3 Steps for Successful Member Retention

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.

4 Priorities for Private Club Boards

“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.

3 Keys to Consensus Based Strategy Planning

Private clubs operate within a unique ecosystem where member satisfaction, financial sustainability, and strategic foresight intersect. To navigate this complex landscape successfully, effective planning requires a consensus-based approach to strategy development.

Consensus-based strategic planning in private clubs requires club leaders to develop strategic plans that align the goals of multiple stakeholders, including members, employees, management, boards and committees. It emphasizes collaboration, communication, and shared decision-making processes to ensure that the strategic direction of the club reflects the collective interests and priorities of all involved parties. This approach fosters a sense of ownership, engagement, and commitment among stakeholders, leading to more effective implementation and sustainable success for the club.

The development process involves synthesizing member feedback, conducting comprehensive research, collaborating with experts, and ensuring financial viability. Here’s how these elements come together to form a robust strategic framework.

Informed Member Feedback: At the heart of every successful club strategy lies the voice of its members. However, gathering member feedback is not merely about soliciting opinions but rather about structuring the feedback process strategically and with a sound research methodology. Members who are in essence the customers of private clubs, are unique in two distinct ways: First, many are also owners, with a vested interest in the club’s success beyond the member experience. Second, they often don’t want the club to operate strictly like a business in certain aspects, as members typically prioritize experiences over financial performance. Considering these factors, it is essential to design surveys and engagement platforms that prompt members to prioritize their preferences and consider trade-offs. While member input is vital, it is just one data point to be considered alongside research and industry expertise.

Comprehensive Research: Comprehensive research is essential for private clubs to develop a robust strategic plan. This involves analyzing internal dynamics like membership demographics, financial performance, and member satisfaction, alongside benchmarking against peers and industry standards. Understanding market trends and using dynamic financial models for scenario analysis adds depth, helping clubs anticipate shifts and make informed decisions. This research-driven approach not only optimizes resources and enhances member experiences but also forms the foundation for consensus-based strategy, aligning stakeholders and ensuring strategic alignment.

Expert Collaboration and Maintaining Impartiality: Developing a consensus-based strategy requires collaboration among experts with diverse skill sets. This includes individuals proficient in business, finance, law, hospitality and strategic planning. However, it’s essential to recognize the nuances of the private club industry and leverage management and external industry experts to bridge knowledge gaps effectively. Maintaining impartiality throughout the strategy development process is critical. Balancing diverse interests and opinions within the club requires a data-driven approach that prioritizes objective analysis over personal preferences. By leveraging data and insights, clubs can make informed decisions that benefit the collective interests of their members while ensuring organizational resilience and growth.

Private clubs are unique and operate in a complex landscape. Employing a consensus-based approach to strategic planning is an important process to ensure your club is positioned to thrive now and in the future.

Matt Clarfield is a Manager at GGA Partners specializing in helping clients develop comprehensive strategic plans. To reach him, email matthew.clarfield@ggapartners.com.

CMAC Partnership Continues

The Club Management Association of Canada and GGA Partners Renew Partnership Agreement for Three Years

The Club Management Association of Canada (CMAC) and GGA Partners are pleased to announce a partnership renewal agreement for a three-year period. The CMAC Corporate Partner Program recognizes industry partners that share the values of CMAC and offer members support as leaders in the club management profession in Canada.

The renewal as a Platinum Corporate Partner will continue to showcase GGA Partners long-standing commitment to the professional club industry and CMAC in the categories of strategic planning, business intelligence, and people services. GGA will continue to support CMAC members by facilitating an Annual Club Industry Survey focused on trends and relevant club industry insights. Beginning in 2024, GGA will work with CMAC to conduct and deliver the Annual General Manager and Food and Beverage Compensation Reports of CMAC members.

CMAC’s vision is to create great leaders through excellence in professional club management and its mission is to promote and develop the profession of club management. The Association offers a variety of programs and services in response to member needs and expectations including the certification program leading to the Certified Club Manager (CCM) and Certified Chief Executive (CCE) designations. Access to career opportunities, and a forum for networking for COOs, GMs, clubhouse managers, food and beverage supervisors, golf superintendents, chefs, and other professionals involved in club management are also important offerings of CMAC.

“We are excited to extend our relationship with CMAC and its members as a platinum corporate partner,” commented Michael Gregory, a Partner and Managing Director of the firm. “As a trusted advisor to many of the top clubs nationwide, we have the ability to seamlessly integrate our brand with CMAC and provide value to its members through our research and people services contributions.”

“GGA Partners continue to illustrate their dedication to the professional club industry and we’re thrilled to continue working with their group as a platinum corporate partner for the next three years,” indicated Suzanne Godbehere, chief executive officer at CMAC. “As a long-standing corporate partner, the firm has provided guidance and valuable industry insights to our members and we look forward to working closely with Michael and his team.”

 

About the Club Management Association of Canada
The Club Management Association of Canada is the national professional association for individuals involved in the club management profession in Canada. Since 1957, the association has been supporting members with education, certification, networking and member events to facilitate them being the best in the industry. Members include general managers, chief operating officers, assistant general managers, clubhouse managers, golf superintendents, chefs, controllers, food and beverage supervisors, golf professionals, as well as students interested in pursuing a career in club management. CMAC professionals work at private, semi-private and public golf clubs, country clubs, city clubs, faculty clubs and recreation and leisure clubs.

