Transcript Marketing Is NOT NECESSARY at Private Clubs

Marketing Is NOT NECESSARY at
Private Clubs
(Common reasons cited by Board of Directors,
Members and some Managers)
 This club should be exclusive, we don’t want
everyone having access to the club
 Members will think the club is in trouble. It
will no longer be PRIVATE!
Marketing Is NOT NECESSARY at
Private Clubs (cont.)
(Common reasons cited by Board of Directors,
Members and some Managers)
 We don’t want the club to be over crowded. We like
to play golf without reserving a tee time or having to
reserve a time one or more days in advance!
 If we have a lot of business in the dining room, we
won’t get the individual attention and service we
expect at a private club!
Barriers to Membership
Marketing in Private Clubs
 Board of directors reluctant to market
clubs
 Don’t want to upset long time members who cling
to tradition of the club not marketing itself
 Marketing is a new area for clubs
 only in the last decade
Barriers to Membership Marketing
in Private Clubs (cont.)
 Experienced managers are unfamiliar
with marketing strategies and what
works in private clubs
 If they are not “Standing In Line” to
dine at your club or use the other
facilities you need to market!
Four P’s of Marketing
 Product
 Type of Club
 Quality
 Type and number of services, amenities, etc.
 Price
 Cost of Membership
 Initiation
fee, equity portion, dues, menu
prices, etc.
 Free service vs. fees per use items
Four P’s of Marketing
(cont.)
 Promotion
 Internal advertising to promote more member usage
 Public relations to create image of good citizen in
the community
 External strategies to create awareness of Club for
more Members
 Place
 Location of the Club - Demographics of the area,
Number of Businesses, Competitors, etc.
Trends for Private Clubs
 Most clubs do not have a waiting list for all
categories of memberships (78%)
 Clubs are using more assertive techniques to
pursue more member or to keep their waiting
list “stocked” with prospects
 Clubs are offering more membership
categories in order to increase and retain
members
Trends for Private Clubs
(cont.)
 Clubs are changing policies to make membership more
attractive to different groups, e.g.: women members
allowed to play golf on weekend mornings
 Many clubs are pursuing revenues from different
sources:
 Unrelated business income
 Non-traditional income
 Clubs are using more assertive techniques to pursue
more banquet and catering business
Trends for Private Clubs
(cont.)
 A concern that unrelated business income may
exceed 15/35% of the club’s revenue
 The IRS has indicated that the insignificant level for
non-traditional income is 5% of the club’s total
revenue
 With more families having dual income earners,
there is a need for members to spend any free time
they have with their families, including club usage
Trends for Private Clubs
(cont.)
 Health & fitness is no longer a fad, but a
lifestyle for many especially the baby boomers.
Clubs will need to add program, facilities, and
items on the menu to accommodate this trend
 There are more members at private clubs than
ever before, but the supply of new clubs has
exceeded the demand or number of new
members
Trends for Country Clubs
 Golf is the most important activity to members
and the activity most often participated in at the
club
 Golf is the number one reason cited by
members for joining the club
 Slow play is a significant concern among
members, yet they want usage by family
members to increase
Trends for Country Clubs
(cont.)
 Clubs are reporting more outside rounds,
which is attributed to more outside
tournaments
 Although participation in tennis and
swimming is much lower than golf,
members cited these areas as an important
reason for joining, especially for the family
members
Trends for Country Clubs
(cont.)
 Non-golf activities (swimming, tennis and
family programs) are more important to
younger members (baby boomers) than older
members
 Full service, state of the art exercise/fitness
centers are being added by many clubs, not just
a small room with a few pieces of equipment
Importance of Marketing
 Survey conducted by CMAA (Club
Managers Association of America) of its
members found that club managers thought:
 Marketing was a high priority
 Selling memberships was very important
 Private clubs are experiencing a declining
membership base nationwide
Reasons For Decline In
Membership Size at Clubs
 Aging Membership
Many clubs had a closed membership
during the 70’s and 80’s
40 year olds (prime time to join a private
club) were not replaced
Members at these clubs are now in their
60’s and 70’s
Reasons For Decline In
Membership Size at Clubs (cont.)
 Different Preferences for Baby Boomers
 Clubs with a “gray” or “blue” haired impression are not
attractive to potential 40 year olds
 Preference for more casual dining than formal
 Social tradition is not as important to this market
 Economic Downturn Across the Country
 Businesses cutting back on entertainment expenses
 Businesses closing or cutting management positions
(potential members)
Reasons For Decline In
Membership Size at Clubs (cont.)
 Tax Law Changes
Entertainment expenses initially decreased
from 100% to 80%
1994 changes : entertainment is now only a
50% deduction and dues are no longer
 Overbuilding of Private Clubs
Real estate developments (country clubs)
Office buildings (city & city/athletic clubs)
Reasons For Decline In
Membership Size at Clubs (cont.)
More Competitors
More upscale and quality restaurants
available, giving members an
alternative for upscale dining
Hotels, convention facilities, and
restaurants offering better banquet
facilities and service
Reasons For Decline In
Membership Size at Clubs (cont.)
 More Competitors (cont.)
 High end daily fee golf courses
Provide high quality services once only available at
private clubs
 Course conditions comparable to private clubs and in
some cases better
 Target market is avid golfers with high standards which
has been the market for country clubs

