Posts Tagged ‘Golf Management’

Save Your Golf Club From This Economy By Not Following The Conventional Methods of Marketing!

: September 11th, 2009 : MAN : Comments Off

Golf courses across the country are closing down and going out of business across the United States of America at a awfully startling rate. Florida, the state with more golf clubs than any other state, is seeing this more and more. A lot of these “failing” golf communities are blaming the economy, and some are even blaming the current state of the golf world in general; but I see things differently, they should be pointing the finger at themselves.

The golf industry is behind the times in almost every aspect of running a business in this day and time. Most golf courses still have a website that provides no information and looks like something that my 12 year old daughter could create in a few hours. These golf clubs need to embrace technology and develop a website that both promotes AND generates business. There are a handful of golf marketing businesses that specifically create websites to help generate more business for golf courses and their individual needs, why aren’t more clubs taking advantage of them?

Another way the golf industry is behind the times is simply marketing in general. Look at how much golf courses are promoting themselves. Are they even realizing the amount of effort that their current staff is putting into promoting their golf club? The average golf resorts do the following things which they call “marketing”.

  • They place a black and white ad in the town newspaper showing how they just discounted the price. This only gets them into discount wars with their competition which only causes them to lose MORE money. They should instead be finding things that they are good at and promoting their business on those subjects so it drives more people to the course to take advantage of the things they do best.
  • They place an ad in the yellow pages and local phone book that unfortunately looks like every other ad. Honestly, with the invention of search engines such as Google and the amount of people who use the internet these days, how many people do you think still use the phone book to find information when they could just power up their computer, type in a search term, and have the answer to their question quickly? The answer is almost no one! These clubs that are spending thousands of dollars a year on this single ad could be directing that extra money towards something more beneficial such as a website or direct mail campaign like I mentioned above
  • They place an ad in the local penny saver.  Once again, something that is proven to be ineffective in this day and age. Instead they should be looking at fusion marketing techniques and working with other local businesses to promote their club. They could easily go to the local Chevy dealer and give away a free round of golf with every car purchase. Not only will the dealership easily accept this offer, but it will get new people, with MONEY, at the course and they will easily make up the lost green fee revenue by the new players paying for a cart fee or eating after the round at the club house. They will even convert some of these players into returning players, which will boost residual income. Think about that for a second, if they charge forty dollars a round, and the new players plays on average ten times a year, they just made an extra four hundred dollars off green fees alone. If you get 20 new players a year from the car dealership that’s an extra $8,000 a year from a simple green fee promotion with a car dealership!

Another way golf communities are slowly killing themselves is with real estate. A lot of golf communities that were prospering in the early 2000’s are now drowning in a sea of debt because of unsold lots, unsold homes, and not enough members. What can they do to correct this problem? Let’s look at what Juliette Falls, which is a Florida Golf Resort, in Dunnellon did. They first got a world-class website from a company named Legendary Marketing. They built their website into something that looks very good and promotes exactly what they do. Well guess what, the economy dropped off and now they have over forty homes that are in the price range of $500,000 to more than a million and no one was buying them. How can they turn this around? They came up with an incredible promotion that is how! At Juliette Falls you can stay in a Florida Luxury Golf Home worth over a million dollars, play a round of golf, enjoy the onsite spa and eat at a fancy restaurant for $199 a night. If they sell only one night for every day of the year, that is over $70,000 in additional revenue for the resort AND they get new prospects and leads at the course every single day which they can use to promote to in the future! Why aren’t all the golf communities thinking this way?

As you can see, the golf industry is slowing killing itself by being behind the times in technology, marketing, real estate and a host of other things that will be addressed in a future article. If you are a member of a golf course, or even better part of the members committee, stand up and bring attention to the actions your course is taking. Tell your club they need to break the mold of what they have been doing because it isn’t working. Make them think outside the box! Make your golf resort management company become accountable for the actions the club takes! It may be the only thing left that can save your club!

