a flurry of new strategies and tactics for member development and member relations that many managers had never been schooled in, trained for, or had much experience with.
In more than a few cases, the membership crisis reached deep enough to accelerate a wave of new interest in mergers, partnerships, reciprocal arrangements and other forms of relationships, to help try to save one or more of the properties involved. Perhaps the most notable success story in this regard comes from Milwaukee, where such a solution is credited with helping to preserve the property and membership, if not the name, of the 80-year-old Brynwood Country Club.
|Clubs like Birmingham CC have attracted new interest through carefully crafted trial memberships that provide opportunities to experience their special appeal.|
With its bank pressuring Brynwood to pay off a $2 million note at the same time its golf membership had shrunk to life-support levels, Brynwood members approached counterparts at the 1,300-member Wisconsin Club last year to work out an arrangement through which the social club, in downtown Milwaukee, entered into a lease-with-option-to-buy agreement for operating control of Brynwood.
The Wisconsin Club put its own signage at Brynwood’s gates, made a series of upgrades to the clubhouse and course, and began to market golf memberships in addition to two other classifications (Dining and Social/Pool/Tennis).
“Our membership went from 110 golfing memberships to 275 in approximately 60 days,” reports Curt Larson, who had been the Head Golf Professional at Brynwood and now has the same position for the expanded Wisconsin Club. Between the three categories, Larson adds, there are now 1,500 members for a combined downtown/country club operation that expects to approach $11 million in revenues in 2011.
“We just approved to let our golfing membership grow to 300, and this should be rather easy to achieve,” Larson adds, “as we have nearly 100 people on the waiting list.”
Other new connections between golf/country and city clubs have also been forged in response to the latest membership alarm. Most of these have allowed the properties involved to continue to operate independently and under their own names, while in effect adding a second club, or access to some of its features and benefits, to a membership’s value.
City and business clubs, much more experienced in fighting off threats to their existence over the years, have also not held back on their own to roll out new enticements designed to maintain membership momentum during the latest downturn. For example, the Detroit Athletic Club (DAC) introduced a cleverly named “241” program (the club is located at 241 Madison Ave.) aimed at increasing corporate memberships by discounting initiation fees for each additional member from the same company.
Dealing with the “D” Word
The DAC, and other city clubs, have certainly not been alone in using discounts and other financial incentives as a primary tactic for membership initiatives launched in response to the recession. Of the variety of strategies employed over the last two years to try to reverse falling membership trends, in fact, approaches designed to address affordability issues have clearly been the most pervasive.
This has led to renewed debate about the dangers of such tactics—in particular, how slashing initiation fees and discounting dues structures risk permanently damaging the value of membership and also incurring real resentment among existing members who paid much more to get, and stay, in the group.
Already, some clubs that lured additional members through deeply discounted deals are starting to cope with a new set of challenges, as they discover that whatever short-term gains they made have not only raised new service and member-relation issues, but also longer-range questions about the property’s ability to maintain its identity, traditions and culture.
These clubs are learning that “you can’t have it both ways,” says Dave Riley, a business consultant who became a member of Green Hill Yacht & Country Club in Quantico, Md. after moving to Maryland’s Eastern Shore to retire. Last year, Riley offered to serve as the club’s General Manager, for compensation of $1/month, to help it address serious membership and operating issues that had the club’s Board contemplating a bankruptcy filing. He has since helped the club retire debt, improve facilities and revamp its membership structure.
“There are rules for every business model, including clubs, that you must always play by to be successful,” Riley notes. “If your compromises diminish what makes clubs special and exclusive, it will chip away at your brand and value, and ultimately threaten your success.”
Trials and Inspiration
To preserve the core attributes of membership while still addressing the affordability issues for the next generation of members that were only heightened by the recession, many properties have taken care over the past two years to craft new offers that provide prospects with an opportunity to experience clubs’ benefits with less upfront risk or obligation, but still require eventual commitments that properly reflect the privilege and value of joining. (And, to help get buy-in and calm any brewing resentment about these “deals,” the programs have often included strong incentives, in the form of substantial dues or activities credits, for existing members who help to successfully attract new ones.)
|The challenge to attract the next generation of membership has spawned progressive concepts like this “kids’ camp” area, with individual parks for different age groups, that was drawn up as a potential new idea for Birchwood Farms G&CC.|
These programs have included backloaded initiation fees and dues and other forms of extended payment options, along with what’s proved to be one of the most effective methods for achieving these objectives: the trial membership.
At Oakwood Country Club in Lynchburg, Va., new ownership offered a free, three-month trial membership to former members through a “Come Home” program, and over 30 members who had jumped ship after the club fell on hard times are now using the offer to give it a second chance.
In Michigan, a market that was especially affected by the downturn, Birmingham Country Club in suburban Detroit saw over 30 prospective members, all of whom were still required to go through the normal application process, enjoy the benefits of the nearly 100-year-old club on a six-month trial basis this year, during which they only paid dues after making a refundable deposit. The club is optimistic that it will now convert well over half the trial group to full memberships.
“There’s still pent-up demand that [trial memberships] can appeal to,” believes Birmingham CC’s General Manager/Chief Operating Officer, Joe Basso, MCM, CCE. “But to get those people to consider your club, you have to take some element of the risk off the table. And you have to look at it that while yes, there’s always the potential for ‘free riders,’ even if the trials don’t add members, they can still generate operating revenue.”
Finally, from the other end of Michigan comes the important reminder that even the most tempting financial incentives won’t be enough to attract the next generation of members, if efforts aren’t also made to continually reshape clubs to maximize their current, and future, appeal.
At Birchwood Farms Golf & Country Club in Harbor Springs, Mich., a progressive idea for a new, permanent “Camp Birchwood” has literally been put on the drawing board, as the club, which currently has a median member age of 64, considers how it could turn unused land on the property into new facilities that would maximize its appeal to younger families. As initially presented for consideration by the club’s Board, the intriguing new facility would include individual parks for different age groups, “adventure trails,” hockey and skating rinks, sledding hills, and a huge outdoor fireplace that would serve as its centerpiece and a natural family gathering point—perhaps such an appealing spot that even Groucho Marx could find enjoyable fellowship there.
Making Every Day An Event
AS THEY START TO RECOVER from the double-barreled trauma of a recession-induced rise in member resignations at the same time the prospect pool went bone-dry, many club managers have resolved to find more and better ways to demonstrate why belonging to and using a club should always have special appeal and never be considered discretionary, no matter how tight times might get.
For many clubs, this involves making the most of special opportunities to celebrate a club’s unique place in history or a community. As part of the ongoing celebration of its 50th anniversary during 2011, Round Hill Country Club in Alamo, Calif. plans to adopt a ‘60s theme for all of its usual events. “Our goal is to have a special Golden Anniversary twist in every aspect of our calendar throughout the year,” General Manager Greg Gonsalves, CCM, wrote in the club’s October newsletter. “[Members] won’t miss out on the experience if they can’t attend some of the events.”
Even without an anniversary opportunity, some clubs are working harder to make their events more on-target and indispensable for all segments of their membership. “We created additional committees that focus exclusively on creating events and member-connect opportunities in their age groups—Junior Executive Committee, Senior Executive Committee, etc.,” reported Thomas Preuml, General Manager of the Houston (Texas) Racquet Club, in a comment posted as part of a discussion on meeting membership challenges on C&RB’s LinkedIn page (www.ClubandResortBusiness.com/LinkedIn). Adding this special committee focus, Preuml added, “positively affected retention and grew our Junior Member roster.”