Tag: Member Experience

Planning for the Next Business Cycle

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The sun does not shine on the same dog’s back every day.

This folksy reminder should be a point of focus in private club boardrooms because most clubs have full memberships with wait lists, giving club leaders the sense that happy days are here to stay. It was not that long ago that the majority of private clubs were scrambling to find new members while some of that majority—roughly one in five—faced economic failure.

During these good times, what should you be doing now to prepare for an economic downturn or a slowdown in membership demand?

Become the Employer of Choice
Private clubs throughout North America have steadily rebuilt their staffing levels to “full.” At the worst of the pandemic, many clubs were operating with less than 75 percent of their workforce while laboring to recruit more team members. While this objective is not an easy one, personal and personalized services, which are the backbones of the private club value proposition, require reliable and well-trained staff.

Many club leaders have been of the mind that their club simply needed to “throw money at prospective employers,” and they have been surprised to learn that those attracted to private club services seek fulfillment that comes from several important benefits:

• Being a part of a good team. Those who would be in personal services at private clubs want what club members want…belonging. The best employees know that they are capable, well-trained, and of valuable service. They want to belong to a team where their attributes have value and recognition.

• Being recognized as a reliable teammate. Recognition is important to everyone and, especially, to those who are team players.

• Being proud of their employer. Staff members know the best clubs – and employers – in town and want to join the winners. Club leaders must be alert to doing the right things right in the eyes of their staff.

Focus on Capital Reserves & Capital Planning
Many clubs aggressively spend new-found capital—from government programs and new members joining the club—on long-deferred capital maintenance projects and improvements. In many clubs, generations of club leaders dismissed the notion of making capital investments when they did not see ready access to capital through debt or capital calls on members.

Club boards should focus now on the capital maintenance projects that will update, repair, or replace existing assets on their clubs’ balance sheets. Capital reserves should begin to be built for the next round of capital needs.

Extend Your Club’s Brand Reach
In good times, club leaders think their clubs are great. In bad times, such as before the pandemic, many club leaders were afraid of their clubs’ brand because either they did not know what to do with it or because the brand pillars had been ignored for decades. There are three easy steps to improve your club’s brand reach are:

1. Improve board communications with members. Members expect the club and its board to be transparent. Improving board communications can be as simple as the board committing to a regular schedule of updates on topics of interest to members or as advanced as adopting a style guide that brings forward an editorial agenda that tells what topics the board will be communicating and when.

2. Embrace rising generations of members. Clubs are regenerating as the most tenured members age out of active use of the club while newer and younger members are settling in. The oldest members want to be remembered, respected and included. Newer members want advanced capabilities, apps, and immediate access. Check your club’s bandwidth to ensure that the club’s capabilities are up to current standards for access and content.

3. Act on the club’s core values. Ensure that your communications content is timely, inclusive, and easy to understand. If, for example, your club claims to be a “family club,” ensure that programs and programming include everyone in the family and go beyond the easiest choices.

It is called a “business cycle” because events change with high predictability. It is advisable to plan now for economic changes, slow-down, or global events.

Creating Your Forward-Looking Capital Plan

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The process to create a capital plan begins with three questions:

1) Do you know how much capital your club requires to replace its existing assets?

2) Not including your ‘wish list’ of whiz-bang new assets like golf training technologies or new casual dining or state-of-the-art member services, do you know what your capital needs are?

3) And do you know how your club will source the required funds?

Like most club leaders, you may have answered these three critical questions with a cautious ‘no’. The fact is that few clubs are looking to the future with a bona fide capital asset replacement plan.

Here are three steps to take for beginning your club’s forward-looking capital planning:

1. Conduct a capital reserve analysis of existing assets.
Build an asset replacement spreadsheet with the following columns:

Asset Description | Useful Life | Remaining Useful Life | Replacement Value

This will yield a comprehensive view of current assets and provide the club and its future board members and operators with a clear-eyed understanding of the sums required over the upcoming 10- and 20-year time periods. With these steps, you have established your current capital needs on an annualized basis.

2. Itemize the assets you wish to add to your asset roster.
Contemporary design concepts that enhance member experiences are emerging, offering clubs greater relevance and engagement for members – new and old. Among the most popular new concepts are:

Sports Training Facilities like golf and tennis swing and stroke analysis technologies and the gamification of these technologies.

