Tag: analysis

Know Your NPS to Build Brand Loyalty & Member Referrals

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In our work with clients across the globe, our research reveals that member referrals are the most important means of generating a steady stream of new prospects, which is probably not surprising.  After all, the cost is nominal and you can be assured that members are going to invite prospects with a shared passion for the lifestyle provided by your club.

The most effective method to gain member referrals is to ask for them. But before you do, it is critical to understand your NPS – or Net Promoter Score – to determine the response you will receive.

NPS is an extremely valuable market research metric that is widely used across industries and can be leveraged to measure customer perceptions of a brand and estimate future growth, as evidenced by the potential for repurchase or referral to other consumers.

NPS Is Not the Same as Member Satisfaction

Member NPS is not the same as your members’ overall satisfaction with their club experience.  NPS asks about the likelihood of recommending or referring the club to others while overall satisfaction asks about contentment with their experience.

In short, NPS is future-looking and overall satisfaction is backward-facing.

NPS Is Simple to Implement

NPS, originally a proprietary instrument used by Bain & Company, is now used by two-thirds of the Fortune 1000 companies as a basic measurement of customer sentiment.

The popularity and broad use of NPS is often attributed to its simplicity and transparency of use.  It is a survey question which asks, “How likely are you to recommend [brand, product, service, company, or organization] to a friend or associate?” The question is designed to provide responses which are easy to interpret and track over time in trend analysis.

NPS generates valuable customer insights and is typically used and interpreted as an indicator of customer loyalty.  This information is invaluable for business and community leaders who are responsible for measuring and managing revenue retention, customer retention, new business growth, or overall consumer satisfaction.

Despite the ubiquity of NPS among leading companies in major industries, the adoption and consistent application of this metric within the club industry remains limited.

A recent GGA Partners research survey of more than 500 club leaders (A Club Leader’s Perspective: Emerging Trends & Challenges) found that just 14% of clubs track member NPS in their surveys.  Among clubs that employ this metric, the average NPS is +64.  Additional feedback from the survey found that one-third of clubs reported an increase in their NPS during the pandemic, a positive statistic for future member growth.

Calculating Your NPS

The NPS question is asked on a scale ranging from 0 to 10, with 0 representing “Not at all likely” and 10 representing “Extremely likely”.  Based on the number selected, respondents are subdivided into one of three categories: those with ratings of 9 or 10 are classified as “Promoters”, those with ratings of 7 or 8 are marked as “Passives”, and those with ratings of 6 or less are categorized as “Detractors”.

The actual “score” is calculated by subtracting the portion of detractors from the portion of promoters without factoring in the portion of passives.  True NPS is always shown as an integer and not a percentage and, with the net score falling within a scale ranging from -100 to +100, it is possible to have a negative NPS.

Keys To Developing & Tracking Your NPS

1. Keep the NPS question consistent – Avoid altering the question (“How likely are you to recommend [your club] to a friend or associate?”) or the answer range (from 0 = “Not at all likely” to 10 = “Extremely likely”) as it will impact the validity and reliability of the data.

2. Ask for NPS alongside a handful of supporting questions – NPS is most valuable when supported by other overarching questions which generate datapoints on overall satisfaction, perceived value-for-money, and demographic questions (to stratify responses and dive deep into feedback by membership subsets).

3. Keep it brief – A survey with these three questions (NPS, overall satisfaction, value-for-money) and four or five demographic questions should take about 3-4 minutes for respondents to complete. Shorter is better for these types of surveys.

4. Measure NPS routinely – At a minimum, your NPS metrics should be tracked and updated annually to identify changes in the sentiments of your members. Whether they are rising or falling, understanding the factors impacting changes in your trend line will provide valuable insight into areas where the club is excelling as well as areas that need improvement.

If your club aims to be truly attentive to overall satisfaction, member loyalty, member and customer retention, or using member referrals to support membership growth, leaders of the club should be monitoring NPS as a matter of routine.  If this acronym isn’t surfacing in boardroom discussions, it should be.

While no one can predict the future, a clear understanding of your NPS will provide a data-driven indication of members’ loyalty to your club’s brand and the success you will have when asking your members for referrals.

Running Toward Change

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This article continues a series of communications from GGA Partners to help private club leaders address challenges confronting their businesses and their employees because of the global health crisis. Today, Henry DeLozier suggests that change on a massive scale is no longer something that should surprise us.

