Afleveringen
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Websites are constantly evolving. No longer is your website an online brochure. It should be a critical part of your membership and marketing team. Remember the early days of websites? Some businesses didn’t think they even needed one. They were really basic and let’s face it, were more of a digital brochure. Lots of copy, a few pictures and of course, no video. In the early years, the idea of having a website that could drive new members, increase revenue and answer questions for members and prospective members was unheard of. It just didn’t exist.
Today, people who come to your website want to know more about your amenities, your staff and mostly, they want to know about your members to see if they’ll fit in. They are looking for answers and they want them now - are you able to help them, even if it’s after hours?
In this episode, Lisa Schmidtke, a seasoned website developer and designer, and I get into websites to talk about what you can do to make your website the top performing of your membership team.
Episode Highlights:
2:53: Ed and Lisa discuss the missed opportunity in having website images of amenities without people. 5:03: What is organic search as it relates to a website and why that matters when it comes to getting found online. 7:39: Ed explains how most club websites are missing key pieces of information that help them get found online. 9:14: The impact of a blog on your website. 12:06: Ed and Lisa talk about how blog content can attract the next generation members who are looking for kids activities online and may not realize they can find them at your club. 14:58: Ed and Lisa talk about automating your new member inquiries. 17:22: Optimizing the time your Membership Director spends with prospective members. 23:33: Lisa talks about what progressive club leaders should think about when building a new public facing website. 27:31: Lisa and Ed talk about hidden costs and the fact that when some website developers in the club space offer "free" public facing websites, they're not really free.Podcast Transcript
Ed Heil [00:00:00] Hey there, Lisa. How are you doing today?
Lisa Schmidtke [00:00:03] I'm great. How are you, Ed?
Ed Heil [00:00:04] I'm doing just fine, thanks. Thanks for for joining in on the fun here with Crushing Club Marketing.
Lisa Schmidtke [00:00:10] Happy to be here.
Ed Heil [00:00:11] All right. So in full disclosure, Lisa and I do work together. So the conversations that we're having have been had before to some degree, but to frame it up for you to just, you know, to be able to hear some some different thoughts around web design and development, you know, we thought that it might be helpful for Lisa to share her insights because Lisa, as we mentioned, has her career has been in building and designing websites and and so much more expert in this area than I am, for sure. So looking forward to the conversation today, Lisa.
Lisa Schmidtke [00:00:51] Yeah, I am as well.
Ed Heil [00:00:52] All right. So let's just talk a little bit about we'll just dive right into this because club websites are, you know, depends first of all, it depends on the type of club you're at. We recognize the fact that there are some clubs and there's very few, but there are, you know, the elite clubs in this country that really don't need to worry about this. I mean, in my opinion, I think in I think you would agree that all clubs really should think about how they're presenting themselves online these days, because it's an opportunity to show your club off and your space, your membership to some degree. But recognizing this might not be a priority for some clubs or for the vast majority of other clubs. How they look and come across online is pretty important.
Lisa Schmidtke [00:01:37] Yeah. Yeah. I would agree. In just like you said, even if they're not using it as a marketing tool or a lead generation tool, you know, inevitably somebody, one of their members may be a guest of a member is going to go to access the website. And, you know, it's got to reflect the vision and the professionalism of the course.
Ed Heil [00:02:00] Yeah. And so when we talk about websites and the conversations that we have with club leaders, so often they go to the functionality of the back end and there are some very strong developers of the back end experience for for members and they're getting better and better. And that member experience in the back end is getting better and better. Well, we're going to talk about today is really that front end that what we always refer to internally is the public face and that part of your website where when I'm searching your club and I find you that side of the website, that is where we're going to spend most of our time today. And so let's just start with there. Like why does that matter? Why? Why are we spending time today talking about the importance of that side of the website?
Lisa Schmidtke [00:02:53] Yeah, you know, I say it's because, you know, as far as the private the member side, as we call it, you know, that the software that most people are using do do a fine job of of allowing people to make a tee time and sign up for dinner reservations and, you know, things like that. But and most of that functionality people are getting from their their app anyway. But really with the front with, the front facing side since the members are really just looking to come to the website, do what they need to do, log in and move on. If they go to the website at all, the the majority of the websites should be focused on on the front facing and and by that I mean the copy, the graphics, the design should, should be designed so that prospects can actually see themselves at the, at the club and envision what it would be like to be a member there.
Ed Heil [00:03:46] Yeah. And as I was saying, you know, in the in the intro to our conversation, today's, you know, in talking to so many club leaders through the years in fact there's there's one at one of my CMAA workshops we use one of the clubs as the organizer of the, the host of the event I should say, we use his club as an example in a lot of beautiful spaces, a lot of beautiful amenities, but no people at all. And which is really, I think, you know, is that that's one of the biggest mistakes that we probably see out there, isn't it?
