1. Marketing Is NOT NECESSARY at Private Clubs (Common reasons cited by Board of Directors, Members and some Managers) This club should be exclusive, we don’t want everyone having access to the club Members will think the club is in trouble. It will no longer be PRIVATE!

2. We don’t want the club to be over crowded. We like to play golf without reserving a tee time or having to reserve a time one or more days in advance! If we have a lot of business in the dining room, we won’t get the individual attention and service we expect at a private club! Marketing Is NOT NECESSARY at Private Clubs (cont.) (Common reasons cited by Board of Directors, Members and some Managers)

3. Barriers to Membership Marketing in Private Clubs Board of directors reluctant to market clubs  Don’t want to upset long time members who cling to tradition of the club not marketing itself Marketing is a new area for clubs  only in the last decade

4. Experienced managers are unfamiliar with marketing strategies and what works in private clubs If they are not “Standing In Line” to dine at your club or use the other facilities you need to market! Barriers to Membership Marketing in Private Clubs (cont.)

5. Four P’s of Marketing Product  Type of Club Quality Type and number of services, amenities, etc. Price  Cost of Membership Initiation fee, equity portion, dues, menu prices, etc. Free service vs. fees per use items

6. Four P’s of Marketing (cont.) Promotion  Internal advertising to promote more member usage  Public relations to create image of good citizen in the community  External strategies to create awareness of Club for more Members Place  Location of the Club - Demographics of the area, Number of Businesses, Competitors, etc.

7. Trends for Private Clubs Most clubs do not have a waiting list for all categories of memberships (78%) Clubs are using more assertive techniques to pursue more member or to keep their waiting list “stocked” with prospects Clubs are offering more membership categories in order to increase and retain members

8. Trends for Private Clubs (cont.) Clubs are changing policies to make membership more attractive to different groups, e.g.: women members allowed to play golf on weekend mornings Many clubs are pursuing revenues from different sources:  Unrelated business income  Non-traditional income Clubs are using more assertive techniques to pursue more banquet and catering business

9. Trends for Private Clubs (cont.) A concern that unrelated business income may exceed 15/35% of the club’s revenue The IRS has indicated that the insignificant level for non-traditional income is 5% of the club’s total revenue With more families having dual income earners, there is a need for members to spend any free time they have with their families, including club usage

10. Health & fitness is no longer a fad, but a lifestyle for many especially the baby boomers. Clubs will need to add program, facilities, and items on the menu to accommodate this trend There are more members at private clubs than ever before, but the supply of new clubs has exceeded the demand or number of new members Trends for Private Clubs (cont.)

11. Trends for Country Clubs Golf is the most important activity to members and the activity most often participated in at the club Golf is the number one reason cited by members for joining the club Slow play is a significant concern among members, yet they want usage by family members to increase

12. Trends for Country Clubs (cont.) Clubs are reporting more outside rounds, which is attributed to more outside tournaments Although participation in tennis and swimming is much lower than golf, members cited these areas as an important reason for joining, especially for the family members

13. Non-golf activities (swimming, tennis and family programs) are more important to younger members (baby boomers) than older members Full service, state of the art exercise/fitness centers are being added by many clubs, not just a small room with a few pieces of equipment Trends for Country Clubs (cont.)

14. Importance of Marketing Survey conducted by CMAA (Club Managers Association of America) of its members found that club managers thought:  Marketing was a high priority  Selling memberships was very important Private clubs are experiencing a declining membership base nationwide

15. Reasons For Decline In Membership Size at Clubs Aging Membership  Many clubs had a closed membership during the 70’s and 80’s  40 year olds (prime time to join a private club) were not replaced  Members at these clubs are now in their 60’s and 70’s

16. Reasons For Decline In Membership Size at Clubs (cont.) Different Preferences for Baby Boomers  Clubs with a “gray” or “blue” haired impression are not attractive to potential 40 year olds  Preference for more casual dining than formal  Social tradition is not as important to this market Economic Downturn Across the Country  Businesses cutting back on entertainment expenses  Businesses closing or cutting management positions (potential members)

17. Tax Law Changes  Entertainment expenses initially decreased from 100% to 80%  1994 changes : entertainment is now only a 50% deduction and dues are no longer Overbuilding of Private Clubs  Real estate developments (country clubs)  Office buildings (city & city/athletic clubs) Reasons For Decline In Membership Size at Clubs (cont.)