Technology’s tools give clubs a way to prepare for the new normal.

We’re hearing a lot these days about the “new normal” and how the coronavirus has forever changed the ways we work, shop, travel and interact.

But wasn’t it not long ago that we were talking about another new normal? Remember the new normal that followed the financial crisis of 2007-2008, which led to a global recession? That pivot from the previously abnormal to a new normal ushered in more stringent guidelines for financial institutions and in a much larger sense ushered out the sense of trust we had in many other institutions and the people who ran them.

And although the term was not yet in vogue, didn’t the seismic shift from analog to digital – the tipping point came in 2002, when the world began storing more information in digital than in analog format – qualify as a new normal?

All of which led some creative soul to design a bumper sticker that said it all: Change Happens. (You may remember it with a synonym for change.) The most adaptable among us learn to deal with change; the most successful turn it into a competitive advantage. How do they do it?

Don’t be surprised – be prepared.

When he first heard Bob Dylan’s 1965 anthem “Like a Rolling Stone,” Bruce Springsteen said, “[It] sounded like somebody’d kicked open the door to your mind.” With that song, Dylan changed how artists thought about making music. Major change often seems to arrive suddenly – with the speed of a stone rolling down a steep hill – and without warning. Its capriciousness makes us anxious. But if we know it’s coming, we shouldn’t be surprised. We should be prepared.

An embrace of the tools that technology now affords us is an important key to our preparation.

Derek Johnston, a partner in our firm, says although club leaders could not have anticipated the pandemic, they could have been better prepared.

“Many clubs were ill-prepared to quickly analyze the potential impacts of the coronavirus pandemic, to run initial scenarios, to easily gather more information, to test their hypotheses with their membership and, ultimately, set a course of action,” he says.

That is not to say that clubs have responded poorly. On the contrary, club leaders have performed in truly admirable fashion. Many clubs just had to work much harder than those that had already implemented data analytics processes and plug-and-play dashboarding tools, like MetricsFirst or continuous member feedback tools like MemberInsight.

“Some club leaders still question the need to bother with data analytics tools and programs. This misunderstanding is simply misguided,” Johnston says, adding that the term “analytics” seems to intimidate some and conjure visions of data overload and complexity. Another fallacy, Johnston says. “Data analytics, when executed properly, is intended to actually simplify information and present insights in very crisp, clean, and easy to understand ways.”

Ginni Rometty, executive chair of IBM, told Fortune magazine editor Alan Murray, “There is no doubt this [coronavirus] will speed up everyone’s transition to be a digital business.” She identified four areas of impending change: 1) the movement to the cloud; 2) the move toward automation; 3) the overhaul of supply chains, and 4) the movement toward new ways of doing work. Each force will happen in accelerated fashion, she predicts.

Rometty is not alone in her assessment. Almost two out of three respondents to a recent Fortune survey of Fortune 500 CEOs expect technological transformation to accelerate. Doug Merritt, CEO at Splunk, a big-data platform, pointed out two important observations: 1) a rapid digital transformation and 2) the elevated importance of gathering and interrogating data.

Top-performing clubs will similarly leverage the pandemic to implement advanced methods for executing work and providing services. Retooling such routine practices as monthly billings, guest policy tracking, and point-of-sale transactions will happen quickly. Likewise, separating work from jobs will trend even more in the wake of the pandemic.

“Clubs that are actively maintaining both real-time operating dashboards and strategic dashboards, combined with a proper financial model, are taking preemptive steps toward dealing with change,” Johnston says. “When it happens – and we know it will – they will experience far less conflict amongst their management team and their board. Ultimately, their preparation will enable better decisions, faster.”

Tactics for Financial Stewardship in a Crisis (Part 2)

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This article continues a series of communications from GGA Partners to help private club leaders address challenges confronting their businesses and their employees as a result of the global health crisis. Today, in the second of two articles discussing financial stewardship, partner and head of transaction advisory, Craig Johnston, outlines information and tactics which should be considered in developing your club’s financial plans in times of crisis.

As businesses across North America begin to re-open, ever-changing social and economic circumstances further complicate the decision-making process, and now more than ever it is imperative that business leaders have access to the critical information which impacts their business.

