Ten Ways #9

Know your Niche

I’m sure someone who really knows the history of Rhode Island golf can tell me why clubs fill the specific niches they do. Bankruptcies, rich members, obsessed club presidents, etc.

In the beginning (and at the end), the primary niche for every club is geography. People who live nearby join a club. Some people who belong to a club like it so much that they move closer. Some people move into a house with absolute knowledge of what club they are about to join. Nongeographic clubs must be very special indeed.

Then there are the more modern niches. Family vs. men’s club. Full service vs. golf only. High-end vs. midrange vs. semi-private. White collar vs. blue collar.

Regardless of your niche, as a club it’s yours. And it’s about impossible to change it. Your members joined because of the niche, they like the niche, and they want to keep it that way.

Except upmarket. There’s always a faction of members who want things to be much nicer. You need this to a certain degree. Otherwise the club will decay around you. But this can easily get out of hand, for example Valley Country Club whose $3M in clubhouse renovations probably sank the club.

Montaup has an interesting niche. Value golf (1600/year) on Aquidneck Island on a pretty good course. But wicked crowded during the summer (normally back to back from opening until 1130 on weekends) and prime tee times are by lottery. And semi-private most of the week with rules that vary in pain based on how eager they are for outside play. Food service is outsourced (though the club runs the bar). Minimal amenities. Yet they have maintained a 5+ year waiting list (called Associate Members — they get a slight better deal than the public for $350/year) even through the worst days. At 400 full members (and golf-only so these are playing members) they have double the membership of most of the other local clubs. They have been super successful in their niche. But their niche only exists due to the geographic isolation and lack of affordable public or private courses on Aquidneck Island. It’s actually similar to a lot of the non-elite private clubs in Scotland. If Crestwood or Segregansett tried the Montaup model it would fail miserably.

In general, you can take one step away from your current niche as a member-owned club. A privately held club can be more aggressive, but usually only if they can accept deep membership losses or financial losses (e.g. Hopkinton Country Club which went from a modest private club to quite upscale by pouring in money, executing, and being patient).

Unfortunately, the only direction member-owned clubs step in this area is upmarket (usually without the results they hope for) or downmarket (usually accidentally through underinvestment and service cuts). Any other pivot requires investment. Without a healthy waiting list and initiation fees, there just isn’t capital for investment in a new direction. Your existing members fight the assessment too hard — they’re reasonably happy with the current niche. And the new members won’t join until the facilities and services exist.

Know your niche, embrace it, exploit it, and mine it for new members.

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Crestwood Country Club New Ownership

So the news over the winter was Joe Moniz buying Crestwood. Now there’s a nice article in the Projo with more details. When I was there in July on a weekday morning the staff was very professional and the course was beautiful. And empty. It didn’t seem like 300+ members to me.

It’s rarely publicly discussed what happens with assessments as clubs fail. A $4300 assessment on top of $5000 dues is bracing.

I extend my congratulations, however, on their success. No wonder the other clubs had a tough time with new members this year, because adding 100+ people would suck dry most of the market. The $4K offer they had this winter was clearly the best offer from Providence to New Bedford. Good to see that people respond to a great offer. There was probably a substantial base of former members who had never joined another club and was happy to give new management a chance. Assuming minimal leverage, Crestwood can now be considered a survivor of the great shakeout.

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Ledgemont Sold

Those who don’t read the Jewish Voice missed a big story in RI private golf. Ledgemont (which was originally a largely Jewish country club — hence the newspaper) sold to Joseph and Paula Ruggiero. A member-owned club that at one point nearly 50 years ago had an enormous waiting list (which to some degree triggered the creation of Crestwood), they had been in financial distress for years. My wife used to get membership flyers in her work mailbox — points for originality though likely ineffective. They had been in discussions with Agawam Hunt about a merger, but what I heard of the proposal didn’t make much economic sense.

Lots of plans for renovations. And some very deep pockets. But it wasn’t lack of capital spending that hurt them — they had high dues and got squeezed in their market niche as the higher-end Providence clubs became accessible. The course and facilities were OK when I played it this summer. I prefer Crestwood or Agawam Hunt personally.

I do salute their board. They tried a lot of different tactics to recruit new members. And rather than wait for bankruptcy, they did something about it by preemptively selling. The core of the membership is likely intact, with stable dues and no more assessments going forward. It is probably as good of an outcome as can be expected. I’ll be curious to see what the new owners do in terms of innovative pricing models or services. There are certain things that just can’t be done in a member-owned environment.

I’m really curious what the other two local courses that Joe Ruggiero owns are.

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Ten Ways #8

Encourage Prospects at your Member-Guest

There are some good reasons to require handicaps at your member-guest. First is quality of the competition. A second frequently unstated one is to discourage marginal players. This makes total sense for a club’s multi-day invitational.  It makes sense for much, or even most of the schedule.