Lisa Schmidtke [00:04:24] Yeah, absolutely. I mean, you know, because what happens in is the photos often look like stock photography. People can't even tell if it's really a photo of the club or not. And then back to what I said, it's really hard for a person to envision and see what it would be like using that pool, playing that course, if there are no people on the course and in the pool.
Ed Heil [00:04:45] Right. Everyone wants to be able to look at that and go, Can I see myself there? Can I see my family there? Right. And if it's stock imagery, let's face it, stock images look like stock images. I mean, they look kind of hokey, right? I mean, there's some. They're better than others, but for the most part, kind of hokey.
Lisa Schmidtke [00:05:02] Yeah, for sure.
Ed Heil [00:05:03] All right. From the back. From a development perspective, let's just talk about that. You know, as far as, you know, and you've been you've seen the back end some, you know, some club websites today, they're missing certain elements that would enhance organic search. Can you just talk about what is organic search? Why does it matter and what, what's missing?
Lisa Schmidtke [00:05:29] Yep. Yeah. So organic search, you know, that that is, you know, not to be too elementary here, but that is, you know, somebody puts a keyword into the search engine. There are paid ad results below that and on on pages beyond the first page there are organic. So the goal really should be to try to rank as high as you can organically so that you don't have to well, number one, so that you start showing up at all. And number two, that you don't have to then do paid ad strategies. You know, there are a number of of coding practices that a platform should adhere to that backend code, that metadata all important. But, you know, I would say that the web building tools should just automatically be optimized for that. You know, you shouldn't have to work around or spend a lot of time trying to get your code to be up to par for search engines. So that should be a given. And we find that a lot of clubs, software that, you know, that are used for these private club side of of the of their websites, even those are not really built to be optimized for that's a lot of messy code lots going on they're hard to update. So just getting a website on a platform that's just there code and back in is optimized is step one. Really is everything you do beyond that, the and the key to then being ranking high in search engines is to providing valuable educational content on a consistent basis. And that doesn't mean adding a bunch of web pages or spamming it with keywords know a very effective tool for that. And in our world is blogging and with the, you know, blogging, that is how clubs can really help to seed new members in a more detailed way. So not just photos, not just a web page, but information, detailed information highlighting members and staff is a is a really effective tool for that as well.
Ed Heil [00:07:39] All right. I want to go I want to dive a little bit deeper into blogging in a minute, because in the workshops that I've done that always comes up is like because storytelling always ends up with like, well, how should we do it or should it go? And blogging is is one of those vehicles. And we could probably spend a whole other podcast talking about that as well, as well as organic versus paid search and all of us. But anyway, I don't want to complicate it. I do want to just if you're listening to Lisa and you're going, well, code, what is that? And metadata and stuff like that. Just, I do want to try to provide some explanation of that that's not going to go too in-depth. And let me just take a quick crack at at least until or I'm screwed up. Websites are usually built with their, you know, code. Right. And we think about that. And sometimes there's words that go into the back end of the website that tells like, Google. When we talk about search engines, Google is a search engine. Yahoo is a search engine, Right? So there are certain words that go into a website or that should go into the back end of a website that automatically tells search engines certain things about your website, right, like content or what you do or things like that. So we talk about coding, we talk about organic search. We want your website to perform in a way or all web sites to perform in a way so that when people are looking for certain things, whether it's golf courses, tennis facilities, things like that, that your site organically comes up. How do I do?
Lisa Schmidtke [00:09:12] That's perfect. Great job.
Ed Heil [00:09:14] Oh, thank you. Thank you for that. So so just with that as a backdrop, so let's just let's dive into the blogging and organic search thing for a minute here so we can just, you know, hopefully provide some ,some clarity around that because people will say sometimes, like one of the questions I always get Lisa's like, well, when people come to our website, who's how will they find our blog? Yeah, right. Like, that's a common the common thing. So what do you say to that?
Lisa Schmidtke [00:09:44] Yeah, I mean, certainly it should be, you know, promoted all over the website. You know, sometimes we use "pop ups" to say, subscribe to our blog. It should be featured on the homepage. But, you know, a lot of times depending on the topic, search engines like Google, will, will even show the blog before they show your homepage or another page on your website. So if it provides enough information that that user is looking for, it's likely to show up.
Ed Heil [00:10:14] Yeah. And so that's why it's such a great differentiation, differentiation to make, because what people forget sometimes is that a lot of website visitors find a website not through the homepage or if you think about it as your house, not through the front door, but through a side door, which is a blog. So there's a term that I love in and some of the analytics we see, which is entrances, right? Like visits and entrances. And sometimes an entrance is like, how did they enter into that website? And a lot of times like you're saying, they're their biggest their most entrances are coming through a blog post that someone has written.