In the midst of a crisis, we believe prudent financial stewards should embark on a phased approach to financial planning and analysis. The three phases are:

1. Cash Preservation

2. Sustainability

3. Opportunity

The immediate focus should be on cash and cash preservation. The familiar adage Cash is King takes on even greater importance in crisis situations. Next, the focus shifts to reviewing key risks to long-term sustainability and developing plans to reduce and combat those risks. Once a game plan is understood for sustainability, business leaders should explore opportunities to enhance member experience, reduce operating or capital costs, and increase return on investment.

To navigate these three phases, two critical financial platforms are required: a detailed annual budget and a club financial model.

Often these platforms are considered one in the same, but they are not. A detailed annual budget should be designed on a monthly basis and based on agreed upon key performance indicators (KPIs) and specific circumstances for the year. A club financial model should be designed on an annual basis and based on historical and budgeted KPIs as well as other economic inputs. The monthly budget is important to support cash preservation analyses while the financial model supports long-term sustainability scrutiny and enhancement opportunity exploration.

Both platforms should be dynamic, both platforms should encompass all three financial statements, and both platforms are a must-have. By “dynamic”, we mean easily adjustable for various economic and club-specific KPIs and, by “all three”, we mean income statement, cash flow statement and balance sheet. (Yes, a club should set and approve a budget at the outset of every year, but that does not mean the platform it was developed under needs to be static.)

The information required to develop both platforms include:

  • Historical audited financial statements, including notes.
  • Detailed department financial schedules, including breakdown of fixed and variable expenses.
  • Membership information, including counts, fees, attrition rates and sales expectations.
  • Debt agreements and schedules, including covenant calculations, coupon rates and terms.
  • Labour contracts and employment agreements.
  • Supplier and vendor contracts and agreements, including terms and pricing.
  • Capital project listing, including historical expenditures, reserve studies and facilities plans.

The specific tactics under each phase of planning and analysis will vary from club to club, but some predominant examples include:

1. Cash Preservation

a. Analyze current club liquidity: evaluate the club’s current balance sheet, including available cash, receivables and payables based on an up-to-date budget, then leverage the monthly budgets to assess the near-term (three to six months) liquidity based on estimated revenues and expenses.

b. Scenario analysis: complete various scenario analysis within the annual budget platform (designed on a monthly basis) based on potential closure and re-opening scenarios. This requires a realistic evaluation of the impact of each scenario from department managers.

Based on the results of the above, determine if any near-term adjustments (staffing changes, discussions and negotiations with suppliers and lenders) are required for cash preservation.

2. Sustainability

a. Anticipate attrition rates: depending on the timing of annual dues payments, attrition rates during times of crisis can be significant. Running scenario analysis based on various levels of attrition and their impact on the club’s long-term sustainability is essential.

b. Estimate decline in membership sales: some clubs may rely on entrance fees to support operating expenses, or more predominantly capital maintenance expenditures. Evaluating the potential decline in new membership sales over the short and medium-term, and its impact on club sustainability is critical.

Based on the results of the scenario analyses, scrutinize the club’s operating model to address discrepancies between cash inflows and cash outflows. This may require moderate or significant reductions to the club’s operating profile, including hours of operation and levels of high-touch service, for example.

3. Opportunity

The review of enhancement opportunities may come about during the focus on sustainability, as the club looks at unique ways to better align cash outflows with cash inflows. However, for clubs where sustainability is straightforwardly achievable, the focus on opportunity will follow sustainability. Areas of opportunity include:

a. Staffing profile: use times of disruption to consider changes to your management team and right sizing of your staffing profile.

b. Debt re-structuring: meet with the club’s lender(s) to discuss revised terms to the current debt agreements. Interest rates are near all-time lows, and although the numerator on certain coverage ratio calculations has declined, a preferable rate or term may be available.

c. Capital projects: favorable prices may be available on large-scale projects or purchases during times of crises. Consider moving ahead with large-scale projects if the potential savings are meaningful and there is a high degree of confidence in the club’s financial sustainability.

Navigating through crisis in this phased approach – while adhering to the guiding principles of financial stewardship – will help clubs develop financial plans which offer short-term solutions and lasting success.

Avoiding a Category Overload

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When was the last time you conducted a thorough review into your membership categories?

GGA’s Bennett DeLozier explains how a streamlining process can help to slim down the number of categories and keep them relevant in today’s marketplace.

“Confusion and clutter are failures of design, not attributes of information” – Edward Tufte

Across North America and Europe a competitive landscape for membership has emerged, with more leisure pursuits competing with one another than ever.