Why Is Your Golf Club Offering Refundable Initiation Fees?

: September 7th, 2009 : MAN : Comments Off

Private Clubs have historically generally structured their golf membership offerings to include a provision for the return or refund of all or some portion of the initiation fee/ new members pay to join a golf club.

This initial payment is subject to certain terms and conditions as set forth in the club’s membership plan and by-laws. A frequent scenario provides a refund to a resigning member based on some formula, such as for every 3 or 4 new members who join; one resigning member receives a refund. This formula continues until the club reaches its membership cap after which resigning members are repaid on a one to one basis. Additionally, sometimes the continuation of the payment of dues is required in order to receive a refund.

Can you answer this one simple question?

Every single week I speak to a private club experiencing the same problems with membership. To gain an understanding of their situation I ask a series of questions that include the initiation fee required to join the golf club. The majority of time, there is a provision for the return of a fraction or in some cases all of the initiation fee that is required. I then start to inquire about the business reason behind the membership initiation fee structure that is currently in place and I typically get a response like, “I do not know of the reason” or “that is something I have never really thought about” or “that’s a good question”, or they will get uncomfortable about the question I have asked because no one at the club really has an answer to this question.

Your golf club has the wrong kind of waiting list!

The return of an initiation fee can make sense if there is a sound business reason behind the plan and it works very well if the club is in a great market and is enrolling new members at a rapid pace. However, more often than not, membership enrollment speed will begin to slow long before the golf club has reached a full complement of members and members who have decided to resign cannot be repaid at the time they wish to resign.

And membership resignations will always occur. Even in the finest of golf clubs, attrition rates are six percent or larger as members in many cases, even if they are totally content with their golf club, resign due to relocation, problems with their health, change of employment, and other interests. And, as noted earlier in this article, they may even be required to continue to pay for dues in order to receive their refund payment.

This leaves the golf club in the undesirable position of having a waiting list to leave the golf club, which not only poses a large significant financial hurdle, but also is a deterrent to having new members join.

How can I get my golf resort out of this mess?

Now, there are solutions to getting out of a situation like this including:

  • Establishing new categories of membership.
  • Providing the refunds to resigning members at a reduced amount. This would usually require consent from the member or members.
  • Establishing a means for members to lease their membership or designate a beneficial user.
  • Establishing a non-refundable membership.
  • Making changes to the golf clubs by-laws.
  • Creating a re-callable golf club membership.

However, caution must be exercised at all times. Trying any new approach without carefully considering the many factors involved including clearly understanding your market and where your golf club fits in it, your competition, your approach to prospecting for new golf members, your enrollment and attrition rates, what you are permitted to do legally, and the effects the changes may have on the golf club’s financial stability, may actually turn a bad situation into a worse one.

Why you should get professional assistance now!

Does your golf club currently have a list of members waiting to leave the club? Are you just starting a new golf course and structuring your golf membership offer? Does you golf management firm have a golf membership sales plan in place to preserve your current members as well as bring in new ones? Do not simply believe that the way golf membership plans have been set up for decades is the right approach for you. Don’t fall into the trap of short term thinking or advice from well intentioned friends or Board members who are not professionals with experience in the membership or club business. The decisions you make today have a considerable impact on how successful or not your club will be in enrolling new members 3 or 4 years from now.

How Offering Refundable Membership Initiation Fees Can Hurt a Golf Club

: September 4th, 2009 : MAN : Comments Off

Private Clubs have historically generally structured their golf membership offerings to include a provision for the return or refund of all or some portion of the initiation fee/ new members pay to join a golf club.

This initial payment is subject to defined conditions and terms as set within the golf club’s membership plan and by-laws. A common scenario provides a refund to a resigning member based on some formula, such as for every three or four new members who join the golf club, one resigning member receives a refund from the golf club. This formula continues until the club reaches its membership cap after which resigning members are repaid on a one to one basis. Additionally, sometimes the continuation of the payment of dues is required in order to receive a refund.

