By. Phillip Martin, Senior Vice President, Troon Privé
Over the past seven years, we at Troon have been working hard on discovering a club’s Why and driving the marketing message on why the club exists. The Why is based on Simon Sinek’s best-selling book, “Start with Why,” and has been a popular subject in his Ted Talks and created videos. The logic is sound and elevating the marketing past the amenities of the club has produced solid results. In further analysis, the Why needs to evolve with the club to impact the financial statements. For example, the Why of some clubs is centered around the enjoyment of the members and the delivery of a consistent, high-quality member experience. However, when the financial statements are examined, the results are quite different. One reason for this is that these clubs rely on outside revenue to drive the focus and attention of the staff in order to create a sustainable financial model. For instance, over half of the food and beverage revenue at some clubs is driven by weddings and banquets. The clubs were built to drive this business and be the place for these types of events, and the end result is a food and beverage department that comes close to breaking even or making money. But at what price is this achieved? The focus and attention of the food and beverage team is on managing the outside business, which also dictates most of the capital spend on items that support the operation. At the same time, the member dining experience is far from a priority. The return on investment for the daily dining experience is far less than the banquet business. Or is it? It is well documented that the member dining experience is a key driver in creating promoters of the club. The Net Promoter Score (NPS) is a key statistic used by Troon in determining the health of the club’s culture. On a scale from one to ten, how likely are you to refer the club to a friend or colleague? If the member answers nine or ten, then they are considered a promoter. If seven or eight, then the member is considered a passive and at six or less, a detractor. The percentage of promoters is then subtracted from the percentage of detractors, thus giving the NPS.
If the club were truly living the Why, then the financial statements would reflect the focus. The food and beverage department would serve as an amenity and provide an excellent member experience at the club. The financial result would be different, but so would the dues line too. The club would invest in a Membership Sales Director instead of a Catering Sales Manager. The club would be open for members and not closed for special events. The long-term effect is a club that will continue to grow and reinvest in the amenities that provide members joy and an enhanced experience. The bigger question is how does a club change? How can you simply forego the Monday outings and big weddings that are so vital to the club? Change is difficult for any organization and in order to create change, leadership has to measure what is important and use a balanced scorecard as a lens. The member, financial and employee factors are all equally important in a sustainable club. The focus of increasing member dues and measuring through Full Member Equivalents (FME’s) or overall dollars is a great start. Growing the member dues ratio from 45% to 60% over five years with specific strategies will measure and keep momentum. The strategies encompass reducing reliance on outside events, using Mondays to further detail the golf course and creating programs for members on the weekends instead of closing for weddings. The focus on the results along with smart strategic solutions will create a change. More importantly, it will create a focus for the volunteer leaders of the club. Defining success and charging forward to reach the goals is crucial.
The recent world events are a good catalyst to create change. The pandemic created an environment where people are restricted on the ways they can be together. But since golf is a safe activity, the clubs that were open during the lockdowns saw record usage by their members. All of the clubs saw more rounds played in 2020 compared to 2019, despite most of them eliminating guest and outside play. The exclusiveness and safety of the club positioned the perfect storm for membership sales and the end result for most clubs is increased dues. The club’s that succeeded had an attitude that this is a great opportunity to be the solution for today’s environment. The future of clubs and leaders is dependent on living your Why. Find it today and the plan for the future will become much clearer.