Naturally, club leaders across the world are not sitting back and watching the evolution of customer needs and wants without acting. But while a great deal of this action is well-placed – from the introduction of intermediate and family memberships in North America to flexible membership schemes in Europe – in other instances it is leading to an uninformed inflation of membership categories, creating confusion for customers and an administrative headache for club leaders.

A trail of memberships

It is common for categories to emerge at a particular point in time, often as a reaction to an event, as an attempt to appease a vocal minority, or in an effort to attract a specific new member cohort.

Many clubs react to changes in the market by adding or creating a new membership category to appeal to specific segments. When structured properly, this can be an effective way to cast a wider net and appeal to different audiences. However, when this happens in an unstructured way over a number of years, a club may end up administering upwards of 15 to 20 categories at a time.

More categories mean more discounting, different access, and different privileges. Membership samples per category get smaller, and it becomes too much to administer and too confusing for existing and prospective members alike.

Top-performing clubs have fewer membership categories, largely because they enjoy demand such that members are attracted to them versus the other way around. For others, what should be a set of simple, straightforward membership categories becomes a patchwork quilt, absent of any tangible strategy or current solution to underpin its creation.

Naturally, tackling this issue has its challenges. How do you begin to evaluate and streamline so many categories? How do you negotiate shifting members from one category to another?

Streamlining your categories

Current market intelligence and supporting research is essential to guide this process. Once you understand the current market circumstances and positioning of your club, you can identify where membership categories may need to be realigned to attract future members.

The key is to study internal membership utilization rigorously so you can understand where your club has the capacity to grow. The adjustment of existing categories or development of new ones should be based on creating access and privileges in areas where the club has room to grow, not necessarily where prospective members desire it.

To illustrate the importance of proportionate categories, think about one which has emerged in recent years particularly: the intermediate or young professional category.

Typically offered to those between the ages of 25-35 (with a great deal of variance depending on the club and location), its origins are rooted in the issue of affordability both in dues and initiation fees. This has given way to lower dues, waived initiation fees, or a tiered system based on a particular age bracket.

While the introduction of such a category has been, in most cases, an appropriate tactic, it is one in need of constant analysis. As young intermediate members age into their mid-thirties their lifestyles begin to evolve, so does what they need, want and expect from their club experience.

This poses a challenge to clubs: do you change the existing intermediate category or create a new one to meet evolving demands?

The answer comes back to robust intelligence – intelligence which enables club leaders to get ahead of this challenge long before it makes its way to the doorstep. Intelligence allows you to measure and monitor utilization, enabling category adjustments which match lifestyle changes and market trends.

Moving members

Whether you’re dealing with category overload, wrangling legacy categories that you are looking to streamline, or have members moving up an age category where there are implications to their dues or privileges, at a certain point in time it is necessary to change.

But it’s difficult to change members from one category to another.

Legacy categories can be contentious, as members are unlikely to welcome category change – especially if this means an increase in dues. Club leaders should enter the process with the primary aim of growing where the club has the capacity to grow and a secondary aim of establishing a fair playing field across the membership base.

The best practice approach is to identify categories that have become irrelevant and essentially ‘grandfather’ those members into new categories which fit the room-to-grow bill, allowing them the opportunity to transition into new categories under advantageous terms.

If we look back to our young professional categories, when the time comes for them to move up the ranks to full membership, invest time and attention into the process. Why? Because these members have reached a pinch point, a ‘fight or flight’ moment in their membership tenure. If they decide to progress through to full membership now, the likelihood that they will stay for the long-term increases substantially.

Communicating your product

Before communicating your streamlined categories, club leaders should have answers to the following: Are the current categories relevant? Are they performing financially? Are category offerings causing issues with facility accessibility or compaction of activities? How do they situate within the local market and relative to competitor offerings? What benefits will category changes provide existing members? What benefits will they provide the club?

Once in position to communicate the changes internally, preempt what members will think. The primary concern for them will be, naturally, “How does this impact me?”. But the club’s agenda should also form part of the equation. Communicate how the changes will make the club more attractive to future generations and how they will support the club’s financial sustainability. Although it may feel self-serving, it will help to mitigate any ill-feeling among members by giving clarity and a sense of purpose to the changes.

For the change itself, successful clubs provide the option to transition into a new category that has similar access under favorable terms (such as a lateral move into a new category at no cost; or, upgrading to a higher privilege category at a lower incremental entrance fee compared to that of a new member off the street).

