Clubs appear to be taking a longer-term view when it comes to membership retention and attraction strategies in 2014 versus their approach between 2009 and 2012. This is the likely the result of several factors, including stabilization in the overall economy, an increase in the tools available to keep members connected to the club and one another and lessons learned from the discounting that took place in the period immediately following the financial meltdown. A recent Pulse Survey of the club industry conducted by McMahon Group found that roughly two-thirds of club executives feel attrition for this year will be unchanged or down from the prior year, while roughly one-third think it will increase. Although these figures don’t vary much from management’s views on attrition over the past few years, their responses to questions about their approach to these challenges indicate they are taking a different approach to membership retention and development.
Club leaders now view improved communications as their most effective tool for improving retention. Understanding that it is less costly to keep a customer than find a new one, managers are dedicating more resources to increasing member awareness of the club’s offerings and programs so they use the club more frequently and stay in the fold. In our 2011-12 Pulse Surveys, just over half of the clubs indicated they had a paid staff person in charge of communications. That figure increased to 74 percent in 2013 and now 80 percent in 2014—that’s commitment.
In a similar vein, other highly rated retention strategies include marketing to members, monitoring their satisfaction, improving facilities and adding new programs. As documented in Navigating the Future, the 2013 joint NCA-McMahon study on club trends, we anticipate continued growth in programming as a way to maintain member engagement. Where most clubs used to be rather hands off regarding utilization, they now see that creative programs are essential for drawing members to the club. This includes all manner of wine clubs, book groups, fitness classes and theme night dinners so members can make regular appointments to visit the club.
In regard to membership development, club managers tell us they are focusing much more on incentives to existing members and updating existing facilities than price based drives. This is a change from 2011 when the leading actions were discounting dues and lowering initiation fees. In our experience, the dues discounting strategy was short lived and often regretted by clubs that took this step. Once the height of the financial emergency passed, longstanding members began to clamor for dues equalization and when the new members were hit with rapid increases in their dues, they headed for the exits.
Looking through the lens of a better economy, particularly among the affluent segment that clubs serve, more and more clubs are seeing facility enhancements as one of their chief tools for attracting new members. Programming that is being developed needs to take place in purpose-designed facilities that are relevant to modern users. While it is possible to offer aerobics classes in the ballroom for a time, a club will eventually need a true exercise studio if it is going to meet membership’s expectations. This holds true with all the other hot button improvements of the times, including pubs and outdoor dining venues, full-service fitness, children’s activities rooms and resort style pools. Having bounced off the bottom, it appears the club industry is thinking more strategically and investing to grow—which is what ultimately drives the success of all businesses.
Frank Vain is president of McMahon Group, Inc., a premier full-service, private club consulting firm serving more than 1,600 private clubs around the world. He also serves as a director of NCA and chairs the Communications Committee. He can be reached at email@example.com. For more information, visit www.mcmahongroup.com.