YOUR CLUB MATTERS
AUTUMN Issue Highlights
FROM THE EDITOR:
Welcome to our Autumn issue of Your Club Matters. Our aim is to bring news and insight to Club Secretaries and key management about some of the important topics in today’s club industry. We hope to offer you some ideas and help when it comes to your club, with interviews and articles from some of the club industry’s leading figures.
It is often said that it’s much more economical to retain existing clients and develop these than constantly seek new ones, so the content we present offers a short, sharp overview of Membership Retention – an essential and relevant topic today.
We also touch on some best practice strategy for attracting new customers, such as incentivising these to sign up for loyalty schemes, and the importance of transactional analysis. To do this we look at strategies in the UK and the US; we bring valuable insight from thought leaders such as Eddie Bullock and Jerry Kilby; and we include an NFS perspective on our solutions, and how they can help clubs to remain successful by leveraging integrated technologies.
It is important to remember that the trends we discuss in this issue are all driven by the state of the economy. It is unlikely that all of the points covered will be relevant to your business, but we hope you will find some that are suitable, and practical, for your individual business needs.
Because Your Club Matters.
Defining, Analysing And Implementing Membership Retention
Below we take a look at the definition of Member Retention, the reasons why Clubs need to focus on it, and successful strategies to perform this necessary activity.
- Maintaining and growing a company’s membership
- Increasing a member’s participation
- Expanding a member’s awareness of opportunities and services
- Recognising and valuing a membership – on the part of the operator
- Working to make members understand and value their membership
- Because members are the lifeblood of most Clubs
- Because as dues income goes down, costs of retention go up
- Because more time and money is spent in re-recruiting members than simply retaining them
- Because Clubs with the highest retention success rate tend to offer the most rewarding value for their membership. By implementing a Membership Retention strategy, the Club can ensure members know of all its services, products and opportunities at all times, and can allow members to be more involved
- Be in constant contact with members, through more than one channel
- Address members personally wherever possible
- Offer surveys to get feedback on the services provided
- If members are not coming to the club, get in touch and ask them why
How To Increase Customer Retention In An Unstable Economy
Did you know that the top 10% of your members generally provide around 50% of your turnover? Or that transactional analysis is key to retaining customers? Below we look why it is important to retain existing customers and how a Club can attract new members by incentivising them to sign up to loyalty schemes, and retain them through better understanding of their needs.
There is a level of uncertainty surrounding future membership strength, or dues income, and how this will affect every single aspect of Club operations. Experts believe new membership growth will remain under significant pressure – at least through the next recruiting cycle, if not longer – but there are some measures clubs can take to help ease this pressure and remain competitive in 2010.
While Club leaders focus on the business end of the industry, members cannot help but focus on the value relationship with their Club. It is said that new-generation members typically have less loyalty and/or historical ties to their Clubs, so they are likely to place more emphasis on the maximisation of dues value than any other matter. One expert declares: “Having small groups of new members with loose ties to the Club and unanswered questions about the value of services being provided is the greatest threat your Club faces in 2010.”
A Club’s most pressing responsibility therefore is to keep existing members in the fold, because those that joined in the past two or three years represent the greatest marketing asset on the Club books. They will be the ones sponsoring future new-member prospects.
How To Retain And Attract Customers?
Marketing budgets need to be spent more creatively during a recession, and Customer Retention and Development is a good place to invest these waning funds. The trick is to focus mainly on marketing to key customers.
Operators should focus on nurturing customer relationships in order to keep these customers once the recession has passed, and to do so need to implement certain tools which help to determine who their new customers are and to encourage similarly likeminded prospects to follow suit. New customers should be incentivised to sign up to existing loyalty schemes so that the operator can then identify who has become a loyalty scheme member and make them available for immediate analysis.
The two areas that are critical to successful customer development and retention include examining each new customer who joins the Loyalty scheme, in terms of who they are, what they like, and where they come from; and understanding new customers in order to develop strategies for retention when the recession fades away. This strategy can be as simple as adding new product lines or offering rewards to keep customers loyal.