Externally, the focus should be on competitive advantage through value. It’s easy to compete with local competitors on price, but it’s not necessarily advantageous to the club. The best clubs look at ways to establish their competitive advantages by adding new programming and subtle category elements that make the value proposition more attractive. Injecting value is preferable to cutting costs.

Clarity over confusion

A proactive and streamlined approach to membership categories has much to offer: an easy-to-manage administrative process and clarity for existing members, prospective members and the Board.

A review of your membership categories also offers the opportunity to view each through the lens of the future and under the guidance of current research. With membership dues representing a hugely significant revenue component for any club, this process is time well spent.

For guidance on how to revise your club’s membership categories, connect with
Bennett DeLozier.

Why You Need More than One Member Survey

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Member satisfaction surveys are a rich source of data and intelligence for measuring year-on-year club performance, but fall short of accounting for the changing face of members’ needs and expectations. GGA’s Michael Gregory explains the need for a different type of survey, and the questions you be should be posing to your members.

Why is it that member satisfaction surveys are not an effective mechanism to capture everything that members need, want and expect?

By definition, the primary objective of a member satisfaction survey is exactly that: to measure member satisfaction.

Straying from an accepted format or structure without providing the necessary context may lead to a drop off in engagement levels. So, while you can potentially look to feed in additional questions to source particular information or data from your members, the key is to be relevant.

The advantage of a survey for any given situation is the club’s ability to gauge members’ feelings or attitudes on that specific topic or project. If the board is considering a capital project – a new clubhouse for instance – a dedicated survey would represent an effective way of obtaining some invaluable insights, as well as learning whether members could tolerate increases to dues in order to accommodate this, and support for other methods of funding.

Can members get ‘survey fatigue’? If so, how can you avoid this situation to ensure you capture reliable, insightful data?

Undoubtedly. Times have changed and we have witnessed first-hand how the willingness of members to devote significant time to surveys is decreasing.

Around 10 years ago, it was entirely possible to carry out a combined satisfaction and strategic survey of members which could take up to 45 minutes to complete. With changes to device use and attention span, new tactics have emerged to overcome the possibility of survey fatigue, including:

  • Different types of surveys – from shorter, pulse surveys to more immersive, philosophical, and strategic surveys. Providing each is structured to capture the interest and engagement of members, this will mitigate any possibility of an attention ‘drop off’.
  • Segmentation – not all surveys will require input from all members. So, providing you involve an appropriate cross section for a given survey, this will ensure you’re not asking too much of too many members all at once.
  • Accessibility – by making all options available to your members in terms of how they can complete a survey (cell phone, tablet device, desktop or hard copy), you allow them to make a choice in which way they find most comfortable, convenient and quick.

Finding the right survey approach demonstrates to your membership that their opinion matters, you are open to change, and that the club wishes to maximize its relevance to the majority of members. Crucially, it eliminates the possibility of a reactive ‘culture creep’ where decisions are made on the basis of vocal minority opinion rather than how they should be made – through data-driven decision making.

When’s the optimum time to be running member survey(s)?

This is really determined by the need and seasonality for each club. Some surveys will be linked to time-defined events (such as those focused towards capital projects), so would need to happen within a given window.

If a club is looking at a strategic or attitudinal survey then the timing is somewhat less critical – though the off-season can be a good time to survey members on these topics.

Things are more certain when it comes to surveying members on how satisfied they are. Our research and data in this area points to the period following the peak season as the optimum time to question members about their year-on-year sentiments towards the club, and there are some key reasons for this:

  • Members have just experienced the club in its best light – so they are more likely to be engaged, positive, but also practical and pragmatic in their assessment and recommendations.
  • A maximum number of members are utilizing the club – with the seasonal nature of a number of clubs, members can often go into hibernation during the off-season. So, surveying these individuals at a time when the club is far from their mind and everyday life is unlikely to provide qualitative data and insights. Conversely, questioning members when the club is a highly relevant part of their day-to-day life will ensure everyone’s voice is heard.

How do you interpret the findings and how (much) should they help to inform wider strategic club intentions?

Asking the right questions is only part of the process. Much of my work involves spending a great deal of time interpreting results by looking at the key drivers and mapping these against various demographic filters; this reveals differences of opinion between various groups such as men and women, newer and longer-tenured members, younger and more senior members, and various other categories. All helping to fuel the right future strategy for the club.

