A Tale of 2 Clubs

I recently visited my dentist, Dave, who, because he’s invariably got a bunch of sharp, shiny instruments in my mouth, does most of the talking.

He tells me about his club, which has just hired a membership development person. Since he’s on the board, in a position of leadership, Dave is glad to hear that I agree this is a step in the right direction. It’s an older club, in a unique location, with a delightful golf course on a very small site with limited practice facilities and outdated buildings. Like many clubs, it has been impacted by the recession and has been unable to re-invest — to update and improve facilities — due to declining membership. While some members have agreed to establish an improvement fund, it doesn’t go nearly far enough and participation is limited. Having a membership development expert on board should help.

While many clubs find themselves in a similar position, where investing considerable sums isn’t an option, an improvement plan is necessary at the very least. I suggested (and Dave agreed) that his club needs one, but Dave thinks it’s unlikely to happen until they increase membership. This is the age-old problem of putting the cart before the horse, of course. I wish them luck but they need an improvement/reinvestment plan to sell prospective members.

Dave’s private club is typical of so many in America today. I know of one club in particular that didn’t heed this same advice. It was recently sold to a developer. It’s now operating as a public golf course, and the members are anything but happy. That club couldn’t get to the reinvestment stage, because it had no reinvestment plan. The members chose to do nothing.

On the other hand, I know of another club that incurred the expense of developing a quality long-range master plan, presented it to the membership, and “sold” it as an act of stewardship on the club’s behalf. The plan was passed by a vote of 68% to 32% and the club quickly began a very successful membership development effort. The plan is now under implementation and the major portion (golf course renovation) will begin next summer. In all likelihood, that club will thrive well into the future, despite a significant assessment of the membership and the loss of a golf course (1 of 2) for the better part of a year.

The contrast between these clubs is something I see quite frequently when observing and analyzing private club markets. The clear and unmistakable trend: Those clubs that have elected to move forward, evolve, and continually enhance/revitalize their facilities, programs and infrastructure are at the very least surviving — often thriving. Conversely, those clubs that have elected to “tread water” and ride out the recession have often declined, lost members, and, in many cases, either been sold or ceased to exist altogether.

Certainly, every club and every market is different. But there are universal truths. Price is important everywhere, but value is even more important. I love Warren Buffet’s quote; “Cost is what you pay. Value is what you get.” Private clubs exist because people who can afford them choose to join. If the club doesn’t provide value, it won’t survive.

I can’t over-emphasize the importance of club’s continued evolution and improvement, while maintaining fiscal responsibility. You can’t provide value without reinvestment, and the checklist is simple:

  • Sustainable Revenues (Dues and Fees)
  • Intelligent Expense Management
  • Investment and Re-investment