Club operators should also seek to identify, through transactional analysis, customers whose spending is not decreasing. This data can be leveraged to create campaigns that help recruit similar customer types, in a bid to replace those who have moved away.
Finally, Club operators should keep in contact with lapsed customers throughout this unstable economic period so that they can perhaps be tempted back when the economy, and consumer confidence, recovers. Most importantly, the customer should not be neglected during this period of financial instability, and transactional analysis is the key.
Battle For Membership Retention
Here we look at how some of the larger Clubs in the US are handling Membership Retention, and some interesting points are raised. In particular, the point made by Boothe is an important one: that technology can be used to add value, to improve retention, to increase revenue and to cut costs. He also feels a website is a crucial tool.
Is your online presence relevant to your members and to membership retention?
In this current climate where golf courses are shutting down, private Clubs are losing members and golfers are playing fewer rounds, it is recognised that changes must be made to sustain growth, and the industry must improve its product and service offerings to survive the storm. “Status quo is going to be a tough place to survive from,” notes Paul Earnest, PGA Director of Golf at Four Seasons Resort and Club. “There’s an entire realignment going on.”
Dale Folmar, SVP of Operations at Dallas, Texas-based Eagle Golf, which manages eighty courses nationwide, says his company has seen more attrition in private Clubs over the past eighteen months than they’ve seen in the last ten years. “If private Club attrition increases, we’re betting that some of them will move down to daily fees,” he says. “They’ll just reposition themselves until the economy goes back
Golf courses are also working harder for customer loyalty. “Give them what they want or they’ll find it elsewhere,” claims Mark Viskozki, Director of Golf at Tangle Ridge Golf Club in Grand Prairie, also in Texas. “The public guy is looking for the best possible experience for the least amount of money. You can’t sacrifice on customer service. And you have to maintain the quality of the golf
Increasingly, Clubs are moving away from exclusivity and towards diversity. They are looking at attracting families by offering organised activities for children, casual dining and junior programmes for golf, tennis and swimming; they are altering their courses for shorter rounds; or have reduced their signing up fees, hoping to attract those ‘trickle-down’ members. All are exploring ways to boost revenue and this most benefits the consumer. “If you want to join a country club, now is the time,” says Jim Hinkley, CEO of Century Golf Partners, which operates twenty-six courses. “It’s easier to get in. Clubs are being more aggressive in offering reduced initiation fees.”
Steve Graves, President of Creative Golf Marketing, believes Clubs can retain and attract members during the nation’s economic crisis given that currently about 70% of private Club members quit within the first year of membership. “They do so for one of two reasons,” he said. “One, it’s more expensive than they thought, or two, it takes up more time than they thought.”
Bill Boothe, Director of Club Technology Consulting Services for RSM McGladrey, Inc. thinks technology can be an asset to Clubs during troubled economic times. “It can be used to add value to a membership, to improve member retention, to increase revenue and to reduce costs,” he says. He also feels a Club’s website is a critical tool, and urges club officials to keep their online portals as fresh and robust as
CONSULTANT’S VIEWPOINT: Jerry Kilby, MD of Kanda Golf and Chief Executive of CMAE
Membership retention is a key issue for the global Club industry, so the Editor interviewed Jerry Kilby to identify his views on this strategy, influenced no doubt by his work in the UK and the US. Jerry discusses the importance of offering members flexible payment methods and choice in terms of frequency and channel of personalised communications. He also believes Clubs should leverage good membership technology and be active in the community to improve non-members’ perception of the brand.
Kanda Golf Marketing Services Ltd, based in Petersfield, UK, provides business development and marketing consultancy services to global golf and leisure businesses. Combined, the company’s experienced consultants offer many decades of direct senior management experience in these industries and are committed to delivering a consultancy service that offers practical and measureable solutions for all types of Club business issues.
