Recent global economic conditions began to weigh heavy on a still well-regarded country club. Membership levels reached historic lows and operating capital was dwindling. Attrition at the staff level and insufficient participation on the part of the board of directors was leading to a general breakdown in the quality, service and amenities the club had to offer. This further contributed to worsening conditions in most every aspect of the club.
On top of all this, the need for renovations and other issues necessitated the closure of the club for over a year, during which time membership dropped precipitously. Upon reopening there was a great deal of work to be done, including the installation of a new management team, a new course superintendent, as well as a new food and beverage program.
The new management team was able to increase membership significantly through marketing, advertising, and concessions in initiation fees. However, the median age of the newest members was much lower than previous membership statistics. These new members brought with them more sophisticated food and beverage tastes than the existing menu could satisfy. It became a very tense situation, with some people resigning their memberships rather than spend the required $50 Food & Beverage minimum each month. At the suggestion of the club’s former president who was familiar with Filament Business Advisors’ ability to turn around even the most beleaguered organizations, the club asked FBA to assess the situation.
A member survey was conducted to gather more information on member opinions, wants, and needs. Interviews were conducted with staffers and management as well as members of the board of directors. Additionally, a thorough analysis of club financials was completed. This information was compiled by Filament into a report and recommendation to the board and General Manager.
It was clear that members felt the menu was outdated, the service slow, the beverage program lackluster, and the catering fare uninspiring. To make matters worse, the chef lacked the skills to create a suitable menu and the F&B manager lacked the work ethic to implement the necessary changes.
In such a situation, only one option exists in order to bring about the necessary changes. Filament assisted the club in replacing the chef and F&B director, designing a new menu, hiring a service director to focus purely on front-of-house matters, and improving the cocktail and craft beer programs.
The results were convincing. Whereas less than 50% of members were spending their F&B minimums prior to FBA’s involvement, the number was up to 95% just six months after the new menu and staff debuted. Moreover, the F&B department set new sales records in the 19th Hole Café as well as in banquet business YTD in 2015. Food costs are a solid 35% (pretty good for a member-owned club) and attrition is down, yielding a more engaging member experience. As of the most recent member survey, more than 90% of members are at least “satisfied” with the F&B program (vs. less than half in early 2014).
Member-supported clubs are in many ways quite different from open market businesses. However, member-customers still expect a product of similar quality to the best on the open market. As the quality of service and amenities on the open market improves, private clubs must also increase the quality and scope of their services. It is for this reason that clubs, and not-for-profit entities in general, must begin to approach their operations more like businesses or face the possibility of obsolescence.