Membership metrics A self-evaluative process
ECLUB NEWS |
What follows is an article written by guest contributor Rick Coyne, Chief Executive of Club Mark. Club Mark offers private clubs guidance on issues related to marketing and membership. Additionally, Coyne serves as the Chief Executive Officer of the Professional Club Marketing Association (PCMA. The PCMA "is the association for membership and marketing professionals at private clubs and is dedicated to providing contemporary resolution to complex club membership and marketing issues through information, education and networking."
Next to food and beverage, membership metrics may be the most misunderstood process in the industry. Here are three things that if not done well, can lead to a club's slow demise.
- Replacing members in pace with attrition.
- Retention of existing members. Aside from the 3M's (mortality, morbidity and moving away), the rest of the reasons for leaving are controllable.
- Having members, young and old, with children and without, with varying degrees of interest in multiple usage venues, using the club and finding value for their investment.
Several metrics are available to measure the health of membership but here are the basics:
- Annual attrition versus replenishment – Attrition is different depending on the type of club but averages around 6-8 percent of gross membership. If replenishment is not equal to the attrition rate, a negative impact occurs on everything financial within a club, including the per capita cost to those that remain.
- Growth versus loss by category of membership – Clubs should consider whether some categories gaining in popularity versus others. If so, is there a reason for this trend?
- Have entry fees been diminished to the point of limited to no capital reserves? If so, is price the only way in which a club can demonstrate relevance to its market?
- Age segmentation and family make-up of existing members and those joining over the past 7-10 years. This allows proper market positioning and relevant programming to meet new and old members alike.
To the more basic question, what resources have you committed to the membership process? As alluded to in the McGladrey article Measuring the cost of the dysfunctional private club board, if a club has not invested its intellectual and physical resources to the membership process, its lost opportunity costs are likely piling up at an enormous rate.
Lost opportunity costs occur when membership is relegated to discounts, incentives and other price related temptations (promotions) to force the market to the deal without intellectually understanding the market or the opportunities. Annual price driven programs damage brand, value and integrity, which may not be recoverable.
A sustainable membership process, involves the collaborative commitment of time, team and resource.
- Time – Give it the time that it deserves. Move from the annual event culture to creating daily relevance through every department within the club.
- Team – Hold each department head responsible and accountable for understanding the metrics for driving member replenishment, enhancing retention and increasing member usage and satisfaction.
- Resource – Resource is everything from the support and recognition of the board to a trained and responsible membership director to drive and coordinate the efforts of the department head team.
The real challenge is lies in driving the membership process from one vision, understanding the changing dynamics of today's market and the changing needs within private clubs. Unless a club's offering is relevant to its market, the price charged will not make a difference.
For comments and questions, Rick Coyne may be contacted directly at rick@Clubmark.com.