Pardon the Disruption
“We cannot solve our problems with the same thinking
we used when we created them.”
– Albert Einstein
“Disruptive innovation” has been a buzz phrase in several industries: hotels (AirBnB), transportation (Uber), food service (Blue Apron), retail (Amazon Prime), Technology (Waze), Entertainment (Netflix), office space (WeWork) and even airlines (Wheels Up)…to name a few. In the golf industry, there are also disruptors like TopGolf.
Yet, when we think about our club members we often forget how they actually work and live their day-to-day lives, as evidenced by the success of these disruptive innovators.
Our members are consumers in those industries, and chances are, of at least some of those services and companies I mentioned as well. Their needs and wants have evolved to push those industries along the path of evolution. It’s all about health, wellness, networking, convenience, comfort, and personalized service in a casual environment.
What this means for private clubs is that the members and potential members want the club to fit into their lifestyle. They will not join or use a club that forces them to change how they live and work.
Besides the few clubs enjoying a wait list to join, there are more struggling with member retention and attraction and some are beginning to panic due to their resultant financial situation. Some of the ‘panic’ decisions being made are akin to what we saw during the Great Recession: massive labor and expense cuts, deferred maintenance, slashed or eliminated initiation fees, and increased involvement by the Board at the expense of seasoned management staff.
The end result of these decisions, of course, was often deterioration of service, lack of capital funding, and mismanagement. Together these issues further exacerbate the club’s financial position, rendering them unable to remain competitive.
A club study* released several years ago highlighted how clubs could remain ‘relevant’. A summary of findings is shown.
When we think of disruptive business models, outsiders or entrepreneurs are usually leading the pack. Traditional business models are slow to adopt the innovative ideas and operating models until the disruption proves to be a success.
These innovative ideas to keep clubs relevant are beginning to take hold: programs geared towards making golf casual, quicker, and more fun; beacon technology for more personalized service; providing work spaces; more casual dining and delivery … the list goes on. The key right now is to remain relevant.
Potential members are abstaining from joining clubs because they are choosing not to; not because of a layoff or other lost income.
Clubs with a high value proposition have a wait list. The innovative companies listed above are not successful due to a low price specifically--they are serving a need.
It is crucial for club leadership to look at the last bullet of the graphic above: standards adapted to members – shift attitudes, embrace innovation, upgrade facilities and understanding members’ needs. Before making emotional decisions, I challenge you to take a step back and consider a few best practices to remain relevant as shown in the illustration, and I’ll add one more:
A strong social media presence. Instagram tells your story. Facebook creates opportunities to share your member experience. If 40 – 60% of your new members will come from your existing members, what tools are you providing to this built-in sales team to carry your message? Millennials specifically are accustomed to seeking ratings for products and services.
Technology has brought about a much faster evolution of how our members live and work and therefore what they want from a club membership. We must be adaptable and flexible; thinking differently than we have in the past. If we are going to truly create clubs of the future, it’s time to better understand and accommodate our modern members.
Cutting is not the answer--investment in your club to create a higher value proposition is.
*VCT/National Club Association
This article originally appeared in BoardRoom Magazine, Fall 2017.
Whitney Reid Pennell, president of the RCS Hospitality Group (formerly Reid Consulting Services) is a celebrated management consultant, educator and speaker. RCS, the creators of the Food and Beverage Boot Camp™, specialize in operations consulting, strategic planning, food and beverage management, and training programs.
For more information, phone (623) 322-0773; or visit the RCS website at www.consultingrcs.com.