Sunday, January 13, 2013

The #1 Mistake Private Clubs keep making

Remember the good old days?
Full membership rosters, initiation fees, Executive Chefs, Assistant Pros, massive club house expansions, new fitness facilities, and lazy rivers (yes, lazy rivers).
If 2002 through 2007 taught us anything, it was that:  Extravagance has a price.
I firmly believe 2008 through 2013 has already taught another valuable lesson:  You can’t save your way to prosperity…but many have tried by cutting corners in every imaginable area of their club.
With membership roles down, it makes sense to cut some of the bloat, but one area you should NEVER scrimp on is your CEO’s pay.
I am not saying this because I have a heart for PGA Professionals or Club GM’s (although I do), but more because you can’t make money by saving it when it comes to the clubs most critical employee.
I get that clubs, and for that matter, businesses in general, want fixed costs and unfixed growth, but saving 25-40k on a 2-4 million dollar budget by hiring or keeping a fair hire (at best) is just plain dumb.
Think about what 25-40k represents at the average club:  6-10 members, maybe?
If your club’s CEO is worth their weight in Pro V1’s, I bet they retain or gain triple that number easily…and poor ones do just the opposite.
“But nobody joins or stays because of the GM, it has to do with the quality of our course, the price of the dues, and the overall value they receive”.
I agree (that few say it aloud), but who is responsible for delivering that value?
I can show you the same club with two different GM’s and give you dramatically different results.  The devil is in the details.
A great CEO sets the tone for the entire organization.
  • You can see it in the way the staff greets members and their guests.
  • The way the carts are always meticulously cleaned.
  • The way the menu doesn’t have yesterdays grease spots or ketchup stains.
  • The way the bathrooms are maintained.
  • The way members treat their fellow members and the course in general.
  • The way the pro shop staff already knows a members size and style preferences.
All of this comes from the top.
Am I suggesting you go out and find a 95-120k GM when the industry average hovers around $70,000?  If your current one doesn’t bring that kind of value already, where you could honestly say, “yes, they easily justify that number”, then absolutely…because the money you are probably saving is costing you members, both potential and current.
I have seen this scenario repeated for the last twenty years in companies I have personally worked for.  The same company making the same products for every state in the union…with vastly different sales results.
The difference, as always, is the people in place touching the customers on a daily basis.

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