Membership in a private club is meant to be an enriching experience. Through their keen focus on member enjoyment and satisfaction, clubs exist to fill a variety of important tangible and intangible desires and emotions. They are a home away from home where members and their families can come together and enjoy some of life’s most important events; they allow easy access to special programs and recreational facilities; and, most of all, in this increasingly fractured world, clubs provide places that encourage members to socialize and build bonds with others like themselves. Despite their special member-focused mission, many clubs find themselves struggling to not only attract new members, but also to keep the members that they have.
At this year’s 2012 National Club Conference in New York City, I moderated a panel on membership development practices and programs, one of the critical pieces of our industry’s future health. The panel was filled by executives with long track records of success—Jeffrey McFadden of the Union League of Philadelphia, Stephen Ready of VCT, and John Schultz of Carmel Country Club— each with a unique perspective on how to best keep current members engaged and happy while simultaneously drawing new members into the fold. The panel discussion made clear that while clubs have a long history of exclusivity and privacy, and these elements remain a vital part of what gives private clubs their identity, these characteristics also create a distinct need to adopt a marketing mindset that fits within the context of privacy limitations. What is required is a new club model supported by an enhanced approach to membership development.
Facing Facts
While much has been made of the impact of the 2008 financial crisis on the viability of clubs, the fact is that the club industry has been in decline since the early 1990s—a period which includes more economic booms than busts. The ups and downs of the economy alone don’t account for the significant reduction we’ve seen in both the absolute number of member-owned private clubs or the smaller number of members in the remaining clubs. The issue is much larger than that, and can be summed up in a word: Relevance. Although shifting demographics, changing lifestyles and an increasingly diverse society has for many years demanded changes from the community of clubs, the bulk of the industry has failed to respond.
An increased number of options, including innovative restaurants, alternative recreational activities and social events that are completely unrelated to club membership are also driving up competition for members’ valuable time. Add that to the over-saturation of the club market, and it’s easy to see why clubs have to try harder than ever to drive member interest and engagement just to prevent member defection, let alone create an influx of new members. So as we talk about the issue of membership development, we must first focus on the issue of the offerings, which brings up the maxim: the first rule of successful sales and marketing is to have something good to sell.
The failure to adapt effectively to the new world order is the primary reason why the bulk of the club community has had to resort to discounting fees and dues in order to attract members. It is absolutely mind boggling that a practice which further undermines a club’s ability to develop the facilities and programs it needs to drive value has in many corners become the go-to method for attracting members. Despite the fact that price-based membership drives are tactical solutions to a strategic question, they have become all too common.
The Target Market Has Specific Interests
Each year, clubs lose an average of five percent of their members due to circumstances entirely beyond their control, be it relocation, death or infirmity. This drives your initial mandate for marketing: replace the five percent! Of course, if you want or need to grow the total number of members, your approach must be that much more rigorous and effective.
In order to create a constant influx of new members to help offset normal attrition and keep the club strong, appealing to the under-50 age group is absolutely essential. In fact, clubs should be looking to young, under-50 prospects as their primary targets, since, for most clubs, the prime joining age is between 36 and 45 years old. Unfortunately, high levels of college debt and a terrible job market are causing many young people to defer or delay pursuing marriage or starting a family until much later in life than previous generations, let alone considering investments like club membership. This greatly increases the urgency and energy that clubs must put toward their young member initiatives. For prospects of a certain age—most likely age 39 and under—clubs should be very aggressive.
As a starting point in planning their marketing initiatives, every club should analyze the data available on the age and other characteristics of those who have joined over the past five years. This will help them develop a profile of their own specific target market. In most cases you will find a great deal of commonality and clear opportunities, which can be used to develop your membership plan, pricing, messaging and networking initiatives.
Granted, creating an attractive environment for younger members can be tricky to do without upsetting the club’s older members, but focusing your club’s efforts solely on those things that appeal to the previous generation of club members is a sure way to alienate the new one. Member surveys almost always reflect the substantially lower levels of satisfaction among younger members—the very individuals who are the most vital part of a club’s future success and longevity—and more importantly, your critical link to the prospective member marketplace.
