Between all the noise from COVID and the elections and the deterioration both have created to normalcy, its sometimes difficult to focus on anything other than day to day survival. Yet, focus we must!
From most industry estimates, clubs have done reasonably well thus far in weathering the shutdowns and restrictions but will that last? What will the next administration’s policies do to the business climate? and the financial well being of members.
While some estimates suggest 60% of clubs have maintained or done better through COVID, even if true, how valid are these COVID related calculations as we emerge? What are members thinking? How are they being affected and what are their fears in 2021 and beyond? These are the strategic questions we should be asking.
Clubs, by their nature are communities. The greater the social interaction and sense of community, the greater the member’s bond. Through community, trust and confidence become inherent. Proof of this is evident in the 95% member agreement that clubs are handling the COVID crisis accordingly. They trust their club. Maybe this explains why 60% of clubs have had minimal negative effects. Clubs are a safe haven. As 2021 unfolds, will it be enough to hold membership together? How will the vaccine and pace of the vaccine be received in the context of the overall membership?
Some readers may find this narrative disturbing, seeing clearly and knowing what your members are thinking is the first part of building your strategy for recovery. Here’s a four-part situational viewpoint that will ensure you are not caught unprepared as we enter into 2021.
Over the past thirty or more years, we have predicted many of the trends that have effected the hospitality and private club industry. It’s not that we’re any smarter than anyone else. We simply spend a great deal of time watching changes that can, and often do, have an effect on private clubs. We look for five characteristics and they don’t need to be catastrophic.
- How could it affect members financially?
- How could it affect their overall usage of the club?
- Are there new and/or changed member expectations?
- Will it affect specific demographics or segments of members?
- What are the potential opportunities and threats of each of these questions?
Let’s look at a fairly low-key example. In the late 80’s and 90’s there was a major increase in dual wage earner households.
How could it affect members financially? Obviously, this creates greater income to the household. On the positive side, it made membership fees and dues accessible to a broader market. On the negative side, if there were children in the household, and there usually were, with both parent working there was a psychological need to create more valuable family moments and time spent together.
How could it affect their social usage of the club? While more households could afford membership, would they join unless there was something available for the whole family. The opportunity, to those clubs that saw the trend as it unfolded, was to create a family friendly environment. The threat was without family related activities, clubs not responding, while successful, branded themselves as non-family responsive.
Will it affect a specific demographic? Working families, generally with children at home or contemplated, were the primary demographic effected by this trend. Each generation wants more and this generation found that trading the family time for the added income allowed flexibility and opportunity for more upscale and mutually enjoyable family pursuits, like membership at the local private country club that catered to family needs.
That trend is still a part of today’s culture and the ideals are still valuable today as clubs position themselves.
So, let’s fast forward to today. We have two very high-profile issues affecting the private club, COVID and an uncertain economic future as politics continue to drive uncertainty. Those clubs in oil and gas markets have already seen the layoffs in that industry and the fall off in membership numbers.
What trends should you be looking for? Will knowing the emerging trends give you strategic direction? I think the trends are obvious and I’m confident that knowing what they are will help you see your course of action clearly. Better yet, they will help you develop your 2021 strategy to return to normal as quickly as possible.
Here’s are some very simple and obvious trends to watch:
- Industries that may be affected by the new administration’s policies.
- More working from home households, with potentially more flexibility of time.
- A greater need for office related services.
These alone could change the offerings most advantageous to your members. But how do you know for sure?
Over the COVID outbreak, we have offered complimentary member surveys directly related to member’s concerns, fears and likely reactions. We have also tracked the potential changes that may occur as the administration changes in Washington. Clearly, members are watching the business sectors that affect them the most, whether positively or negatively. So, how better to know than to ask your members. But you need to know the right questions.
Over the next several days, we will be releasing a very simple growth, retention and membership health process that will provide your club specific crystal ball, allowing you to see the trends, know what members are thinking and how they may be affected, and a prescription process to be ready for what lies ahead.
This is not the time to think the worst is over, nor is it the time to panic. It is the time to prepare and be ready.
Are You Ready?
If you have any questions, I would be happy to hear from you at any time.