Kanda Golf also provides training and education services for professional associations and golf Club owners, operators and managers, which can be provided in many formats, including short presentations to business conferences, one-day seminars or longer, or in-depth business workshops.
Founded in 1993 by Jerry Kilby, Managing Director, Kanda Golf has continued to match the most experienced independent golf business managers to the needs of its clients and their respective business challenges. Kanda Golf’s client portfolio includes, in the UK: NFS Hospitality, Club Managers Association of Europe, The Royal Parks, The Lamberhurst Corporation, Institute of Direct Marketing and OPL Digital; in the US: Jacklin Design Group and Carnegie Abbey Club; in Europe: Associzone Italia Technici de Golfe, ClubManagerSpain and Gestores de Golf; and in the Middle East, The Wave, in Oman.
The editor caught up with Jerry to ask him a few questions relating to Membership Retention, and the industry in general.
Editor: What is your strategy for Membership Retention and do you think this activity is becoming more important in today’s climate?
JK: The retention of existing members must be perhaps the biggest priority a Club will have right now. Any campaigns to recruit new members will be wasted if existing ones leave and you end up with no net gain. Clubs that are providing flexible payment methods and those that provide their members options at different budget levels for those members who may only use the Club’s facilities infrequently will be the ones that retain more of their existing membership at the next renewal point. Stick with rigid policies and the Club will risk significant attrition of membership levels.
Editor: have you seen or heard of any interesting cases lately regarding membership retention in the golf industry, with specific reference to technology?
JK: In order to provide flexibility in membership programmes, Clubs need good software that can cope with different membership categories, each with different access rights.
Editor: What other technology-related trends do you see emerging in the Club industry?
JK: I believe personalised communication between a Club and its members and visitors will be an increasing challenge. However, that does not mean everyone should get regular emails or an SMS message; rather, a member or visitor should be able to choose how they wish to receive information from their Club – both method of delivery and frequency.
Editor : What should Clubs be thinking about in these unstable times; what should be their priorities and what technology should they be looking at?
JK: Clubs must get more active in their local communities and look at breaking down barriers that local people may perceive, as these may prevent them from thinking about joining the club. Clubs need to break down the perceptions that non-club members may have of their facilities. These could be social (old, stuffy, conservative, unwelcoming, elitist, male only, etc.), environmental (wasteful of resources, poor custodians of their land, etc.), or financial (too expensive, not value for money, etc.). When they do good things for their community (charitable events for example), Clubs should not be afraid to tell everyone about it through the local and regional media. Clubs also need to get active with local schools, colleges, youth clubs etc., and not shut doors to youngsters; they are the members of tomorrow.
NFS VIEWPOINT: Club Membership Retention: What’s The Solution?
The Big Challenge Faced By Clubs
In a time of recession – and with the average consumers’ perception of the economy being even worse than it actually is – Retailers and Leisure Providers have to work harder than ever to maintain a share of their customers’ disposable income as they contend with the rising costs of living. Non-critical expenses, such as fine dining, and Club memberships, are the first to be sacrificed.
In this battle for hearts and minds the retail sector has predominantly used huge discounts and constant offers of savings to entice consumers to spend. However, this strategy is not without its pitfalls. As consumers become more and more accustomed to ‘Sale’ prices, they also become aware that if they are willing to wait, eventually everything will be reduced.
What customers do want is value for money. With less money to go round they will restrict their spending to what is perceived to offer the most value. So instead of losing an individual member because they perceive a lack of value, it is preferable to up-sell or switch-sell by customising a membership to better suit that member’s needs and increase their perceived value.
Add Value, Not Discounts
Clubs are now competing more than ever, not just with each other but for consumers’ limited spend. In today’s difficult economic climate, offering value add to customers and members, as opposed to discounting, is vital. For Clubs, the potential benefits of adding value are that current customers can be converted into members, and existing members will not cancel their membership.
