Club Culture and Value in Membership

The world of private clubs has changed.  Our fathers and grandfathers joined “the club” for a variety of reasons.  Maybe, it was the prestige?  In some cases, it was for business networking and others to support a more secular social organization.  My grandfather was a founding member of our former (now defunct) club because he perceived it as supporting the Jewish community.  He didn’t play golf.

Today’s social dynamics have changed.  To some (including many very successful people), belonging to a club is “tabu” and frowned upon.  While the networking elements still exists, to most the primary reason for joining a private country club is value in membership.  Of course, that term can mean different things to different people, but to many (if not most), it’s about receiving value in exchange for their dues and fees in the form of recreational activities and opportunities.  When clubs are perceived to provide good value, they are typically successful, have full or near full membership and the club gains value financially through strong economic performance.

Of course, this shouldn’t be construed that every club should have as many members as possible. Access is a key element to value in membership.

Since each club has its own unique culture, defining value to that culture is critical.  Some clubs have a very strong sporting culture.  Serious golfers, for instance are likely to seek a club with not only other like-minded golfers, but also a highly desirable golf course and other golf amenities like excellent practice facilities and a walking culture or caddie program.  A high level of golf course maintenance and conditions are critical to this segment, while quite possibly being economically unsustainable.  Some clubs are more family-oriented.  These clubs are often more focused on other elements of the club such as the swimming pool, tennis courts or fitness facilities.  The food and beverage offerings at these clubs are typically less formal.  In some instances, clubs without a strong focus on a particular sport or group might emphasize their food and beverage.  A large and diverse menu, event hosting and extensive bar offerings are often the focus of those clubs that emphasize the social activities, sometimes with sports offerings being secondary.  Few clubs do all at a high level.  Some clubs are more price-sensitive than others.  In those situations, members need to understand that access might be compromised.

Where value is created is when a club looks in the mirror and retains an independent professional to do an objective SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis.  It’s a complex analysis that requires a club to evaluate its location, facilities, potential of facilities, competition and market depth and the culture of both present and future members.  A club that’s located in a less than affluent community or a small town with limited potential for membership will have economic and demographic limitations.  A club with limited land resources may not be able to accommodate a modern golf practice facility.  Even those clubs with ample land resources and a healthy membership may want to examine the club’s culture before over-investing in facility enhancements that may push members away due to cost.  Conversely, a club that focuses only on controlling the cost may not be able to provide the amenities members desire to the point that they look elsewhere.

Some club advisors and consultants (often with diverse backgrounds) are advising clubs simply to continually enhance their facilities, often with no consideration to the broader economics involved.  For sure, clubs need to maintain and update their facilities.  However, if the questions of “what’s the cost?” and “can we afford it?” are the only ones asked, the club isn’t seeing the whole picture.  Do the proposed enhancements contribute to the value of the club and membership an amount commensurate with their cost?  Of course, this is a part objective, part subjective question, but needs to be considered.

Does the club’s location warrant further investment?  Some older clubs are located in areas that no longer serve the membership geographically.  Can the location support long term success of the club?

All of this speaks to an understanding of the club’s culture, which is defined as “a whole way of life” or “the behaviors and beliefs characteristic of a particular social, ethnic or age group”.  It’s possible to spend too little, but also too much.  Getting it just right depends on understanding the variables of need, tolerance, competition, culture and of course the club’s goals and mission.