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Business and Marketing for Club Success

Simple Business Goal: Providing and marketing a high-quality club product that members value, join and use so revenues exceed expenses and club success is achieved.

The balancing act is determining what to provide and at what quality level so members value and buy into the club’s offering. Clubs have fixed costs that get ingrained into their DNA. A club in one area of the country can have dues of $800/month while dues at another might be $500/month. Why the variance? That $800/month club might actually be the better value club. It is important for every club to understand its marketplace and the financial position of its members. Each club must evaluate its offerings and quality to provide the value needed to attract sufficient new members.

The majority of private clubs today are operated as nonprofit organizations. That is, their primary goals are related to providing members with the best possible club experience they can afford. A breakeven financial model is not only acceptable—it is the goal. For-profit entities are the opposite. While they always try to please their customers, the primary goal is to make a profit.

Profit is not a bad word, and in fact our capitalistic society is rooted in this objective. So our typical private club operation must serve two masters:

• Making what might be termed a profit on certain aspects of its offerings to cover the deficits on other offerings.

• Placing a high priority on achieving highly satisfied members, rather than generating a net profit.

Fortunately, many clubs are able to rely on significant levels of dues revenue to support otherwise unsustainable levels of expenses. But the ultimate goal is to financially break even with members just loving their club.


It is interesting to look at the business models of private clubs. There are very small clubs with a few hundred members that offer a very focused club offering, such as just golf or dining. If this type of club serves a very wealthy membership, it can charge dues at any level as long as the quality is maintained and the membership supports it. Then there is the contrasting small membership club offering very limited services, e.g., boating, with member volunteerism helping to keep costs down. Both models can work, but the latter one is more difficult to maintain in today’s world.

Large Membership Model

A highly successful private club model is one with a large membership—say more than 1,000 member families—with significant dues revenue that can afford to provide many more club offerings at very high quality level. Boca West Country Club is a great example.

This is a result of the stronger purchasing power of the larger group of members. McMahon’s survey research suggests that the larger the club’s membership, the higher overall satisfaction members have with their club. Increasing membership size offers one of the best ways to enhance a club’s business success. As an example, Bellerive Country Club just increased its membership cap for full members because, despite having an excellent golf offering, golf rounds were down 10 percent. So there was room for more members. With the additional members, who were on a waiting list, the club increased its resources to provide all members an even better club experience.

Lower Fees to Attract Members Model

Another business strategy sometimes adopted by clubs, especially after the Great Recession, involves lowering fees to attract new members. Some clubs made drastic cuts to their initiation fees in recent years to attract additional members. Many of these clubs are now stuck with the lower initiation fees, which has required capital dues being initiated to fund ongoing maintenance and repairs. Such annual maintenance costs can run in the $500,000 to $700,000 range. Clubs that did not lower their initiation fees did not have to add capital dues and today continue to receive full initiation fees from new members. Many are now back to pre-recession initiation fee revenue. In contrast, clubs that lowered their upfront fees are finding it very difficult to raise them back to previous levels.

During the recession, some clubs also lowered their operating dues in order to survive. This business strategy is fraught with disaster as dues are the lifeblood to support clubs and increasing them back to earlier levels is extremely difficult, if not impossible.


First and foremost, club success derives from having many “very satisfied” members who feel they receive high value from their club experience. It is not so much what a club costs as it is how well it serves its members. A club with high dues may provide much more member value than a club with low dues. Some common business practices for successful clubs are:

• Recognizing that high quality is far more important than low cost.

• Having the best possible staff and retaining them.

• Offering facilities and services that serve all members and their families at a high quality level.

• Allowing management to function without special interest groups interfering. Clubs are a big business with millions of dollars of revenue. Boards should delegate to the club’s management the responsibility for handling operational issues and not cause havoc in implementing club business plans.

• Major capital improvement programs are completed on ten-year cycles—e.g., New Orleans Country Club—so they never fall behind in facility quality. Typically, a clubhouse renovation to dining areas results in 20 to 30 percent more dining usage from the same membership size.

• Offering well-maintained facilities, with continual reinvestment in them by way of sound financial models.


In today’s world of commerce, everything seems to be focused on marketing the product. Private clubs are no different, but the way clubs are marketed can vary widely from club to club. Clubs need two marketing plans to get existing members to use the club, as well as to attract new members to join the club.

Marketing to Existing Members

The goal here is to increase member usage of their club. To accomplish this a club must first know how members and their families (otherwise known as customers) feel about the quality of the club’s offerings. No amount of marketing will be of much value if the basic product is viewed as poor. The most effective way to learn how members view their club experience is through membership research such as focus groups or surveys. If problems in member satisfaction are discovered with the primary club offerings (dining, golf, fitness, facilities, year-round activities), the board and management must address them.

The goal for every club should be to have at least 90 percent of all members feel satisfied with their club experience, and at least half of this 90 percent should be rating their overall experience as “very satisfied.” If a club achieves this satisfaction level, it is delivering a high quality product. Then the challenge becomes how such a club communicates to its members in a way that gets them to the club. The need for repetitive, timely reminders to members is critical and communications need to be coordinated and managed. Also, target-specific user groups result in more successful communications.

McMahon’s research has found that the most effective types of communication are the e-mail blast, followed by the club website. The website, in particular, is a versatile and increasingly important medium for reaching prospects as well as existing members. Social media, such as Facebook and Twitter, can also help meet the needs of club members and engage them through two-way communication.

With a good club product and a good communications program, clubs can realize more member usage.


All clubs must continually attract new members to make up for normal attrition, which can range from five to 15 percent per year. Different clubs have different objectives for both membership replacement and growth. In order to ensure that standards of privacy are maintained, clubs should be selective regarding who joins—meaning no open door policy. The Great Recession had a significant impact on membership admissions. Some clubs that were highly selective in admitting new members welcomed candidates more easily, potentially bringing in less compatible members.

One key to success in attracting new members is having the majority of existing members “very satisfied” with their overall club experience. This is because a “very satisfied” existing member is much more likely to sponsor a new member than an unhappy existing member. Assuming a well-maintained, attractive club with many “very satisfied” members, marketing for new members becomes the critical factor for success. Here are a few important ideas and practices:

• Creating awareness among existing members that the club wants and/or needs new members. This can be done in subtle ways. An interesting approach used by one city club was to send out an explanation of the membership admissions process to all members with admission forms because so many members were asking about it.

• Simplifying the admission process so it is not so onerous that no one will sponsor new members. Make it easy for members to invite their friends to join.

• Creating new member marketing committees for various membership categories such as juniors, social, golf, etc., so a club can target smaller groups more effectively. It’s important to get the right people inviting prospective members to the club.

• Having an experienced membership director who coordinates all aspects of marketing and admissions.

• Encouraging newer, younger members to propose new members. They know the next generation of members.

• Having a member-friendly admissions process. An overly protective Membership Committee can discourage existing members from proposing new members. Time after time we hear well-respected members say, “I will not be embarrassed again by having a good friend turned down for membership.”

The business and marketing of private clubs is very much dependent on the economic conditions of the society it serves. In good times, there are full memberships, good club usage and happy members. It is in the economic dips that the true mettle of a management team is tested, as costs must be controlled and marketing efforts stepped up. Having survived the Great Recession, clubs are now rebuilding physically, fiscally and in greater member numbers. It is a good time to be in the club business!