In the past, members often took the attitude that even if they were not making full use of a Club’s facilities, they would still allow a direct debit to run its course. Unfortunately this is no longer the case. With experts predicting that the recession may worsen before it recovers and that more doom and gloom may come, members are looking to get as much value out of their membership subscriptions as possible.
To increase the perceived value of a membership, clubs should look at:
- Focusing on the individual needs of members and customers; this is key in the constant battle to retain them as revenue for the Club
- Improving the client experience; this is paramount, and in turn increases the perceived value of membership
As Luis De Souza, Managing Director of NFS Hospitality, explains, “One of the most important facets of member retention is perceived value and benefit. Clubs that create, for each member group, a compelling case to sustain and develop the member relationship, will secure a higher level of loyalty and retention relative to Clubs that rely on assumed benefits.”
Strategy For Membership Retention
Club Managers faced with the challenge of Membership Retention could consider an immediate action plan, concentrating on the following areas of Membership Management:
Understanding Individual Members
Not only are Club operators in a battle to retain members, but the members and customers they do have are not spending as much as they used to. Consequently, operators need to understand members’ real reasons for visiting the Club by carefully analysing individual members with the technology they have available. Perhaps a member prefers the social aspect? Or the fine dining experience? Or perhaps they are a member of a golf Club because they just want to play golf. Armed with this information, Club managers will be in a better position to deliver the all-important personalised services to their members.
Eddie Bullock, Golf Management Consultant, advises Clubs to look deeper into their membership and invest more into internal marketing strategies for the future. “Many Clubs need to become more transparent with their membership and find out what their members want, and plan to provide it for them,” he says.
Online Surveys, such as Survey Monkey, are good Sales Intelligence tools that help determine how a Club can give the best value in the services they offer, or the prices they charge. Managers using these tools can also link membership expenditure to benefits that are trackable with Loyalty programmes.
Personalised Customer Service
Good Membership Management will help Clubs deliver a more Personal Customer Service experience with the help of clever CRM and focused Sales Intelligence. This translates to increased sales figures, and also affords the Club a higher chance of retaining its members. By knowing members and guests, understanding their preferences and analysing trends, Clubs can quickly identify those memberships that are at risk.
“It is essential that managers in the Club industry manage and motivate their teams into an improved service culture. You will have a richer and more successful business operation once a customer service plan is implemented,” says Eddie Bullock.
Customer Relationship Management
Good Membership Management should include CRM capabilities that capture and analyse customer information. CRM affords the ability to monitor trends and spending habits and target those essential areas for marketing campaigns.
Sales Intelligence helps bring a greater understanding of the business, from analysing data and reports to establishing Key Performance Indicators, allowing Club operators to proactively address members with personalised services before subscriptions are cancelled and revenue is lost, and benefit from up-sell, cross-sell and switch-sell opportunities discovered by Sales Intelligence technology.
“The introduction of Sales and Business Intelligence solutions gives huge scope to up-sell,” notes Steve Salter, PGA Professional and Head of Golf & Leisure at NFS Hospitality. “Reporting on and targeting specific groups using these applications increases revenue for the Club and also gives members and customers exactly what they want.”
The technology should then produce quality Reports about all aspects of this gathered data, including Member Type, Member Expenditure Patterns, Member Profile and Member Privileges. All these reports should play an important part in the Membership Management process.
What’s The Solution?
If the right member-facing technology (i.e. online booking, F&B, Retail) is in place, then the interface between the Club and the member will offer a more seamless and positive experience; and this boils down to an integrated solution that manages members as well as other areas that members experience, such as F&B, Retail and Reception.
Luis de Souza believes Clubs should look at technology as part of solving the Membership Retention challenge. “In order to manage the complexity of changing membership types, packages and countless product combinations, flexible and stable software applications are invaluable,” he states. “Packages, service bundles and promotions can make a Club stand out from the crowd and offer members and customers a reason to join, and to keep coming back.”