 These for profit businesses can and are much more
aggressive in marketing their product than clubs are
allowed to
Methods to Increase Membership
 Decrease initiation fees and or dues
Appropriate only if pricing is not in line with
the Club’s position in the market place
 Temporary price reduction during special
programs
Members only refer friends when a “special
“ is being offered (Cherry-Pickers)
Methods to Increase Membership
(cont.)
 Incentives used for Member referrals
 Repeat usage sends a message the Club is in
trouble
 Rely on Membership Committee to be
aggressive in pursuing more Members
 They are use to being only processors of an
application, not in identifying candidates for
membership
Membership Director
 Facilitates Members with the referral process
 Takes over the administrative
responsibilities:
 Collects paperwork: application, letters of
recommendation, etc.
 Sends materials, brochures, etc. to candidates
 Gives tours of the Club
 Follows up on applicants to ensure they join
Membership Director
(cont.)
 Helps in identifying candidates: guests,
executives, professionals, etc.
 Helps in matching up prospects with
Members that may know or willing to
sponsor them
 Implements more aggressive strategies if
Member referral programs do not work
Research Project
 Questionnaire sent to 400 GMs nationwide that
were members of CMAA
 Questions on marketing and membership activities
 226 respondents - 57% response rate
 Respondents were from 42 different states
 Only 22% of the clubs had a waiting list for
membership
Waiting List Information
 Clubs With a Waiting List (22%)
49 Clubs (22% of 226) had a median of 30
individuals on their waiting list
59% of the Clubs (29 of 49) with a waiting
list reported their full or regular
membership only had the waiting list (13%
of all clubs)
Waiting List Information
(cont.)
 Clubs With a Waiting List (cont.)
Only 41% of the Clubs (20 of 49) with a
waiting list reported that all of their
membership categories were full (9% of all
clubs)
 Clubs Without a Waiting List (78%)
Median number of memberships still
available at a club was 34
Clubs With A Membership
Director
 Clubs with a membership Director
37%
 Number of Membership Positions (83 of
226 Clubs)
 One
 Two
 Three Plus
63%
19%
18%
Clubs With A Membership
Director (cont.)
 When the Position Was Created (83)
 Less than one year ago
 One to three years ago
 Three to five years ago
 More than five years ago

Only 16% of all clubs
(13)
(21)
(12)
(37)
16%
24%
15%
45%
(226)
 21% of all clubs have added a membership position
in the last 5 years
Position Type
 Full-time
72%
 Responsibilities exist in another
department
12%
 Part-time (less than 30 hours)
6%
 Volunteer, board or club member 10%
Compensation
 Median total compensation:
$30,001 to $40,000
 Median base salary:
$20,001 to $30,000
Compensation (cont.)
 Financial Incentives Reported
 Commission based on number of new memberships
55%
 Commission based on initiation fees generated
43%
 Commission based on dues revenue generated
32%
 Commission based on total club sales
11%
Marketing Activities
 83% - Members contacted for referrals
 52% - Host member-guest parties
 37% - Attend local community
meetings for networking, i.e. rotary, etc.
 25% - Direct mail to prospects,
inquirers
Marketing Activities
(cont.)
 24% - Acquire mailing lists of new
residents and professionals
 16% - Acquire lists of tenants,
corporations and companies
 11% - Purchase mailing lists from
professional associations & groups
Implications
 Private clubs have started to market
themselves only recently, to compete
with “For-Profit’s” and other clubs
 It will be common in the future for
many private clubs to hire a membership
director
Implications (cont.)
 Membership director’s primary role will
be to identify prospects and make some
type of contact with them and not “just”
process membership applications
 Clubs are currently implementing a
variety of external marketing activities
and that will increase in the future