However, this process can be more complex than what it seems.

Take, for example, a case where the food and beverage operation is the lowest rated component of the services, amenities and activities available to members. The natural inclination would be to hone in on this area as one requiring action and improvement. But this is where key drivers come in. What really drives the satisfaction of members? Which areas are they most sensitive to? And therefore, where should your focus lie (not always the lowest-ranked component)?

Once these key drivers are determined they can prompt specific strategic action, or, in cases where more information is needed, spin off surveys. Understanding the key factors that are driving member satisfaction helps to interpret survey results in an aggregate context, one in which outputs on specific questions are considered relative to others in order to help the club prioritize areas of focus and support justifications for doing so.

What have you observed from clubs who do/don’t take a keen interest in finding out more about the needs and wants of their members?

Making operational and strategic decisions based on perception or the opinions of a vocal minority is one of the greatest risks a club can face.

The club that makes it a priority to obtain feedback from its members has a solid understanding of the factors that caused its members to join, an annual measure of current performance relative to expectations, understands the key drivers of satisfaction, and has a clear notion of its members’ hopes and goals for the club.

More than that, by taking an active interest in the opinions of its members, the club takes them on a journey and demonstrates trust, transparency, and the benefits of data driven decision-making along the way.

In cases where the vocal minority come forward with points of dissatisfaction, the robust data at the hands of managers creates a credible sense of authority when engaging in dialogue.

Any final thoughts to add?

In any member survey, communication and transparency are key. Start your process with focus groups – this helps generate buy-in and trust in the process, and also shows you are (literally) willing to listen to the opinions of members.

Once you have embarked on the process, keep members informed about the next stages and the reasons behind conducting a survey. It’s highly likely they will speak with one another about the process and the details of any survey, so regular club communication will ensure there’s no room for misinterpretation or myths arising.

The final, and arguably the most important consideration, is confidentiality. Members should embark on a survey in the knowledge that their individual responses will be securely held by an independent third party. This affords them the opportunity to respond candidly and feel comfortable enough to air out dissenting opinions, frustrations, and constructive criticisms that may bring to light or reinforce issues which otherwise may not be shared.

Crucially, this arms club leaders with the authentic, informative feedback they need to be effective strategists.

This article was authored by GGA Senior Manager and Market Intelligence expert Michael Gregory.

Partnership Promises Leading Edge Analytics For Clubs

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MetricsFirst and GGA partner to provide leading edge data analytics to the club industry.

TORONTO, Ontario – MetricsFirst and Global Golf Advisors (“GGA”) are pleased to announce the formation of a strategic partnership to provide leading edge data analytics to the club industry.

The MetricsFirst technology platform, combined with GGA’s deep analytical expertise will provide clubs around the world with seamless, real-time dashboard reporting and diagnostic and predictive analysis tailored to the specific needs of every key decision maker.

“We are excited to partner with Global Golf Advisors and offer MetricsFirst within our industry, assisting clubs with retrieving, analyzing, and taking proactive action based on the information that exists within multiple systems they are utilizing. We are providing the ability for clubs to make important strategic decisions through the data and metrics provided by MetricsFirst,” said Joe Oswald Chief Operating Officer at Jonas.

“GGA has provided data driven insights to the club industry for over 25 years. During that time period, we have been fortunate to help some of the world’s top clubs develop and implement a game plan for success – one that is informed and supported by business intelligence and data analytics,” explained GGA Partner, Derek Johnston. “We are thrilled to partner with the MetricsFirst team to translate GGA’s proven approach to analyzing club performance into an affordable, real-time data analytics platform.”

Derek Johnston added, “We view this partnership as a strategic pillar in our quest to continuously improve the tools and solutions we offer our clients.”

For more information on MetricsFirst please visit www.metricsfirst.com

For more information on GGA please visit www.globalgolfadvisors.com

Media Contact:
Vache Hagopian
Managing Director of MetricsFirst
Vache.Hagopian@jonasclub.com

Strategic Intelligence at Work

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Guest author – Lonnie Lister, General Manager, Portland Golf Club

Lonnie Lister attended the University of Arizona for a degree in music education.  He worked on the wait staff at private clubs during his college summers and found that he was drawn more to club management than to a music career. Prior to joining PGC as its GM in January 2017, Lonnie was the GM at Skyline Country Club in Tucson, AZ where he spent 23 years working in various areas of the Club. Lonnie is active in CMAA and has served on the board of the Greater Southwest Chapter.