In summary, Membership Retention is about:
- Understanding the individual members needs and habits
- Identifying those members at risk
- Delivering exactly what members want plus a little extra
- Increasing the perceived value of a membership
- Delivering a seamless, personalised service
- Creating good reasons for members to keep coming back
A successful Club will make this happen, and reap the obvious benefits.
The London Golf Club Selects NFS Technology To Help Expand Its Leisure Business
Brands Hatch, in Kent, is not only home to the motor sport – it also boasts The London Golf Club, home to two Jack Nicklaus designed golf courses: the Heritage and the International, which entertains 55,000 rounds of golf annually and has hosted four European Seniors Tour events, and the European Open in 2008 and 2009. The London Golf Club also has a significant corporate hospitality and events business which is considered an important revenue stream and contributes to the Club’s successful operation and utilisation of facilities. Consequently, The London Golf Club has to address the needs of its international visitors as well as its high-end membership.
Heath Harvey, the club’s General Manager, has been in the golf industry for over ten years, both on the sales & marketing side and in general management, and has worked at prestigious clubs such as Stoke Park and Wentworth. He feels that: “Today a Golf Club is more than a club; it can be a thriving business.” Through his leadership, the London Golf Club is now evolving into a successful golf and leisure business.
Heath lists the important catalysts for this development as:
- An enlightened approach to Golf Club management
- Adopting the right technology solutions
- Placing better customer service at the top of the agenda
Heath says, “After fifteen years of using the same management system, it became clear that The London Golf Club was evolving into a multi-faceted golf and leisure business, and our system needs were changing with this evolution.” Thus the Club set about choosing a best-of-breed solution to manage its varied operations.
“The business needed to address a broad spectrum of requirements, from a complex corporate membership structure through to extensive hospitality during tournaments,” explains Heath. The solution he chose was NFS’ IBS Golf Club Management platform. NFS began installation of the application in August 2009 and it is expected to go live mid-October.
“The London Golf Club’s requirement to offer our customers a seamless experience meant that we were forced to investigate market-leading management systems that would allow us to stay ahead of the game and deliver the highest levels of customer service,” Heath adds. “We believe that IBS will allow us to do this.”
Steve Salter, head of NFS’ Golf and Leisure Division, has knowledge of the industry both in the UK and internationally, and joined the NFS team as a PGA professional. “The IBS product is a perfect fit for The London Golf Club, with reassuring end user and management functionality,” he comments. “The Club needed a robust solution able to handle its huge throughput of business, from European Tour Events, to weddings, to large corporate and society golf days. NFS have delivered with the club management solution by IBS, offering them all of their comprehensive requirements in one modern solution.”
More and more Clubs like London Golf can now benefit from this market-leading club management solution, which currently has over 1,500 Club users in the US. Implemented and supported by NFS Hospitality in the UK, the IBS system delivers wide-ranging functionality, including a web portal for members to view and drill down on their statements; automatic emailed statements that reduce Clubs’ monthly costs; built-in loyalty schemes and intuitive interfaces that track buying preferences, thus reducing member attrition; and a live dashboard that gives management teams an ‘at a glance’ view of the day-to-day running of the Club, with fully customisable reports and charts.
Steve believes that the way in which Clubs are managed is changing dramatically. Historically, General Managers and Club Secretaries had annual subscriptions flowing in, joining fees paid and endless waiting lists. “Now they need to generate new revenue and fill the void of membership fees and subscriptions,” he notes. NFS’ new solution by IBS helps this effort by offering managers an opportunity to drive business in other areas of their Clubs, whilst using tools within the product to help retain existing members and provide the extra level of service required to offer more added value – an important factor in membership retention.
“IBS is everything a club manager would expect from a modern piece of software,” says Steve. It offers full online member interaction from accounts to tee times; dashboard views of Club activities from any web-enabled PC; and automated emails, from members’ statements to management teams’ sales reports. “Let NFS and the IBS Club Management System take the strain out of Club management, so your time can be used more strategically,” he advises.
