Tag: Club Management Association of Canada

In a recent study of the 4,000-plus private clubs in North America, GGA Partners™ found that almost nine in 10 clubs are full and experiencing significant wait-list growth. Certainly, the pandemic introduced by the novel coronavirus has brought unprecedented growth to private clubs. The question now is…how will clubs retain all of these members?

Here are three factors club leaders should monitor:

UNDERSTAND MARKET EVOLUTION
During the past several decades, four factors most consistently influenced demand for club memberships:

1. Favorable location, as most club members drive less than 18 minutes one-way to reach their club from their homes or offices.
2. Household income within the draw area of the club (the 18-minute reach).
3. Employment status among the market audience, as to its reliability and growth potential.
4. Educational attainment within the market area…more highly educated people are usually most capable of the financial requirements of membership.

The pandemic has blurred the historic lines as people have become less mobile and have found private clubs to be a safe haven for their families. Now, the market has evolved to maximize the influence of proximity; thus, proximity/location is of great significance. Current indications suggest that this reliance on clubs will endure as many professionals work remotely and have more time that was previously required for commuting to and from work.

Club leaders and operators must remain current regarding market conditions, requirements, and expectations.

MONITOR MEMBER SATISFACTION & ENGAGEMENT
Member satisfaction is the primary metric followed closely by engagement metrics. Knowing how engaged members are with the club is a simple measure of participation in special events, dining, new concepts, and programs. Survey members regularly using brief and to-the-point member satisfaction measures.

Alarm bells should sound when members are less engaged and enthusiastic about the club’s offerings.

WATCH FOR THE “CANARY IN THE COAL MINE”
Traditionally, a live canary was used to monitor air quality in the mine and would die if the air were not safe to breathe. The idiom suggests the importance of an early warning system for the club. Three dependable “canaries” for your club are:

Member Attrition – Most clubs have historic reference points for how many members are lost each year to mortality, relocation…life. In lean times, clubs struggled to sustain a balance between new members joining and those lost. Currently, more members want to join than wish to leave. Monitor the trendline as an early indicator.

New Member Leads Traffic – Current demand for new memberships is very strong. It will cool as society evolves past the pandemic. Club leaders should consider the flow of new inquiries – people who wish to join the club – as an early indication of market change. Each club should know its own successful conversion rate and understand that it must maintain leads in excess of attrition since some leads do not convert into full membership equivalents.

Consumer Confidence – Your club should make consumer confidence a part of each member survey using such simple questions as “are you confident for the club’s future” or net promoter metrics to track. The Conference Board is the source of the Consumer Confidence Index, which you can use as a broad indicator, and it does not replace the valuable guidance available from your own members.

Members are the lifeblood of private clubs. Recruiting and retaining them is the difference between success and failure.

GGA Partner Henry DeLozier penned this article for BoardRoom Briefs. It appeared in the June 22, 2024 edition.

“When the ox is in the ditch, there is much work to be done.” In most private clubs, the “ox” is a troubling or confounding situation that could – or should – have been avoided. Noted private club attorney, Robyn Nordin Stowell of the Spencer Fane LLP law offices admonishes clients who have not called before putting the ox into the ditch. “Clubs are so well managed and led these days that after-the-fact guidance should be unnecessary,” she says.

Want to keep the ox out of the ditch at your club? Attend to four practices that reduce risk and keep your club on solid ground.

1. Execute twice-per-year legal reviews with your club attorney.
Meet with your legal advisors to anticipate emerging challenges or issues on which the club and its servant leaders should be anticipatory; Among the concerns one should voice are:

• Board Minutes – In your review of our board meeting minutes, do you see any matters of concern or legal risk that should be corrected? Board minutes should be reviewed to minimize misstatements which could pose future risks to the club or its directors.
• Membership Program and Representations – Membership demand since the pandemic has filled most clubs still using membership documents that were created before CY 2020 when most clubs were aggressively seeking more members.
• Governance and Disciplinary Practices – The board should review its disciplinary practices to ensure that those practices conform to current standards of best practice…and state statutes.

2. Conduct an annual risk assessment with your property and casualty insurance provider.
One of the most rapidly increasing costs for most private clubs is property and casualty insurance…if you can obtain it. With rates increasing as a reflection of the overwhelming risks insurers are experiencing – whether wildfires, hurricanes, and tornadoes – in addition to the usual slip/fall risks, club leaders should evaluate risks with the understanding that most insurance premiums are a factor of annual club revenues adjusted (multiplied) by a risk factor that is established across business segments. Ask your insurance representative to conduct a risk assessment that may result in savings for the club – unless your club is not in safe operating condition.

3. Meet with the club’s auditor 90 days before the scheduled annual audit.
Many club leaders dread the annual audit. Embrace this independent, third-party review of the club’s books as an opportunity to improve operational results, which may reduce financial risks throughout the club. Your auditor sees many clubs and can provide financial benchmarks in addition to sound business advice.

4. Execute an annual evaluation of your club’s cyber security.
“The cyber battlefield never sleeps,” says Joseph Saracino, CEO of Cino Limited, which specializes in cyber security for private clubs. “In today’s world, many of us are sitting ducks, waiting to become the next cybercrime victims to be publicized by the media.” If an ounce of prevention is worth a pound of cure, take aggressive steps to ensure that the club’s members can rely upon a safe haven for themselves and their families.

Planning and acting ahead of the problem are a sure sign of effective servant leadership. Will you wait for the problem to put your club in the ditch or prevent the problem? Pretty easy choice when you think about it.

GGA Partner Henry DeLozier penned this article for BoardRoom Briefs. It appeared in the May 18, 2024 edition.