Al Fresco Dining Venues like porches and patios bring the indoors out and the outdoors in many clubs where COVID-era members grew comfortable with a little more personal space and sercouldle to navigate dining spaces more comfortably.

Swimming pools for all ages where club members require lap lanes for serious fitness swimmers, splash pads that are proving safer (than the old-school kiddie pool) for children, and resort-style pool areas for adult members.

Club leaders should plan boldly when considering new amenities. When the membership market cools, good fortune will favor the bold.

3. Identify the sources of funds that are needed.
This is the uncomfortable topic during which most club boards freeze up and seek to procrastinate. Many leaders are uncomfortable telling members that more money is required for the future.

Don’t sell your members short. If they were smart enough to join a fine club, they are smart enough to know – whether they like it or not – that club membership comes with extra costs. Furthermore, most members know that fiscal discipline and prudent financial planning are the primary duties of servant leaders. Three points to remember when thinking about club spending:

  • Members expect you to know and tell them what is required for the club’s successful future. Ignoring this fact causes members to distrust their board members.
  • Members are intolerant of board members who ignore their financial responsibilities.
  • Even those criticizing dues increases know there should be a capital plan.

Use the following best practice standards in sourcing needed funds for capital requirements:

– Begin with the understanding the monthly dues should be used to pay the club’s bills. Regular dues fund all expenses on the income statement – labor costs, operational and administrative expenses.

– Joining fees paid by incoming members are used for funding capital asset replacements. If these funds are inadequate to fully address capital replacement needs, clubs turn to debt, capital calls on members (assessments), and a combination thereof.

Planning for the future financial needs of your club should be a top priority. Following these steps will set your club on the proper path.

This article was written by GGA Partner Henry DeLozier for BoardRoom Briefs.

 

Building Member Trust

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Signs of distrust are everywhere, and private clubs abound with demands for greater transparency from club leaders as trust and trustworthiness are constantly being questioned.

Frustrated board members who work tirelessly in service to others can become demoralized by fellow members who demand “more transparency.” The incredibly nuanced circumstance comes down to three keys:

1. Say what you will do…and do it.
To achieve this simple-sounding advice requires that the board speaks with one voice and in writing. Too many board members become overly – and overtly – political when they are simply servant leaders within a membership of qualified leaders.

2. Communicate consistently.
Members – whether skeptical or not – want to know more. And no matter how much “more” the board provides, members assume that something is being withheld.”

Tactical steps that work:

  • Establish a standard cadence for Board communications concerning financial and governance topics. See that the club delivers to the timeline and cadence it has promised.
  • “Brand” club communications to enable members to know which they want to delete without reading. Some members have grown weary of promotional messages from the club concerning food and beverage specials…they can easily be deleted. Everyone wants to know about dues increases and capital projects.
  • The branding need not be the stuff Madmen might develop, it can be simply the Club Financial Update or Board Notes.
    Address misinformation and the bad actors behind it. Correcting inaccurate information is a service to all members. Quietly holding the bad actors to account is the duty of the board and its executive committee. Put people on notice.

3. Keep score.
Report performance results…especially if there is a miss. Taking ownership of unmet promises or misses is a part of being trustworthy. Ready examples are:

  •  Summarize last month’s financial performance, explaining whether it was on-budget, under- or over-budget. Make it easy for members to understand the information being presented from the board and management.
  • Measure engagement results. How many people signed up for the member/guest? How many had to be turned away? How many dropped out preventing others from the chance to participate? How many members voted…and did not. Everyone wants greater accountability which is a 360-degree proposition.
  • Take ownership of the misses. Owning an error, and explaining the steps that will be taken in the future to avoid making the same mistake, is a part of being trusted.

Your club can proactively move toward a more civil and reliable community when the leaders take the lead in trustworthy ways.

This article was written by GGA Partner Henry DeLozier and appeared in the January 4, 2025 edition of BoardRoom Briefs.

 

Keys to Effective Communications

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3 Keys to Effective Communications

Year after year, private club members demand ever-greater transparency and expect their servant leaders to communicate more effectively. In our experience, club leaders are responding, but the fact is that communications are only effective if they are two-way. Leaders must deliver effective communications, but members must open and read what is sent.