Portland Golf Club has a rich history, but like other private clubs it faces ongoing challenges.

The city of Portland has grown tremendously over the last decade, leading to dramatic shifts in both the market and demographics.

While this growth brings opportunity, it also brings about change.  For us that change impacts a number of areas – specifically around membership recruitment and retention; staff hiring and retention, and being able to control operating costs without compromising the service we provide to members.

With this in mind, the board of Portland Golf Club voted last year to adopt GGA’s Strategic Intelligence (“SI”) platform, which features several components: a Market Scan, a Member Survey, and an assessment of the Club’s “Operational Vital Signs” which compares our performance to clubs of similar stature both within our market and in other markets.

Selective targeting

The initial Market Scan, which revealed potential member households within a two to five-mile radius of the Club, was fascinating.  We learned that within a five-mile radius of Portland Golf Club there are more than double the number of golfing households than is typical for private clubs nationally.  That was a welcome surprise.

Though our Club is still very selective, the Market Scan revealed that there was much more potential for outreach than we’d been aware of before.

As membership recruitment and retention was our number one issue, what we learned inspired us to send a “welcome letter” from the Club to home buyers in our prime market neighborhoods.  This was not a recruitment package, but rather a gently informational welcome note – letting people who might be new to Portland know that this wonderful club exists nearby.

Taking the time to listen

As a club manager, one can often find themselves guilty of favoring (or at least focusing on) one ‘R’ over the other – namely, recruitment over retention.

But retention can fuel recruitment.

A Member Survey can inform what changes are necessary based on the actual needs that current members identify, which is vastly more effective.  And the satisfaction and sense of positivity this can create reverberates beyond the four walls of the clubhouse.

What was critical for us was surveying our membership in a way that was specific to the Club, not just a broad-brush approach.  This meant we could directly address concerns of our membership and maximize the effectiveness and insights of the survey.  Already this has delivered responses that are candid and honest, and provided a robust foundation to inform strategic decisions.

Reassuring the Board

The SI platform has also been incredibly helpful in reassuring the Board that the Club is operating efficiently.

We can see in the Operational Vital Signs report that in almost every measure Portland Golf Club is performing well.  Where we find anomalies, we can take a closer look to understand what these are, and we can then decide if they are something we need to act upon or factor into our strategic decisions.

One such anomaly we found at Portland Golf Club was that most golfers prefer to walk, explaining why our cart revenue is below national benchmarks.  This is not a trend we see changing, so rather than acquire more carts or attempt to upsell them at every opportunity, we decided to focus our efforts in other, more fertile areas for business development.

Going deeper

There’s no doubt Portland Golf Club has embarked on a journey which places strategic intelligence at the forefront of the decisions we make.

Now we are in the second year of our SI subscription and have engaged in a Market Analysis to take a deeper look into what we learned from the original Market Scan.

As analysis looks at trends, rather than simply a snapshot of the market, this will allow us to plan better in what is clearly a fast-changing region.

Portland’s metro region now numbers more than 2.4 million people.  Almost 50% of the adult population has a college degree, and in Portland Golf Club’s primary market areas that percentage is even higher.

Armed with this knowledge, we can embark on our membership recruitment and retention activity with a clear sense of who our prospective customers are and where they are situated in relation to the Club.

Empowering the manager

Given my history working in a number of different roles in the club environment, I have always felt very comfortable on the operational side of the business.  However, the three most important issues we face at Portland Golf Club are all byproducts of local market growth outside of our Club’s operations.

Strategic research is providing us with data and insights we need to address each of these issues and is helping the Club in both the short and long-term.

This journey is changing the way I think and the way our team strategizes.  It provides me with more data than I have ever had available to me at other clubs and is full of relevant information that we depend on daily.  Our management team and committees routinely refer to the intelligence reports, our budgeting process benefits from the availability of current data to support assumptions, and our Board meetings are more productive and efficient.

I now feel that there is a greater connection between the service we deliver on the ground to the level and breadth of service prospective members are looking for – because we are armed with the data and knowledge to have confidence to be more aware of market needs.

Moving forward

So, where do we go from here?  Whereas before we were a Club reacting to changes and adjusting plans for the following year, now we are a club looking 2, 3, 4, even 10 years into the future.