But its dangerous if you’re looking for new members. Face it, most of the serious golfers already have a club.  Its unlikely the average club is going to have such a difference in finances or quality to pull a happy member from a similar club. For the clubs we’re talking about, they’re limited to pulling from semi-private and marginal clubs.

“Hey, but we let people with no handicaps play”  “Scratch”.  Great, so you’re going to recruit someone whose initial experience is dragging their team 10-15 strokes off the competition. Embarrassing someone is a tough introduction.

Have 25-33% of your member-guest events friendly to golfers with no handicap. I can name a half-dozen people (my wife included) that I would have invited to events this year but there were no events to invite them to.  It may just be having a separate flight using Callaway system or something. Ever thought of just having a nice outing with great service, great food, etc. and leave the competition alone for the day?  I actually think handing out a couple hundred bucks in cash to the winning team is tacky, while it drives up the price of the event.

Many clubs are optimizing their member-guests around the desires of the most serious golfers in their current membership. All I’m saying is occasionally keep the big picture in mind.

 

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Ten Ways #7

Don’t insult your future members

So I play with a guy who had his wedding as an outside person at the club. I never really thought of it but a standard part of the package is a foursome or two for the groom, groomsmen, etc.  Years later he raves about the round, the wedding, etc. He lived out of the area for a while but when a transfer came back home he joined the club almost immediately.  He’s a good, profitable member who doesn’t play particularly often.  A great (and likely profitable) event planted a seed for many years of membership to come.

Its tacky to hand our membership brochures at a wedding (though note that I would strongly encourage them to be discreetly available to the nosy/bored/curious outside the locked business office or similar if you’re actively seeking members). What you need to be careful about is the total experience, especially execution and staff talk.  Execution is pretty straight forward — though recognize what counts here is not satisfied Bridezillas but whether it is objectively a well-run event.  Staff talk is a different story.  It is easy for staff to either treat guests poorly (as just a guest they’ll never see again) or inappropriately (over familiarity, over sharing, discussion about members or other staff), especially when guests are from a similar social and economic background of the staff.  The problem with telling my little druggie brother Timmie about what happened at the member-guest isn’t that it will affect him joining which was never going to happen.  It’s that I’ll overhear.  Or he’ll mention it at the boring brunch tomorrow at Aunt Sarah’s.

And I’ll go from “Honey, I bet we could float 6K/year” to “hmmm…..need to think some more”.

A small anecdote. I was playing at a nice local club using an online service. When I checked in, the pro didn’t know who I was and that his club was enrolled in the service. In fact, he had turned them down the summer previously  This was probably genuine — I didn’t realize they had just undergone a major management change. The old GM or pro may well have pocketed my greens fee. Or the online service was a bit “aggressive” in signing up clubs. He let us play. Sure, there’s a chance I pulled some clever scam on him. But the course was empty and I now have a very favorable opinion of the club. Hopefully they got paid.

Fancy clubs with long waiting lists can afford to insult their guests. Mine and yours can’t. Every interaction is with a potential member.  And if you treat my guests great that makes in harder to drop my membership come renewal time.

 

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Ten Ways #6

Guest policies
How many times a month do you let guests play? If you’re already letting outsiders play through boxgroove, golfnow, or similar, it should be at least 3-4. I would always prefer a guest playing with a member to a random person off the street. Most local clubs are at 2 times/month, a few still at 1. I know of a local club with less than 10 family memberships, yet about half the guys I know there have wives that play golf. During the peak months, they play twice a month with their wife and beyond that play at Newport National, Meadowbrook, Montaup, etc. That’s guest fees, cart fees, and dining coming right out of club coffers. And come family budget and renewal time rest assured that it’s “his” membership, not “our” membership.

My intuition is that a club is financially better off allowing unlimited guest privileges as long as tee time restrictions are in place with a fairly high guest fee. If the person really wants to play without the member, prime tee times, have a handicap, tournaments, etc., they’ll join up at that point. If you’re already playing 30-40 rounds/year that should be a small premium over the cumulative guest fees. If you’re not, you probably won’t join under any circumstances.

One special I never see: actively encouraging upgrades of single to family memberships mid-season. For golf-only mostly male clubs this has huge potential. Offer to credit all guest fees to the membership — even better, once you hit the threshold membership should be automatic.

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Ten Ways #5

Everyone Needs a Buddy
In a long waiting list private club this is unnecessary since the sponsoring members are expected to fill this role (or professional staff). But if that was the status of your club, you wouldn’t be reading this. The #1 way to get new members in the current environment is to make sure the people who just joined have an outstanding experience.

Why? Because your experienced members are stale. They didn’t just leave another club and so have a cellphone full of buddies to introduce to a better club. They won’t give their real estate agent a glowing report about how easy it was to get settled in a new town. Their children and spouses are immune to the lure of upgrades to a family membership.

In today’s conditions, I would merge the membership committee into the marketing committee and sprinkle in a healthy dose of retention. They are all one and the same.

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