To develop communications your members want to read, GGA Director Linda Dillenbeck, a seasoned communications and brand management expert, offers three keys for club leaders seeking to improve the quality and relevance of the information they send to members:

1. Keep communications short and simple. “Too often, board communications are filled with unnecessary or irrelevant information. Use simple words to engage and inform members,” stated Dillenbeck. “The average person will consume about 200 words before they stop reading and start skimming, so don’t waste time telling someone how to build a watch when all they really need to know is the time.”

2. Separate your key thoughts. Dillenbeck has observed that the internal and external club communications are often complicated, fuzzy, or downright confusing. “Not only do people, and your members, prefer short communications, they also want simple and straightforward messages, “stated Dillenbeck. “The most-read information is the one that separates thoughts into shorter paragraphs and uses subheads and bullet points. In that way, a member in a hurry can get the gist of the message without reading every word.

3. Repeat, Repeat, Repeat. Linda observes, “Your members, like all consumers, are faced with over 3,000 messages of one type or another per day, most of which are not read or retained. If a key message needs to be conveyed about club business, it must be repeated multiple times in multiple communications. Just when you are tired of talking about a subject is when your members are beginning to pay attention.”

Although club members consistently criticize club communications, club leaders consistently put quantity over quality while citing their many attempts to communicate. In most cases, more is not better.

Dillenbeck advises, “The first thing a club can do to manage communications is to develop a Brand Standards Manual.” This document serves as a guide for staff and board members by outlining the overall messages and tone to be used in all internal or external communications. Not only does this help those who may find writing a difficult task, but it also ensures that your messages stay consistent with the image you are projecting of your brand.

With a Brand Standards Manual in place, the board and management team should develop a timeline for communicating with members. “The rule to follow in this regard is to communicate only when there is relevant information to share,” added Dillenbeck. “That means sending a weekly update may not be necessary; rather, every other week may suffice. Otherwise, your messages will be unread.”

One concern many clubs face is measuring the effectiveness of communications. How does one know if members are getting the message? “The most reliable way to track effectiveness is to use an email service that provides data about how many members opened the email, clicked on a link or responded to a question,” stated Dillenbeck. “If the numbers are low, club leaders must ask members why they are not opening the correspondence through intermittent member surveys.

Effective club communications set top-performing boards apart from other well-intentioned club boards. It is said that one should not feed the pigeons because they return wanting more when – in fact – feeding your members a steady diet of interesting and helpful messaging keeps your club relevant in their lives.

This article was written by GGA Partner Henry DeLozier and appeared in the November 16, 2024 edition of BoardRoom Briefs.

 

Strategic Planning that Makes the Difference

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Strategic planning has become important in most private clubs, riding the wave of membership growth across the U.S. Long a proven tool for the best-performing private clubs, strategic planning brings intention and clarity to the board’s efforts. Beyond the textbook matters of sound strategy, five strategic priorities have emerged as a part of the novel coronavirus pandemic.

1) Regeneration of Members
Baby boomers have long been the driving force in private clubs. Many are progressively aging out of clubs. The youngest Boomers were born in 1964 and are now 60 years old, while their older siblings—born as early as 1946—are well into their 70s. Boomers are now being replaced by GenX, who range in age from 59 (born in 1965) to 43 (born in 1980). Each group has different needs and wants, requiring understanding the priorities driving the decision to become and remain private club members.

Generation gaps are appearing in clubs where the most tenured members—the oldest by profile—do not wish to pay for capital improvements that younger members consider overdue. Most clubs are working through the generation gaps, and all boards are faced with regenerative choices.

2) New Priorities in Clubs
The new wave of members introduces a regenerative change in clubs’ priorities and needs. Four new-wave points of emphasis in most clubs include:

  • Fresh-air Dining: The onset of the pandemic caused the need for open-air dining options. Members’ preference for fresh air and a sense of openness has persisted. New solutions for window treatments and patio spaces are taking the day.
  • Facilitated Lifestyle: Members require more assistance to enjoy their clubs. Matters such as loading and learning how to use the club app, meeting new members who joined the club during the pandemic, and organizing emerging interest groups now require support from management and staff.
  • Pickleball: Having swept onto the scene as an engaging and highly social activity, new demands for capital and square footage are placing this active adult sport at the forefront.
  • Cyber-Security: Reflecting the world around the club, cyber threats are more prevalent in private clubs. It is time to audit your club’s cyber-security.

