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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