The most common disappointments with clubs being reported by young members are limited access and lack of appeal to families, as well as a lack of social programming for both adults and children that allows opportunities to spend time with their friends and families.
Younger members are also heavily focused on health and wellness activities and often rate their club’s health, fitness and wellness facilities and programs below par. Why should young members have to pay high membership costs to a club, and then have to take on a second membership to a gym because of the club’s unsatisfactory fitness offerings? These are the kinds of questions that create barriers to joining for membership prospects and can contribute to attrition among a club’s younger member base.
Another barrier to young member satisfaction is the level of formality that is standard for many clubs. When young members want to go to the club to work out or to enjoy casual dinner, they don’t want to have to change into different attire—and neither do their children. For many, it’s simply easier to go somewhere else for a fun time or a bite to eat—and there’s certainly no lack of alternative options.
Furthermore, some women may not see the value inherent in the club environment and may feel that there are still distinct gender issues and barriers for female members. This can be especially problematic for clubs in today’s changing society. According to recent studies and reports, women are the primary influencers and deciders when it comes to family purchasing decisions, and if the female spouse doesn’t feel like club membership is a worthwhile investment for her, it’s unlikely that the family will end up joining in the first place, let alone retain their membership if they do join.
We are only in the initial stages of the sea-change taking place in who constitutes the primary earner in American households and the impact this has on financial decisions. It is increasingly the case that the female spouse will contribute half or more of household earnings, even at the upper end of the economic spectrum in which clubs operate, and if clubs don’t wake up and do a better job of making women feel like a vital part of membership, they will slip even lower on the relevance scale.
Understanding Leads to Success
The first step in addressing these issues is to understand what the young members of today really want.
Women & Families
Women are the primary financial decision makers in most households, so it’s important to appeal to their wants and needs in order to encourage them (and by extension, their families) to join the club. Young couples and the women who direct their financial spending want the club to treat them with respect and show concern for their interests and, of course, be a good place to raise a family. Just as they would carefully analyze the offerings of a school or community when deciding to buy a house, the club will be the family’s home away from home, and younger women and mothers want to know that the club has the right activities, social events and atmosphere for themselves and their children.
Ensuring that the club has plenty of offerings that are family-friendly and focused helps women and mothers envision spending quality time with their children and families at the club and enables them to picture it as an integral part of their lives. This kind of added value to club memberships—creating activities for women, families and children beyond the traditional golf, tennis and dining options—helps clubs appeal to future generations.
A Value Driven Society
Another part of appealing to the changing values and needs of the younger generations is creating year-round value. After the recession, many people are hyper-conscious of receiving good value for their investments—especially in terms of experiences. Thus, if club members are paying dues year-round, they want a return on that investment in the form of year-round club access and activities. They want a place where they can feel comfortable dropping in—regardless of the time of year—and find something to do that they enjoy.
A Casual Focus
Something that goes hand-in-hand with the ability to drop in at the club any time of year is the ability to do so at any (reasonable) time of day without prior planning or forethought. Younger members today want access to a welcoming, casual and informal environment, where they can simply “drop by” for a quick, casual meal or to say hello to friends—someplace where the whole family is welcome. Many younger potential and current members don’t want to spend time preparing to go the club—they just want the ability to go when they can.
Members are also looking for particular elements that contribute to the casual feel of their ideal club, such as modern facilities, outdoor dining, sports bars, cafés and casual restaurants. Resort-style amenities are also a good way to attract younger members—creating an environment where it always feels like the members have gone on a relaxing mini-vacation without forcing them to conform to overly-formal, traditional standards or use outdated facilities.
Get the Right People Involved
It is particularly important to ensure that the newest members of your club are absolutely thrilled with the experience, since about 80 percent of new member referrals come from club members who have been members for five years or less.
Accordingly, it’s very important to engage young members in the membership development process. Most membership committees do not accurately reflect the target market, which puts them at a disadvantage in setting a tone, finding or connecting with prospects. Try to ensure that young members are represented on the membership committee so that they can help bring in their younger peers. Even if it’s not possible to have strong representation on the committee that runs the approval process, recruit young people to serve as Ambassadors that you can bring together during special events offered to encourage new, young members, such as open houses, youth-oriented golf or athletic events, wine and cheese parties or cocktail gatherings.