NFS Events 2009
NFS Hosts Golf Event At The London Golf Club
The first in a new series of Golf Events hosted by NFS, the NFS Hospitality Product Launch Golf Day, took place in October at the London Club, NFS’ flagship site and home to The European Open. Leading names in the Golf Club industry enjoyed 18 holes of golf and dinner in the restaurant.
The event was based around NFS’ launch of the IBS integrated golf management solution in the UK and EMEA, and was located at the London Golf Club – their first IBS Golf customer. It was well supported and attended by many of the leading operators and industry leaders in the global golf club market, who had the opportunity to view, first-hand, the new club management solution by IBS. This new solution, called .nxt, is available exclusively through NFS Hospitality, implemented by their experienced team and supported by their 24/7 UK help desk.
Integrated Business Systems Inc. (IBS) showed commitment to the NFS Hospitality business partnership by having their directors fly over from Richmond, VA for the event. Anthony Strange, Owner and CEO of IBS, Paul Newell Co-Owner, and Kevin Pillsbury, Executive Director, all made the trip to The London Club. With such a great venue and company, all three of the IBS directors were delighted they made the trip for this successful day.
The NFS management team and The London Club team created a great environment and atmosphere at the club. The course was in fantastic condition and the food & wine were a perfect accompaniment to the golf.
Steve Salter, Head of NFS’ Golf & Leisure Division and PGA Professional says “Our relationship with The London Club and its management team is flourishing. They are just as excited about working together as we are, and we are all keen to make this project a massive success. The demands of their business are great, but this is equally matched by our fifteen years of industry experience, and our market leading solution by IBS.”
John Holmes, Operations Manager at Reigate Hill, won the individual competition with 38 points. His prize was a fourball at The London Club. Richard Simmons, editor of Golf International Magazine, came second with 34 points, and won dinner for two at Langan’s Brasserie, one of NFS’ fine dining customers. Andrew Tanner, secretary at Sonning Golf Club, came third – also with 34 points – and won a night’s accommodation in a premium London hotel, also an NFS customer.
Champagne was on offer to the winners of the team event and the first group out were the winners. Some inside information may have given them the edge as Jamie Abbott, Daniel Wood, Mel Thomas and The London Club’s own Adrian Simmonds scored 88 points to take the title.
“To have such a prestigious club like The London Golf Club host our first golf event was amazing,” comments Steve. “This European Tour venue is a Jack Nicklaus design and offers challenges to golfers of all levels. The NFS Golf event was a unique opportunity to showcase the amazing golf course, the outstanding service of the London Club hospitality team and of course the new NFS technology being implemented by the Club,” concludes Steve.
Please email firstname.lastname@example.org to find out more, and to be kept up to date about similar NFS events.
NFS Announces Upcoming Webinar
At the end of November, NFS will be hosting the first in a new series of Webinars aimed at Club operators. The webinar will essentially focus on Loyalty and Retention in the Golf and Private Club sector and will advise operators how best to implement these strategies in their businesses.
The last 12 months have been challenging on many fronts for the club industry. In addition to having to cope with a drop in revenues, many of us have had to make cost reductions, and frankly the banks have been only too happy to take a back seat in a time of great need! But then, did we expect anything else? The ball in is our court and we need to take the steps to drive up revenues and deliver the best possible experience and value for our customers.
I hope the contents of this Newsletter will help you to do just that: focus on best practice, the best ideas in driving revenues and most importantly, developing a plan to move your business forward positively as we see the recession starting to ease.
I wish you every success in developing your business and hope that you will contact NFS Hospitality if there is anything we can help you with in relation to technology and business consultancy.
Luis De Souza
Tel: +44 (0)1920 485 725
NFS Hospitality Corporation
We hope you enjoyed our Autumn Issue of Your Restaurant Matters.
To help us improve our next edition, we’d like to know what you think.
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