CMAC is headquartered in Toronto, Ontario with over 650 members and 11 branches across Canada.

The Conversations That Shape Business Results

Every club manager understands the value of effective conversations, with members, guests, employees, Boards and other stakeholders. Equally as important, is how the club approaches these conversations. What steps should clubs take to obtain the valuable information to hold effective conversations?

Surveys have historically served an essential role in building and maintaining successful club operations. As data analysis methods and technologies advance, surveys are now offering insights derived from data collected that were not previously available. In addition, surveys offer a valuable relationship-building practice with members and employers, the feeling of being heard.

As data-informed decision making has become increasingly vital in club management, surveys continue to serve a crucial role in the member feedback loop as clubs continually collect the right data to inform their operational strategies.  While operational and market data create a general understanding, surveys can target specific areas of interest to deliver unique insights that allow clubs to enhance their operations.

Types of Surveys

Surveys at clubs can be utilized for a variety of reasons, but all with the common goal of gathering data that can be used to inform decisions.

Member surveys are common and effective ways of gathering data. These can be in the form of an annual satisfaction survey, strategic surveys, or short pulse surveys aimed at capturing members’ opinions on a smaller range of topics (for example, food and beverage). These surveys usually have the highest levels of participation due to their short length. Overall, what separates member surveys is the customizable availability of the right data to identify opportunities for the club. By asking members their opinions and then acting on that information, members understand what they were asked, and they know the data is being used to keep their best interests at the heart of any changes.

Recent advances in statistical analysis allow clubs to extract even greater insights from satisfaction survey questions. One common error is to focus on those areas of the club that have the lowest satisfaction ratings. Instead, it is important to identify which areas of the club could benefit the most from investment to deliver ROI for members. Using advanced techniques allows clubs to identify touchpoints that can drive increased overall satisfaction by eliminating dissatisfaction and find those targeted risk areas that can negatively influence the member experience.

Another form of club surveys is the employee survey, which is becoming more popular at private clubs, especially considering the labour challenges that many have faced over the last few years. Like member satisfaction surveys, these surveys measure the satisfaction amongst employees regarding performance reviews, tools and resources, training, as well as their relationships with other staff members and club members. These surveys are a valuable way to build morale and satisfaction amongst employees, which contribute to increased retention rates.

Benchmarking Satisfaction

Satisfaction ratings are important to help make decisions. Changes in member preferences, economic conditions, or the industry are often reflected in satisfaction ratings and can be tracked and highlighted if the survey is repeated annually. Maintaining benchmarks as accurately and comprehensively as possible,  but also club and member profiles to provide segmented understanding, becomes important so you are aware of whether changes at your club are reflective across the industry, or which areas of club operations should be focused on the most.

During COVID-19, it was common for access to tee ratings to decrease and create strain on the golf course due to demand that exceeded previous years. Demand levels have begun to fall slightly in 2022 but continue to be far higher than before the pandemic began. Furthermore, understanding industry survey trends and best practices falls into favour when conducting surveys. For example, food and beverage operations are typically the most scrutinized area of club operations. However, a lower satisfaction rating for dining than the satisfaction rating for the golf course fairways does not necessarily mean that your club is struggling in that area. Accurately benchmarking this area of operations is important for club managers and their Boards to understand whether their ratings are unique or concerning.

Planning for the Future

Surveys are a useful tool for future planning at the club, ranging from interest in new amenities to changes to the club’s future vision. Asking members about their interest in potential capital projects helps prioritize these projects. Ensuring that members are asked about their tolerance to pay for these projects is an important consideration as this knowledge will help significantly in the planning/budgeting phase.

The club’s vision is another important aspect in helping the Board and management with decision-making and guiding the club into the future. Asking appropriate questions on members’ opinions of their future vision of their club offers them the opportunity to help guide the club’s positioning, based on their perceptions of the ideal private club experience.

Five Tips for Developing an Effective Survey

  1. Avoid including leading questions or those that may lead to confirmation bias as members want to know that their opinions matter, and that decisions haven’t already been made about changes to the club.
  2. Regularly conduct surveys, annually, if possible, to accurately track trends in satisfaction levels and member preferences as part of a larger data strategy.
  3. To prevent higher drop-off rates and lower response rates, keep the survey brief.
  4. Consider offering rewards or incentives for completing the survey and send gentle reminders; this typically increases the response rate, reduces costs, and is better for the environment.
  5. Ensure you ask questions to effectively segment the data to identify member differences; demographic questions are important but layered techniques, such as family life cycle, yield deeper insights.

As data collection methods and technologies continue to evolve, clubs that engage their members, employees and relevant stakeholders will gain a strategic advantage. Holding the conversations that matter and subsequently acting on what is needed will contribute to keeping your club connected, competitive and successful.

This article was authored by Michael Gregory, Partner and Andrew Johnson, Senior Associate for the Club Management Association of Canada’s Club Manager Quarterly Magazine. 

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