The Value of Rewards
In this new value-driven, rewards-based society, clubs can encourage outreach, but incentives are vital to facilitating the environment and activities that encourage members to bring in new members. Jeff McFadden has experienced incredible success at the Union League of Philadelphia, increasing its membership from 2,100 to 3,300 (a net gain of 50 percent) during his tenure. “When you’re trying to appeal to the ‘Me’ or ‘Rewards’ generation, everyone wants something,” noted McFadden during the presentation.
The Union League rewards current members aggressively for bringing in new ones. Before they started their rewards program, only five to six percent of current members actively sponsored new members. After they introduced rewards, that number jumped to nearly one in four members—and it approaches one in three for those members who have been with the club for less than three years! The Union League program allows members to pay a portion of their initiation fee upfront and the balance over a three-year period. For those individuals who bring in a new member during their first three years, the remaining portion is waived and any money previously paid toward the second portion of their initiation is returned to them.
Meaningful rewards programs encourage current members to bring in new members. The panel gave several examples of successful ideas, such as instituting credit card-style rewards or offering financing plans to make membership more accessible. Some clubs set deadlines for zero percent financing plans that can help pull members in before a certain event, like the ground breaking on a new capital project or the impending increase in initiation fee. Accepting credit cards is also important—encourage members to think of the number of “miles” they can earn. When members bring their own friends to clubs, it creates a homogenous culture all on its own. Members create their own dynamics when their friends are there.
Focus Shifts
John Schultz of Carmel Country Club believes that there are several steps that clubs can take to help increase demand, such as building the member experience, differentiating their club within the marketplace, reviewing their membership bylaws to facilitate an effective but user-friendly member approval process, and creating a master plan. To help accomplish these broader goals, Schultz highlighted some of the tactics that Carmel Country Club used to attract new members.
“Our goal was to engage 40-year-olds—the next generation of club members—while going into more of a maintenance mode with regard to their 60-year-old predecessors,” Schultz commented. “One great way that we found to do this was by establishing ‘marquee events’ that became the absolute-can’t- miss events of the season. These events generated tons of buzz within the community and among members’ peers, while encouraging members to bring their friends along to join. This made those who weren’t club members feel like they were missing out and created a group that others felt they wanted to be a part of.”
Schultz also noted that removing even the slightest cognitive barrier to membership helped to remove an excuse not to join. It was with this mindset that Carmel made it acceptable to both wear jeans and responsibly use cell phones throughout the club. He also highlighted the club’s efforts to drive membership by enabling members to bring in their friends and associates to events at a reduced fee, instituting extended payment plans on initiation fees, encouraging legacies, and fostering commitment to families.
Constant efforts were made to remind the board of the club’s mission, vision and long-term goal to support families—and that all club improvements should reflect that. “If people are willing to commit the money and change the lifestyle promoted by the club to attract younger members with improvements like better pools and more social activities,” Schultz explains, “the improvements can be paid for out of the new member initiation fees that those improvements generate. ‘If you build it, they will come.’”
These new improvements greatly increased the popularity of social memberships at Carmel Country Club, and, despite steady increases in the joining fee, the number of social members has skyrocketed from 10 to 170 with a waiting list—proving that social activities, tennis and pool facilities can be just as successful as golf in driving memberships.
Marketing Communications
A large part of membership development is communicating with your members. Stephen Ready of VCT noted that strong communication efforts should be a central element of any membership strategy; they serve to build awareness, motivate members, and broadcast the club’s image and brand. Communications technology is constantly evolving, and it’s important to keep pace with member communication preferences. “Clubs have a unique relationship with their members that sets them apart from other organizations,” Ready noted during the presentation. “That relationship, built on trust in your club’s legacy and brand, by nature fosters more personalized, two-way dialogue with members.” Ready cautions that clubs aren’t taking advantage of their relationship, and many continue to simply “blast” members with generic e-mails, instead of creating meaningful dialogue that engages members on a customized, personal level.
Creating a strategic communications plan is one way to evaluate your club’s communications to members and also to leverage the club’s opportunities to provide the best, personalized strategy. (See accompanying sidebar for steps to create a strategic communications plan.)