18. More Competitors  More upscale and quality restaurants available, giving members an alternative for upscale dining  Hotels, convention facilities, and restaurants offering better banquet facilities and service Reasons For Decline In Membership Size at Clubs (cont.)

19. More Competitors (cont.)  High end daily fee golf courses Provide high quality services once only available at private clubs Course conditions comparable to private clubs and in some cases better Target market is avid golfers with high standards which has been the market for country clubs  These for profit businesses can and are much more aggressive in marketing their product than clubs are allowed to

20. Methods to Increase Membership Decrease initiation fees and or dues  Appropriate only if pricing is not in line with the Club’s position in the market place Temporary price reduction during special programs  Members only refer friends when a “special “ is being offered (Cherry-Pickers)

21. Incentives used for Member referrals  Repeat usage sends a message the Club is in trouble Rely on Membership Committee to be aggressive in pursuing more Members  They are use to being only processors of an application, not in identifying candidates for membership Methods to Increase Membership (cont.)

22. Membership Director Facilitates Members with the referral process Takes over the administrative responsibilities:  Collects paperwork: application, letters of recommendation, etc.  Sends materials, brochures, etc. to candidates  Gives tours of the Club  Follows up on applicants to ensure they join

23. Helps in identifying candidates: guests, executives, professionals, etc. Helps in matching up prospects with Members that may know or willing to sponsor them Implements more aggressive strategies if Member referral programs do not work Membership Director (cont.)

24. Research Project Questionnaire sent to 400 GMs nationwide that were members of CMAA Questions on marketing and membership activities 226 respondents - 57% response rate Respondents were from 42 different states Only 22% of the clubs had a waiting list for membership

25. Waiting List Information Clubs With a Waiting List (22%)  49 Clubs (22% of 226) had a median of 30 individuals on their waiting list  59% of the Clubs (29 of 49) with a waiting list reported their full or regular membership only had the waiting list (13% of all clubs)

26. Clubs With a Waiting List (cont.)  Only 41% of the Clubs (20 of 49) with a waiting list reported that all of their membership categories were full (9% of all clubs) Clubs Without a Waiting List (78%)  Median number of memberships still available at a club was 34 Waiting List Information (cont.)

27. Clubs With A Membership Director Clubs with a membership Director 37% Number of Membership Positions (83 of 226 Clubs)  One63%  Two19%  Three Plus18%

28. When the Position Was Created (83)  Less than one year ago (13)16%  One to three years ago (21)24%  Three to five years ago (12)15%  More than five years ago (37)45% Only 16% of all clubs (226)  21% of all clubs have added a membership position in the last 5 years Clubs With A Membership Director (cont.)

29. Position Type Full-time 72% Responsibilities exist in another department 12% Part-time (less than 30 hours) 6% Volunteer, board or club member10%

30. Compensation Median total compensation: $30,001 to $40,000 Median base salary: $20,001 to $30,000

31. Financial Incentives Reported  Commission based on number of new memberships 55%  Commission based on initiation fees generated 43%  Commission based on dues revenue generated 32%  Commission based on total club sales 11% Compensation (cont.)

32. Marketing Activities 83% - Members contacted for referrals 52% - Host member-guest parties 37% - Attend local community meetings for networking, i.e. rotary, etc. 25% - Direct mail to prospects, inquirers

33. 24% - Acquire mailing lists of new residents and professionals 16% - Acquire lists of tenants, corporations and companies 11% - Purchase mailing lists from professional associations & groups Marketing Activities (cont.)

34. Implications Private clubs have started to market themselves only recently, to compete with “For-Profit’s” and other clubs It will be common in the future for many private clubs to hire a membership director

35. Membership director’s primary role will be to identify prospects and make some type of contact with them and not “just” process membership applications Clubs are currently implementing a variety of external marketing activities and that will increase in the future Implications (cont.)