Giving the Sizzle to Your Stakeholders

To sell the need for technology upgrades, you must show the payoff in member and guest benefits.

by Jamie J. Gooch (editor@clubandresortbusiness.com)
August 2006
 

Summing It Up General managers should acknowledge the costs involved in updating technology, and its maintenance and upgrades. Most members now clearly prefer e-mail and Web sites for receiving communication from their clubs. With an integrated technology system, it becomes easier to sort and compare data across multiple departments. Don’t Forget Your Homework Before going to your Board with your palm up, be ready to answer the questions you’re sure to be asked. Talk with other general managers and technology providers to help prepare your responses to these common questions: How much will the investment cost now, a year from now, and five years from now? What will happen if your property maintains its technological status quo? Will you need to upgrade your club’s technology infrastructure to accommodate the new technology? How will a new system integrate with, and enhance, existing technologies at your property, as well as with third-party systems? Will it integrate with future systems you may decide to use? How will it help improve member/guest recruitment, retention, participation and communication? What type of vendor support is available? What type of training is needed and available? How will the technology reduce employees’ workloads and allow them to focus on adding value in other ways? How will the enhancement add value to the member/guest experience? It’s also a good idea to come armed with statistics on how your members or guests use technology, compared to national averages. If you have the opportunity to survey your members in advance to determine their technology habits, make the most of that data.

With all of the big-ticket items that the Boards and owners of clubs and resorts need to invest in—from a new fairway mower to a dining room renovation—technology often takes a back seat. After all, it’s easy to see if a swimming pool hasn’t been cleaned or a tennis court is not maintained, but who really notices that employees are using decade-old technology? Until now, no one but the general manager. He or she listens to the staff complain about having to work with outdated equipment and software, while members and guests voice displeasure with less-than-perfect service.

But times are quickly changing. General managers can no longer afford to shy away from being upfront about the need to stay atop of the technology curve, or to bear the costs of doing so. Just as buying a new piece of golf course equipment will bring maintenance expenses and an eventual need for replacement, it’s time to acknowledge that the same is true for technology. GMs, especially those being positioned, and paid, as “chief operating officers,” really aren’t doing their jobs fully if they can’t successfully make the case that technological investment is just as necessary for competitive advantage, and just as essential, as any other capital expenditure.

Technological investments are now just as necessary for clubs and resorts as any other capital expenditures.

The good news is, now that “google” is listed as a verb in the dictionary, and more than two billion people use cell phones, technology is a much easier sell for GMs.After all, it’s hard to pick up an issue of Forbes or BusinessWeek without reading how one company or another has cut operating costs or improved efficiencies with technology.

Still, the other half of the battle is that Board members and owners need to be reassured that they’re investing in the right technology—one that will add value to management and service, and not be obsolete before it’s installed.

Making the Soft Sell

Technological investments are now just as necessary for clubs and resorts as any other capital expenditures.

Tim Muessle knew he had to make that pitch to his Board when he became the new General Manager and CEO at Wykagyl Country Club in 2004. Muessle came to Wykagyl, a 108-year-old, member-owned club in affluent Westchester County, N.Y., from ClubCorp, one of the leading club and resort management companies (C&RB, July 2006).

Working at properties managed by ClubCorp, Muessle was accustomed to making a few clicks to get the data he needed to make business decisions, and to using technology as a key competitive edge.

Things were different at Wykagyl, though—a property built on a rich tradition that didn’t yet include technology.

“It wasn’t a hard assessment to make,” says Muessle. “Our system was so old and antiquated that it had to go. It was interfacing DOS programs together.”

Like many clubs, Wykagyl was in a “pay me now or pay me later” situation. It could keep sinking money into outdated software and proprietary systems that were increasingly expensive to maintain, or put $50,000 into a state-of-the-art club management system knowing that it, too, would need an upgrade in five or six years, if not sooner.

Either way, the question boiled down to how long the club could afford not to invest in new technology in one form or another.

Muessle did his research and decided not to focus on cost savings, but rather the benefits that improved technology would provide for members and club operations. He wanted to paint an exciting picture of what technology could bring to the club.

“You can sit there and esoterically come up with numbers and figures, but to me that’s not exciting,” he says. “I sold the integration benefits, the data-mining possibilities, the improved communication—how it would all add value to the membership. You have to show the Board that you A) will spend their money wisely, and B) have done your research.”

Gerard O’Callaghan, General Manager, Vineyard Golf Club, Edgartown, Mass.

Part of that research included talking one-onone with his Board members to ensure he had their votes before the presentation.

In Search of Credibility

Gerard O’Callaghan, General Manager, Vineyard Golf Club, Edgartown, Mass.

Gerard O’Callaghan, General Manager of Vineyard Golf Club, Edgartown, Mass., agrees that research is the key to credibility. The private club opened just four years ago, featuring one of the most environmentally sensitive golf courses in the country.

With members scattered across 26 states and six countries, plus a short operating season, O’Callaghan needed a better way to effectively communicate with them. Plus, the club’s location on Martha’s Vineyard means there’s quite a bit of local competition for members’ time. If Vineyard GC doesn’t get the word out about its events quickly, chances are members’ calendars will already be full.

Before the installation of its current management software, the club was communicating with members exclusively via “snail mail.” O’Callaghan made the case to his Board that this was no longer adequate.

“The reality is that most members communicate today via e-mail,” he says. “Our Board recognized that was the way to go.We needed a communication medium that was quicker than regular mail. When the Board saw what was possible with the technology, it was very responsive to it.”

With this encouragement to get the wheels in motion for installing an updated management system at Vineyard, O’Callaghan contacted a number of general managers at other clubs, to ask for their recommendations. He also spent time with the various software providers, insisting that they come to his club to explain the benefits of their systems.

Did Vineyard save the time and expense of creating and mailing a print newsletter once it made and installed its final choice of a new system? Not entirely. Because some of its members are not as tech-savvy, Vineyard still mails a printed newsletter.

But for the majority of the club’s 300 members, e-mail and Web site updates are now the preferred means of communication. And, because the new system integrates with Vineyard’s accounting system, the members-only area of the club’s site allows statements to be viewed online.

“We used to get a lot of member calls asking about a charge,” says O’Callaghan. “Now they can go online and click on a ticket from the food and beverage department, for example, to see that it was a $200 bottle of wine.”

Business Matters

Beyond how technology can add value, an integrated solution is also a boon to running the business. For example, at Wykagyl CC, data mining recently allowed Muessle to quickly promote a father-daughter dance to members with daughters of a particular age.

“The biggest benefit to implementing the system has been the ability to have information at my fingertips,” he says. “The financial management aspect is huge: We can get the information we need quickly, download it to Excel, and manipulate it however we want. It really helps us to run the business.”

Clean data that is accessible by multiple departments provides a number of benefits, such as forecasting catering or pro shop income, comparing historical sales data among different departments and creating budgets.

Muessle also uses his club’s new system to see which members spend the most, and least, in the various departments. The trends help him detect if members are unhappy with a certain aspect of the club. He’s also looking to expand the system’s integration to the pro shop and other departments, to make even more data available.

At Vineyard GC, O’Callaghan is not sure what the next technological leap might be. But even with a new system, he vows to stay on top of future improvements.

He does retain one “old school” caveat. “It’s still important to have good face-to-face chats with members,” he says. “Sometimes, that’s just as good as e-mail.” C&RB