Once you have a plan, the next step is to evaluate your resources and identify the tools that your club can incorporate into its strategy. When planning, members’ preferences can help your club most effectively direct its time and funds to the communications channels to which members are most receptive. Tracking member preferences is critical to gathering this kind of data. “As your members begin to interact at the club, you will learn more about how often they attend events, what they purchase, what their personality is like, and what they expect in terms of value,” remarks Ready. This knowledge can help you create target audience lists for custom communications.
“Most importantly, everyone wants to feel special,” Ready emphasized. One aspect of club services that members truly value today is personalization. After the economic downturn, there are many new affordable options for dining, leisure and entertainment that challenge clubs to work harder to create a worthwhile value proposition. One of the unique ways they can create a competitive advantage is by getting to know their members on a personal level and providing unique, personal touches that leave lasting impressions on their members. Members are looking for something that they can’t necessarily get everywhere else, and personalization and data gathering are the keys to creating “wow” moments.
In support of this, Ready cautions against sending the same message to all club members, regardless of their age, gender or membership type. “Members don’t want to go looking for information that appeals to their interests. They want information to be tailored to their preferences. Personalization can provide customized calls to action based on profile data. Personalization sets the tone for relationship building.” Customized elements, such as changing which photos of the members are published in their individual newsletter, can help to truly drive home the uniqueness of the member experience.
Building Awareness and Generating Prospects
In order to build awareness, it’s really important that clubs actually tell their members to ask their friends to join and to convey to them the reasons why. Instituting a “Member Ambassador” program is a great way to help spread awareness about the wonderful benefits club membership has to offer. Individuals who love their club are active and influential in getting others involved. Oftentimes, the individuals who would make the best member ambassadors are easily identified through event reservation lists and activity participation levels (those who attend a lot of club events are likely to be highly enthusiastic club members), previous member referrals, asking staff members, identifying which members take polls and surveys, and electronic communication metrics (active readers are also likely to be highly engaged in club life).
As with most things, there is a process for prospect generation. The prospect first needs to be aware of the club and its offerings and then have an interest in joining the club. Oftentimes, the club may be formally introduced to the prospect through guest use, an open house or, if appropriate, a trial member period. If these introductory visits prove to be enjoyable, the prospect may decide to join as a full-fledged member.
Once the prospect decides to join and makes it through the membership process, it’s vital to have a strong member orientation program in place to give them a good introduction to club life. If they’re engaged during their first year and establish a network of friends and social connections, then they’ll be ready to bring in new members by year two (for more information about the onboarding process, see the article “Creating a Smooth Onboarding Process” on page 34).
As new members become more satisfied and proud of the club’s lifestyle experience, make sure you give them easy ways to introduce their friends to the club. Create online member sponsorship forms accessible within your electronic newsletter (for example, create a link to a form that enables a current member to sponsor a new one) or other communication touch points.
When prospects are identified, having an effective software system in place to track prospects’ progress and involvement can be a highly useful tool that can help increase the level of personalization by gathering important data and information. Conversely, clubs can lose prospects by sticking to a one-size-fits all selling approach, according to Stephen Ready of VCT. “Knowing personal specifics about membership prospects can help to tailor the prospect’s introduction to the club,” Ready recommended. “Make sure that members have the right tools to reach out to prospects—try to make the process as easy as possible by teaching them how to reach out to members and giving them access to the material to help them with the process.”
A New Membership Model
Membership development is the foundation upon which rests the future of the club industry. More than ever, clubs must plan their outreach and then work the plan effectively. There’s a “new normal” environment, and demographic, economic and lifestyle factors forecast continuing challenges for private clubs. As a result, most clubs need to rethink their approach to membership development. Clubs must move from the reactive past to a proactive approach for the future—respecting traditional club culture and private status while adapting to stay relevant to the next generation.
Frank Vain is president of McMahon Group, Inc., a full-service, private club consulting firm dedicated to serving clubs in all aspects of their planning, clubhouse, golf and membership needs. He can reached at [email protected].
Jeffrey McFadden, CCM, CCE, is general manager of the Union League of Philadelphia, [email protected]. Stephen Ready is president and CEO of VCT, [email protected]. John Schultz, CCM, is general manager of Carmel Country Club, [email protected].