For a time, it felt as though the city of Portland’s growth was getting away from us.  Now, we are ready for how it will develop and who will move here, giving us the ability to refine the value proposition that this Club offers them both now and well into the future.

Learn more about Strategic Intelligence here. 

Strategic Intelligence Overview: Part 2 of 3

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Clubs are beginning to discover the power of utilizing data to operate more strategically (see “Strategic Intelligence Part One,” September 2018). While enterprise grade analytics platforms that help to consistently track and analyze data may still be out of reach for many clubs, Derek Johnston of Global Golf Advisors says there are steps clubs can take now to lead to better decision making. He recommends club managers start with straight forward objectives for using and analyzing data:

  1. Inform key decision makers at your club with customized, accurate, timely and actionable intelligence about your club’s membership, market, operations and finances.
  2. Improve productivity and effectiveness of board and management meetings with sophisticated and reliable business intelligence.
  3. Help club executives efficiently and effectively evaluate, develop and adjust strategy on an on-going basis.

In order to effectively collect, analyze and present the right information to the right audiences, Johnston suggests you look at your club’s strategic plan and overall club goals to identify the key questions you need to answer first. For example: If your goal is to increase intermediate membership conversion rates and build a larger pipeline, some of the things you would likely want to know are:

  • Conversion rates of intermediate membership over the past five years.
  • Number of prospects in your pipeline in the past five years and how many are in it currently.
  • Reasons intermediate members have and have not converted in the past.
  • Preferences and attitudes toward the club of those who have converted to full membership in the past.
  • The size and make-up of their personal networks and their willingness to recommend the club.

“If you could gather all of this information, track it and trend it over time, you could come up with a pretty good action plan to achieve your goal,” explained Johnston. “Work through this exercise for each of the most important categories of strategic intelligence: governance, membership, market, utilization and participation, employees, operations, capital and finance.”

Once you know the information that you need to frame your decisions, then you can begin to source the information from both internal (POS, member database, P&L) and external sources (population demographics and psychographics, real estate data, social media, web traffic, etc.). When you have the necessary data, you can analyze it in a way that considers your club’s unique circumstances, visualize the information in a manner that provides historical context and trends, and then determine the best approach for presenting the information to the various decision makers at your club.

Stay tuned for Strategic Intelligence Part Three in the next issue which will address examples and the key results of clubs that have leveraged data to achieve a desirable outcome.

This article was authored by GGA Partner Derek Johnston for the Private Club Advisor.

Strategic Intelligence Overview: Part 1 of 3

Date:

As the world becomes more data centric, the club industry is beginning to discover the power of utilizing data, research and analysis to operate more intelligently and strategically. According to Derek Johnston of Global Golf Advisors, informed intelligence planning increases the likelihood of current and future success.

The biggest challenges clubs face in their quest for better strategy is how to source and analyze the data and then apply that intelligence to determine future action. Comprehensive business intelligence is extremely important for clubs, especially those where boards are comprised of volunteer members with varying backgrounds and professional experience. “Everyone must be working from the same set of facts when discussing and ultimately setting strategy,” Johnston said.

Business intelligence is often new to clubs and tends to be misunderstood. “Simply put, you want to use information to help determine what has happened and why,” he explained. Using data to derive insight that helps with decision making is most impactful when 1) internal and external data from multiple sources is synthesized, 2) combined with experience and key business assumptions and 3) enabled by technology in order to identify unique insight.

“This means that relying on financial information or data from your club’s information system is not enough. It will not provide the specifics needed to develop the most successful strategy for your club,” Johnston warned.

Global Golf Advisors believes business intelligence requires a 360-degree view of all the factors impacting a club’s success from competitive market forces to member perceptions to operational and financial performance evaluations. It should also be defined based on who will be using it and the reason for which they will be using the information. Global Golf Advisors warns that anecdotal information in a board room is distracting and disastrous.

“Develop a strategy that supports both operational and strategic decision making that goes beyond typical financial data and key performance indicators. The top performing clubs around the world are consistently tracking, analyzing and reporting data to leverage intelligence and create competitive advantages,” Johnston concluded.

Stay tuned for Strategic Intelligence Part Two in our next issue which will address how to implement key practices to establish a strategic intelligence process at your club.

This article was authored by GGA Partner Derek Johnston for the Private Club Advisor.

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