A feature article in this month’s Club and Resort Business follows up on a 2008 Wall Street Journal story about the private country club industry’s fight to stay alive during the recession. The WSJ article: Country Clubs Fight An Exodus – Economic woes are straining private clubs as members flee got it right – Private Clubs are in the “dues” business not the initiation deposit business.  So what does that mean?  It means the revenue generated from monthly/yearly dues and Club usage (dining, retail sales, etc..) is almost more important to the operation’s daily success than the deposit fee to join in the first place.  However, this does not mean a Club should dramatically reduce or do away with an initiation deposit all together!

The WSJ article was on point about the state of the private club industry – but we want to build on the importance of exclusivity and member retention.  A high-end private Club that radically reduces its initiation deposit ‘equally’ and radically devalues the exclusivity of the Club – period.  There’s no coming back from an emotional, ‘fire first aim later’ approach to drumming up membership sales.  What you do today will gravely impact what you may want to do tomorrow.

For example, if your Club has a joining fee of $150K – and you want to drop it to $20K (so an 87% reduction) – try answering these questions first:

• Carefully review your rules and regulations, contracts, and legal obligations-how can that deposit be spent/disbursed in your State?
• What message are you sending your founder members who joined at the higher price point?
• How quickly will they jump on the resignation list?
• How will you handle the refunds?
• Will you have the money to refund them?
• What type of members are you attracting at the lesser price point?
• Will these new members be financially able to sustain dues increases and future “assessments”?
• Will they support the other revenue streams (food and beverage, spa, retail, etc..)?
• What member relations and pr plans do you have in place to handle the disdain?

We’d actually like to hear your answers to those questions because we haven’t had any luck coming up with answers that warrant a reduction “if” you want your Club to remain true to the private club model.  We never recommend lowering a membership initiation fee. Instead, it’s our job as marketers of a specialized niche, Private Club Membership Sales & Marketing, to come up with “options” that benefit both operator and its number one asset, the member.

• What are your Club’s Features vs. Benefits (you should know the difference)?  A feature is a characteristic of a Club – a benefit is the advantage/value of that characteristic.
• How and where are you marketing them internally and externally?
• What are the tangible and intangible qualities of your Club?
• What is your competitive landscape?
• How is your Club uniquely different?

You have to know the answers to these (and others)  ‘BEFORE’ you design your marketing strategies or consider changing your initiation deposit.  We have a host of proven methods to market and generate membership sales.  Just this past season alone RTJ Consultants developed strategies which generated $2.5M in member enrollment and usage in a little more than 90 days for our client, the ultra private, The Westmoor Club, Nantucket – a Club with NO golf course.  You read it right – $2.5M in membership sales and usage with no golf course; no award-winning architect; no PGA Tour hosting accolades.  With our help, The Westmoor Club simply has a solid grasp of their unique selling proposition.  They have never taken the focus off their existing members.

Thomas Gilbertson, IPP (Immediate Past President) Golden State Chapter, CMAA (Club Manager’s Association of America) and General Manager of the Newport Harbor Yacht Club agrees with holding true to the values/benefits of private club membership and its members, “In times of economic crisis the value of private club membership becomes the driving force for the family and a safe haven for all to enjoy their friendships and amenities which deliver a place of enjoyment.”

We like what we read in the Club and Resort Business piece too.  Here’s our favorite quote from Ian Altman, Board President of Lakewood Country Club in Rockville, MD, “We wanted to avoid the gimmicks of no dues or waived initiations, and offer a product that would still be a real draw without being devalued…. we actually enhanced the vetting to make our application process more stringent; we weren’t just rubber-stamping applicants.”

RTJ Consultants has been nominated for Boardroom Magazine’s Membership Marketing Firm of the Year.  Wish us luck!  And let us know if you need help staying out of the rough in 2010!

About Tanya Blackburn

Tanya is a marketing/public relations enthusiast and former television journalist with a nose for news and a knack for simplifying complex information into easy to understand, impactful key messages.