Can you answer this one question?

Every single week I speak to a private club experiencing the same troubles with membership. To gain a complete understanding of their particular situation I ask a series of questions that include the initiation fee obligatory to join the golf club. The majority of time, there is a provision for the return of a portion or in some cases all of the Initiation Fee that is required. I then question the business reason behind the membership initiation fee structure that is in place and I typically get a response like, “I really do not know” or “that is a good question”.

Your club has the wrong kind of waiting list!

The return of an initiation fee can make sense if there is a sound business reason behind the plan and it works very well if the golf club is in a great market and is enrolling new members at a quick pace. However, more often than not, membership velocity begins to slow long before the club has reached a full complement of members and members who have decided to resign cannot be repaid at the time they wish to resign.

And membership resignations will occur. Even in the finest of clubs, attrition rates are 6% or greater as Members in many cases, even if they are totally satisfied with their Club, resign due to relocation, health issues, change of employment, and other interests. And, as noted earlier in this article, they may even be required to continue to pay for dues in order to receive their refund payment.

This leaves the golf club in the unpleasant position of having a waiting list to leave the golf club, which not only poses a huge significant financial hurdle, but also is a deterrent to having new members join.

How can I get my golf club out of this mess?

Now, there are solutions to getting out of a situation like this including:

  • Establishing new categories of membership.
  • Providing the refunds to resigning members at a reduced amount. This would usually have need of consent from the member or members.
  • Establishing a means for members to lease their membership or designate a beneficial user.
  • Establishing a non-refundable golf membership.
  • Making changes to the by-laws.
  • Creating a re-callable golf membership.

However, caution must be exercised. Trying any new approach without thoroughly considering the many factors involved including clearly understanding your market and where your club fits in it, your competition, your approach to prospecting for new members, your enrollment and attrition rates, what you are permitted to do legally, and the effects the changes may have on the club’s financial stability, may actually turn a bad situation into a worse one.

Why you need to get professional assistance now!

Does your golf club currently have a list of members waiting to leave the club? Are you just starting a new golf club and structuring your golf membership offer? Does you golf course management company have a membership sales program in place to preserve your current members as well as bring in new ones? Do not simply believe that the way golf membership plans have been set up for decades is the right approach for you and your golf course. Do not fall into the trap of short term thinking or taking advice from well intentioned friends or board members who are not professionals with experience in the membership or golf club business. The decisions, plans and actions you make today, this month or even this year could have a considerable impact on how successful or not your golf club will be in enrolling new members three or four years from now.

Does Your Golf Club Have a Business Plan for 2010?

: August 25th, 2009 : MAN : Comments Off

As we enter the final months of 2009, your golf club should be well on its way if not finished with its Business Plan for 2010. Yet, I find that in most cases golf clubs have not yet even started the process. When I ask why the plan hasn’t begun, I hear a litany of amusing responses, well actually unfounded excuses. A sampling of the feedback includes:

  • We can’t start a new budget when we don’t have final numbers for 2009.
  • We haven’t decided what we are going to do with our operation in the off season.
  • We’re too busy during this time of the year.
  • We’re afraid of what it might look like.
  • We’ve tried that before and it did not help us at all.
  • It takes way too much of our time and we don’t ever use it for anything.
  • Our golf management company needs to be involved.
  • Our golf marketing companies’ pricing isn’t set in stone.

Any of this strike a chord? Be completely honest now!

The reality is that many golf clubs either don’t have the skills, commitment, discipline, or desire to put together a plan. Planning is a lot of work! Very hard work! But like any other hard work well done, it provides great benefits.

A forward thinking approach with a financial plan in place for the entire year and updated on a quarterly basis with a forecast with a focus on creating the future is a paradigm that any successful business utilizes. Yet, I find that in most cases golf clubs do little more than take a perfunctory look at the numbers from the prior month usually about 15 to 20 days if not more after the month has ended.

