Through the difficulties of the recent economic recession, and into today’s world of tenuous economic recovery, club membership has relied heavily on our nation’s top-earners for their loyalty. Now, several studies suggest the number of high-income families is rising rapidly, along with their incomes.
Analyzing current Census data, the Pew Research Center notes, “During the first two years of the nation’s economic recovery, the mean net worth of households in the upper 7 percent of the wealth distribution rose by an estimated 28 percent.” Of such high-earning households, Forbes.com reports that this population is projected to increase by 50 percent in the next decade.”
How can your club ensure the continued engagement of this important membership base? An April 2013 MediaPost survey on luxury, the Mendelsohn Affluent Barometer, has outlined directives for those who wish to capitalize on the rise of high-end earners and their rising earnings. Adapting those imperatives for the private club industry, here are five key considerations for attracting affluent members to your club:
1) Keep Your Club’s Value Clear
In today’s world of mass communication, we are conditioned to process messages at a head-spinning rate. As a result, a certain image or message can become just as valuable as a tangible benefit.
According to one survey respondent, “Luxury is more of a commercial idea than an actual product feature now. Luxury used to refer to a product’s quality. Now it’s just an image.” Even in the context of a club brand, it’s critical that the high quality of benefits be made transparent.
That doesn’t mean that benefits should only appear to hold value. Clubs must deliver on their claim to quality by providing top-tier service and amenities, maintaining excellent club facilities, and making service processes transparent, and otherwise validating the value of the member experience.
2) Sustain Dues Levels
MediaPost’s research has shown that the desire for luxury goods and services has gone up, while the idea that quality carries a high price tag has diminished. This insight dismisses the traditional association of excellence with excessive costs.
Facing that trend, as well as ever-increasing competition for members’ discretionary spending, clubs may be tempted to attract club-goers by lowering dues rates or otherwise reducing membership expenses. However, by offering the same membership experience for a decreased cost, the club runs the risk of degrading its brand image.
Instead, clubs should guard their image, as well as their margins, by maintaining cost levels for membership while utilizing alternative avenues for encouraging club loyalty, such as communicating the club’s quality in a clear way (as described above) and appealing to the members’ emotional engagement to the club.
3) Convey a One-of-a-Kind Experience
For the nation’s highest earners, who can afford nearly everything at their fingertips, it’s what lies beyond their fingertips that they value most. Survey results indicate that affluent Americans are becoming more likely to associate quality with terms such as “rare” and “unique” than they are with terms such as “exclusive” or “privileged.”
Every club has a special history and tradition, yet a truly matchless membership experience involves every facet of the club, from the décor, to event programming to the hospitality of club staff. Importantly, the club must also be sure to keep its uniqueness top-of-mind through its marketing and club communications.
4) Provide Benefits with Multiple Levels
With technology such as smartphones and web platforms pervading our culture, we have become accustomed to single sources providing combinations of distinct functional benefits. Such multilayered benefits offer truly unique value, sometimes specific to a single individual.
As more and more affluent club members seek an unparalleled membership experience, clubs must be prepared to meet that need by building upon past expectations and not just changing or replacing them. This may include such considerations as adding more customization to dining menus, upgrading fitness amenities and technology to increase functionality, or adding more educational events to your club calendar.
5) Keep Younger Club Members in Mind
Not only are we seeing shifts in how high-earners spend their money, but also a shift toward younger generations holding on to that money. MediaPost survey findings warn, “the next generation brings a distinctly different approach to luxury, and to brands more generally.”
Clubs should take note of the trending tastes brought on by this generational change, which include a preference for less formality and the mixture of high-end and low-end benefits. In order to attract younger, affluent members, clubs must be willing to engage those tastes, such as through social media technology or by adapting club policies.
It remains to be seen what considerations will sway high-earners, both young and old, as the nation’s culture and economy continue to change. In catering to this loyal membership group, clubs must continue to keep a close eye on financial and societal trends as they emerge, and respond to them strategically.
Curtis Rogers is NCA’s marketing communications assistant manager.