3) Investment in Capital Assets
Most clubs have benefited from increased capital funding as new members have restored capital reserves, enabling many to address long-deferred capital needs.

New capital projects are usually funded from Capital Improvement accounts while replacing existing club assets is typically considered Capital Maintenance.

The prevailing trend is catching up on capital maintenance projects – like new roofs, patio upgrades, parking lot resurfacing, and HVAC needs. Capital improvement projects include pickleball courts, swing simulators, sports training technologies, and golf course improvements.

4) Importance of Transparent Governance
In these troubled times, some clubs have begun to act out the behaviors from the evening news…name-calling…stubborn resistance to needed changes…and internal segmentation of member groups. The time for open and transparent governance practices is now. Topmost among the changes coming to club boards:

  • Board Policy Manuals: Use of a BPM has spread actively into private clubs where the backbone of transparent governance is a clearly stated method of governing. The BPM tells members how their board will function and holds boards accountable for their efforts.
  • Diversity and Inclusion: Leading clubs have taken responsibility for making their leadership profiles more diverse and inclusive. Although there is still much to be done, clubs have begun to embrace the tenets of DE&I.
  • Robust Board Communications: Many club boards have increased the frequency and quality of content in their board communications. Members now expect to know what matters are important to their board.

5) New Focus on Brand Management
Clubs are brands, and the most sophisticated board members recognize the necessity of managing the club’s brand proactively and consistently. Many clubs enjoy solid brand ratings but have not understood the importance of intentionally projecting the club’s brand. The evolution of brand management in private clubs requires a thorough understanding of the U.S. Tax Code and the particular club’s obligations therein.

Following these insights as you develop the strategic plan for your club will ensure intention, purpose, and clarity in your efforts to achieve success.

This article was written by GGA Partner Henry DeLozier and appeared in the October 26, 2024 edition of BoardRoom Briefs.

 

Effective Board Orientation

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Good beginnings create a sound future. A challenge in many private clubs is that every year is a “new beginning” as new board members are seated and outward-bound servant leaders are replaced. Four important considerations will make leadership transition more effective and favorably impactful at your club.

Plan and implement board orientation earnestly
Most new board members consider themselves well-versed in governance, strategy, finance and leadership, which is good as these are the cornerstones of effective club governance.

The catch is that most board members—especially in these skeptical and conflicted times—bring certain baggage with them into the boardroom. One of the most important first steps when new board members are empaneled, is to confirm shared and basic understandings, such as:

Boardroom confidentiality is essential to trust within the board and beyond. Most private club boards follow established corporate board practices requiring all board members to execute confidentiality and nondisclosure commitments. A growing audience of club boards now imposes dismissal from the board when confidential information is leaked from the boardroom.

Conflicts of interest—as is common in corporate America—are carefully monitored and not permitted in top-performing boards. Annual renewals of non-conflict statements are common practice.

Review and understand the club’s governing documents—bylaws, rules, and board policies manual—to ensure that all board members understand the club and the gravity of their duties.

Confirm the club’s strategic priorities
Most clubs have developed a strategic plan, which is an overarching plan of action for the business of the club, in addition to such important strategic components as the (a) master facility plan, (b) capital maintenance budget (replacing existing assets), and (c) capital improvement budget (adding new amenities). The fact is that one of the primary duties of a board is to attend to the financial well-being of the club by focusing on the balance sheet.

An advanced understanding of the club’s goals and objectives requires focused one-on-one discussions with the board chair and new board members—if not all board members. This step should be a priority before the first board meeting.

Charter committees with great intention
Committee charters are the job description that guides the work of club committees by providing structure and an understanding of what the committee is—and is not—to do. Excellent examples of committee charters are readily available.

Among the most frequent mistakes made by most board committees are (a) much ado about nothing while accomplishing very little of the strategic priorities, (b) executing personal agenda items rather than strategic goals and objectives, and (c) inadequate reporting vertically to the club board and horizontally to other board committees.

The current best practice standard includes committees for finance, nominations, and audit. Committees for golf, greens, tennis and house are now identified as operating committees and are guided by the club’s manager/CEO.

