Measuring Performance – More than dollars and cents

Our society likes to measure performance. Who has or makes the most money, the biggest house or who’s the best golfer or football team are constant topics of conversation. In the business world, performance is often measured exclusively by economics. Though golf courses are often ranked in various ways, they too are businesses and often judged only by their economics. While most certainly important, a club’s income/expense profile is only one measure of whether it’s performing its intended function.

There are approximately 2,500 municipally owned golf courses in the United States. When analyzing any “muni” the first question we ask is whether the primary function of the course is to generate profit or to serve as an amenity for community residents. The answer – given by community leaders – determines how the performance is analyzed. If it’s about providing an amenity, the operation is designed to be self-sustaining with any profits reinvested, or may even be subsidized. Local residents are likely to have preferred rates and access. If the course was intended as a profit center, rates and rounds are likely to be maximized and any discounts kept to a minimum in the interest of enhancing revenues. Access may be hindered by crowded conditions and costs and expenses will be managed differently than if the goal is providing an amenity.

At the nation’s roughly 4,500 private (golf/country) clubs, performance can be measured in various ways. Depending on the club, it’s culture, and its market position, performance can be measured purely by economics but there are other, often overlooked metrics that are more difficult to measure. Some clubs simply pay whatever costs they incur and divide the bill equally among the members later. Such clubs are few and far between. Most seek to balance amenities and service with a cost palatable to the membership.

It goes without saying that nobody wants to lose money or have a cost of membership that exceeds the perceived value. That said, how is a club’s performance measured, especially by those that matter most – the members (and prospective members)?

Given that a private club is a luxury and represents discretionary spending, the most important measure of a club’s performance is member satisfaction. Whether the club seeks to control the cost of membership or is at the high end of the dues spectrum, the members must be satisfied that they’re receiving value. For sure, individual members will have a variety of perspectives as people join clubs for different reasons, like those listed below:

  • Prestige in belonging
  • # and variety of amenities (existing & planned)
  • Quality and conditioning of facilities
  • Access
  • the Membership
  • Atmosphere
  • Quality of Food & Beverage
  • The club’s Recognition

Each of these can have different meanings to different members. Some want racquet sports, aquatics and other activities while others simply want golf. Some want the hardest golf course while others seek a place for a friendly stroll with friends. Some are willing to pay for unlimited access and all the amenities while others prefer lower cost and are willing to endure more crowds and limited amenities. Some memberships prefer a more formal environment with numerous rules while others seek a casual atmosphere where members can be more relaxed.

The point is that measuring the performance of any golf or club facility starts first with defining its objective and priorities. These can (and do) change over time, especially as club membership and leadership evolves and desires change. Balancing economics and member satisfaction can be a challenge but above all else, clubs – even in today’s strong membership environment – need to acknowledge that the club needs the members more than the members need the club. There have to be reasons to join, but in most cases members won’t pay any amount.