I have seen amazing transformations in the actions Clubs take when the financial realities of their business are made known to them in black and white terms with a well thought out financial plan and a forecast of the future business. I’ve implemented forecasting where it previously wasn’t utilized and immediately new plans were developed for better expense controls and the marketing ideas became number one priorities instead of just “when I get to it” afterthoughts.

Directing focus towards creating the future through a thorough, well crafted business plan is what separates great operators from marginal and poor operators. It the difference between swimming strong toward a destination and just drifting with the current. It reminds me of a passage from the movie Alice in Wonderland. When Alice encounters a Cat during her travels, she asks the cat for advice on the road she should take. The Cat responds by asking Alice where she would like to go. Alice responds that she really doesn’t know. The Cat responds by telling Alice that if she doesn’t know where she wants to go, then the road she takes really doesn’t matter. Do you know where you want to go in 2010?

You must have goals. Making a proper financial plan is more than just crunching numbers. There is a lot of work that must be done in order to get the proper foundation to plan. A solid financial plan is the final results of a thorough Business Planning process which includes:

Components of a thorough Business Plan include:

1. SFSWOT Analysis

This is analysis of each Club department’s and the Club’s overall

  • Successes
  • Failures
  • Strengths
  • Weaknesses
  • Threats
  • Opportunities

 

It provides a critical self assessment of your Club and provides a great foundation for goal setting for both qualitative and quantitative improvements in the upcoming year.

2. Competitive Analysis

Who is your competition? How much do they charge? What is your unique selling advantage?

3. Membership Planning

What are your Club trends for both membership enrollment and attrition by category? What real growth do you want to plan for in 2010? What has been the trend with downgrades and upgrades? What are you doing with the golf club Initiation Fees? Do you have enough financing in place? How will you handle your wait list to join? How will you handle members wanting to resign?

4. Pricing Plan

What price increase will you take this year and when? Will member dues need to increase? will members agree to pay the new few? How will you price your golf cart and guest fees? What about F and B. Remember, except for a very few elite golf clubs in the country, cost does matter.

5. Payroll Planning

What payroll increases are you authorizing for the Club’s employees in 2010? Are the increases performance based or just “no thought” across the board raises? Can your golf club afford to give salary increases? Do you have incentive based compensation plans in place or do you just pay for showing up regardless of the job performance?

6. Expense Planning

What expense increases are you anticipating? Have you reviewed each department on a line item basis to determine if the expenses may have significant fluctuations up or down? Items that can change considerably include utilities, fuel cost, property taxes, fertilizer, chemicals, and general liability insurance. Have you reviewed these thoroughly to ensure you have an accurate view of the expense side of the financial plan?

7. Marketing Plan

Do have a written quarterly game plan for driving the revenue sources that are important to your Club? Are there specific timelines and people assigned to carry out the plans? Did you budget enough money for marketing to achieve the results you will need? Check out our industry best website solution for Private Clubs at Private Club Commander

8. Retention Planning

Do you have a comprehensive calendar of events that appeal to all segments of your membership to keep them using the Club and providing needed revenues. Is your calendar planned ahead at least 3 months at all times? Or are you trying to come up with things at the last minute because the newsletter copy is due?

9. Qualitative Improvement Planning

Do you have a written quarterly plan in ever department for qualitative improvement? Specifically, are you challenging all of your Club departments to implement 2 or 3 initiatives that either create a better member experience, provide for improved employee efficiency, introduce a new product or service, or produce a better financial result?

10. Capital Planning

Do you have a written capital replacement plan in place for 2010? Replacing depreciated assets on an annual basis is a component of a successful business. Do you have the necessary money to replace what is needed in 2010? Are you going to finance or lease needed equipment? Have you done the analysis? Is your plan at least looking ahead 5 years?