Communicate. Communicate. Communicate
The most frequent complaint among ordinary private club members is, “Communication around here stinks.” In these skeptical times, club members doubt their boards’ dedication, capabilities, and successful performance in the absence of a steady flow of relevant board communications.

Members are eager to know what the club is doing. And, in the absence of effective board communications, tend to fill in the blanks of unexplained and inadequate results.

The most effective club communications are characterized by (a) redundant messaging to ensure that most members receive primary messaging from the board; (b) multiple media usage to address the broad generational spectrum present in most clubs today, and (c) personalized communications which address topics that are most interesting to each member and reducing the flow-through of communications about club activities that are not of interest to particular members.

The best-performing club boards take club governance seriously, and the transfer of leadership within the club is mission-critical to the club’s future.

This article was written by GGA Partner Henry DeLozier and appeared in the October 19, 2024 edition of BoardRoom Briefs.

 

Innovation…the Key to Success in Private Clubs

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No stranger to innovation, Bob Dylan recorded “Like a Rolling Stone” in early summer of 1965 causing Bruce Springsteen to say of the first time he heard it, “[it] sounded like somebody’d kicked open the door to your mind.” The song was innovative and wildly admired in numerous ways and changed popular music for years to come. Innovation seldom comes in such a lightning bolt.

In the wake of a once-in-a-century event like the coronavirus pandemic, what innovations has your club introduced? Some of the most interesting innovations tie to the growing capabilities of artificial intelligence (AI) where performance diagnostics for golf and tennis; where applications of technology are enabling more seamless facial recognition which enable club personnel to eliminate the confounding “what is your number” question; and where advanced cybersecurity can protect private club members’ identities and confidential information. The possibilities are like a rolling stone.Three innovations worthy of consideration for your club:

1. Performance Enhancement Capabilities – One golf swing analysis chamber is not enough, as most clubs have found. Then, two are found to be lacking in most clubs and only when clubs commit to making athletic performance facilities a central feature in their approach to innovation do they prosper.

The reasons most often found in clubs taking this big step are three-fold:

Enthusiastic users are seen by other members as “hogging” the new amenity and, thus reducing others’ enjoyment or experimentation.

The social enjoyment, where groups of golf or tennis enthusiasts gather for informal “leagues” during off-season and inclement weather conditions. The blend of athletic, competitive, social seems to be popular with club members.

The pressure on club boards to find new and interesting activities escalates with each advancement.

Golf training and swing analysis capabilities are exceedingly popular. Bear in mind that a tennis stroke can be analyzed if a golf swing can be. And then, there will be pickleball.

2. Personnel Development Methods –Many club leaders are answering questions about the quality of member services and innovative managers are turning to new-found programs and resources for teaching service capabilities to a higher and more consistent levels.

“To effectively shape training and development initiatives, it’s crucial to incorporate the employee experience,” says Eric Hutchison, PhD, Director at GGA Partners. “Leveraging new technologies alongside established knowledge has unlocked a vast array of training possibilities for enhancing upscale member services.”

How does it feel to be on your own when capabilities are building all around?

3. Emotion-Based Member Activities – Members join clubs for many reasons. Eric Brey, PhD, another Director at GGA Partners, reports, “Club members indicate they are most satisfied with the emotional value they receive from their membership. This value is created from the feelings they have toward their membership.”

Socialization – The desire to interact with friends and family dominates this point of emphasis. Part of the human condition, socialization is one of the basic needs clubs serve.

One of the most impactful innovations in clubs has been the growth of open-air or al fresco dining experiences that emerged responding to Covid-period social distancing guidelines. From this concept, some clubs are capitalizing on open-air member events like a Sunday afternoon picnic which underscores all members desire for a safe setting for activities which bring friends and families together.

Personalized Service – Many members want to be recognized and treated as “special” as part of feeling comfortable at their club. Clubs that provide personal recognition – like being called by name without prompting – fulfill this need of many members.

Wine programs where members’ names are attached to their own bin filled with wines chosen for them. Next-generation ideas emerging bring forward bespoke menus for small member gatherings…think of a catered event on a smaller scale of 10 to 20 members per event.

Who wants to be a complete unknown with no direction home?

Innovation in private clubs is emerging as a platform for market differentiation and competitive advantage. Club leaders who recognize these opportunities provide valuable opportunities for their clubs’ service to members’ needs.

GGA Partner Henry DeLozier penned this article.

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