President, McMahon Group Incorporated
Q: From your experience, what would you cite as currently the top reason(s) why people now drop club memberships?
A: Although we do see somewhat greater attrition in less standard areas, the majority of losses continue to come from uncontrollable events like death and relocation. The gap between membership limits and current membership counts that exists for many clubs across America appears to stem more from an inability to replace typical attrition than from an inordinate loss of members. To the extent that attrition is greater or that it occurs in the controllable areas of product and experience, the increases seem to be coming in the following areas:
As clubs have worked more aggressively to enroll new members in recent years they have populated their ranks with people that had insufficient understanding and, in some cases, insufficient means to be a member. After a couple of challenging years of membership, these people leave because they do not fit the mold of a club member. Older members that may have held onto membership in the past are somewhat more inclined to leave because the cost of membership has increased so dramatically over the past decade and they can not afford to remain members. Many people simply cite “non-use” on their exit interviews. This is a fairly generic response that can cover a lot of territory. Of course, few people are going to cite financial reasons, so it is hard to judge accurately how big of an impact this is, but I would guess it is half of the people.
Young people tend to be the least satisfied members because they have so many lifestyle issues that limit their use of the club. If they are not willing or able to take a long term view of membership as an investment in themselves, then they will bail out early in their membership, especially if a price based drive enticed them to join in the first place.
Q: What are the most basic things a club must do to halt/prevent attrition and ensure healthy membership levels?
A: The main thing a club can do to limit attrition is to have a good pulse of the membership. This is the only way to assure you are offering the programs and services people want. If members are not using the club, they are susceptible to resigning. This includes performing well in the critical areas of golf and dining, but also excelling in the program areas. Special events and programs that draw people to the club more frequently will increase the value of membership. This is a critical function of the Membership Services Director.
Q: What would you cite as the biggest mistakes that clubs now make in the membership retention area?
A: People join a private club expecting a first rate experience, so the first order of business is to run a first rate club. The leadership must have a good understanding of their membership and work to meet their needs. In many cases, the leadership’s focus is too narrow. As a result, the club will tend to excel in only one area, say having a good golf course, while failing to deliver the services and facilities in other areas that are also important to the members.
Clubs often fail to make the new member welcome in the club. Our surveys show that less than three-quarters of the clubs provide any sort of new member orientation and there is pretty significant dissatisfaction with the experience at the clubs that do. A new member is excited to use the club, but they are also unsure about how to go about it. The sooner you can make them comfortable in their membership, the more likely it will grow into something that they use and value. If they are forced to find their way on their own, it could take several years for them to feel fully comfortable at the club and to develop the sort of network that keeps coming back.
A formal and thorough orientation should be mandatory for all new members prior to them receiving authorization to use the club. This should include a presentation from the staff on how to use the club and a welcome from the Chair of the Ambassador Committee to put a face to the membership.
Q: Should a club or resort implement different retention strategies for different member demographics?
A: Absolutely. Our research with members has shown that there are three distinct stages to membership. We have assigned names to each of these segments to reflect the prevailing traits that exist during these periods of a member’s life. The first is Up and Comers, which are young family oriented members age 45 and under. They want the club to meet their primary recreational and social demands, but they also expect that it will serve as a place of recreation and socialization for their families. This allows them to justify the cost of membership at a time in their life when they are still building wealth. The second group is called Prime Timers, which are members between the ages of 45 and 65. This group has more free time and disposable income due to their children leaving home and progress in their careers. They can enjoy the full benefits of membership. We call the third group Leisure Living, which are members over age 66. These members are often retired and have abundant free time, but they begin to be more concerned about the cost of membership and question if they can continue to justify belonging to a club. Each of these groups has different needs and desires for their club based on their circumstances tied to these three generational positions.
Although private clubs have somewhat limited resources that must be carefully divided between services that appeal to all members and those that meet the needs of target groups like those listed above, it is important to try to meet the different demands that exist to keep members using the club. For example, the youngest members want fun, casual events, a good pool program, junior programs and recreational activities. If these are lacking, they will not use the club much, and due to the high demands on disposable income at this stage in life, they will quit the club if the entire family unit is not participating. The middle group starts to play a lot more golf and wants generally couple oriented activities and the older members are very socially inclined and cost conscious. Low cost social events, like a dinner speaker and light meal, appeal to the older members desire to use the club and enjoy the company of their fellow members, many of whom they have known for a long time. Card playing fits the bill here also. A good Membership Director will have the pulse of their membership and be programming to meet the needs of these different segments to keep the members using the club, which is the key driver of membership value.
Q: Is it important for a club to employ a membership director? What qualifications should this person have?
A: A Membership Director is increasingly important in the world of private clubs. Clubs are going to be adding Directors in the years ahead to cope with the rapidly changing landscape for membership. The reactive strategy of the past no longer fits in a world where most clubs are engaged in a battle for market share. While the current members remain the number one source of new members, a club must have a professional continually stimulating this network if it is going to attract a sufficient number of new members.
There are broad economic differences in the world of private clubs and this factors heavily into staffing plans. Most clubs over 1,000 members require a full time Membership Director. Those between 500 and 1,000 members are increasingly likely to have one, but it is not universal. Clubs below 500 members have to make some important financial decisions and this frequently does not include someone in the membership department. Innovative staffing plans can help these smaller clubs. Broadening the role of the Membership Director to include Membership Services and sometimes private event sales and marketing can help spread the cost
of the position across several departments and allow for revenue generation in multiple areas.
The Membership Director’s must understand the concept of a fine, private club and it benefits the community and the individuals and families invited to membership. Membership marketing is lifestyle marketing, so a hard sell is not going to work. The Director must be very good with people and work to establish a rapport with as many members as possible to gain their confidence and referrals. In order to achieve their goals for dues and initiation fees, the Membership Director must maintain a roster of prospective members and be prepared to enroll the required members. The Membership Director must make sure all new members are properly sponsored, and that their characteristics and interests are consistent with those of the current members.