Lisa Schmidtke [00:10:54] Yeah, exactly. Especially if that blog is then also promoted through social media. So if there is a Facebook post or an Instagram post or something like that that says, hey, you know, here's some information about our club, we just wrote this blog, go read it. Sometimes the social media post will show up on Google before the blog itself, before a Web page, you know, so it's also important to, you know, not just write the blog, not just post the blog, but really promote it.
Ed Heil [00:11:24] Right. So hopefully you're you know, if you're listening, this is this is starting to make some sense to you. And if you just think about it from how you might search for information and what you find, like a lot of times people will say, they say it less now, but they said all the times, like I don't read blogs, you know, like, actually you probably do, but you just don't realize you're reading a blog, right? I mean, it's like, oh, I was just searching for this and I found this great article, right? Yeah. And it's really a blog. And a blog is really just Yeah. I mean, again, correct me if I'm wrong. It's really just another page on your website, is that right?
Lisa Schmidtke [00:11:59] Yes. Yep. That's a way. It's just it's just indexed and promoted in just a different way.
Ed Heil [00:12:06] Okay. So I do want to just go one step deeper on this now that we have this idea of blogging, because what a lot of people says, like, well, what are we going to write that people will find? Or this is maybe that next level question, right? And so what I want you to think about, if you're listening, is today's member or that 42 year old member that you hear a lot of people talking about. And by the way, there is, you know, the greatest transfer of wealth in history will happen in the next, you know, next ten years or I think by 2045, they're saying will be the greatest transition of wealth in history. So there will be young people with discretionary income to spend and they are going to go online to look for a lot of information that may or may not have anything to do with your club. So what I think of is sometimes, Lisa, I'll go, well, you know what? They're going to be looking for things like activities for their kids. At what age should I get my child involved in sports? When should they start taking swimming lessons? How to become a competitive swimmer. Right. What age should I start my child playing golf? And imagine if those people who are searching for those four answers to those questions, if they find blogs that your club has written, then all of a sudden you're coming up on their radar. They might be thinking of a totally different experience for their family, but they come across your website.
Lisa Schmidtke [00:13:35] Yeah. And by the way, they don't want to pick up the phone and call you and they don't want to, you know, wait for information. They want this information, especially the younger generation, right away at their fingertips. If they have to pick up the phone, that's a barrier to entry. They won't do it.
Ed Heil [00:13:49] Right. And, you know, it's funny. I'm glad you said that, because what's, if you think about that a little bit more, you know, we'll talk about that target member prospect who knows like, well they don't do this and they won't do that. But what you really need to do is think about yourself. Right? It's like I don't, I don't shop or look for things, especially like things like a private club membership between eight and five. You know, it's at night and it's on the weekends, and it's when I have the time to do it. And you're into your point is like, I want the information when I want it, not when you're available for it. And you can you can argue the fact that, it's like, well, that's not the type of club we are. And and that's fine. And some people will, well, you know, be okay with that, but some people may not and they'll move on to the next club in your in your market.
Lisa Schmidtke [00:14:42] Yeah that's right. You know, or it'll just take them longer to become a member or become your prospect. So you know, it's getting them in the door as soon as you can and providing the information as quick as they can.
Ed Heil [00:14:58] Right. Okay. So just. Really quickly recapping because we're going to move on to that. Next thing that we're talking about is that people don't want to wait until you're in the office on Monday or Tuesday because you're closed on Monday or whatever. So the idea that the front end of your website or the public facing part is really important, and that with that, that part of your website, you can leverage that so that more people find you through organic search. Or when they go to your website, they can find more information that is sometimes in the form of a blog, and blogs are helpful for helping you get found for certain things. They answer questions and it's helpful information, and it also tells search engines that you are known for or an expert in some of these areas or these topic areas. So I just want to make sure everyone's everyone's staying with us here because, you know, ultimately, if we can provide people more information so they can determine whether or not the club is right for them because you've given them so much information that should make your the life of your membership director a little bit easier. Right, Because people will self-select out. But what they're going to do and we know this and this is the next part that, you know, is is part of this whole evaluation of your website is really, you know, having the information that your prospective members need. And I'm sorry that your prospective members want when they come to your website. A lot of times today, you, you know, websites, club websites, you guys have contact forms and people will fill that out, which is great. And what I usually hear is that, yes, someone fills out a contact form we receive at the membership office and then I send a letter to that person or an email with membership information, and I'll usually ask and I'll say, Do you call them first? Do you try to qualify them before you send that membership information? People nine out of ten times say, No, I just get it and I just send them because that's what they want. They want the membership information. So it takes some time. The person has to wait to get what they want. You know, your membership person has to take the time to send that email. Even if it's a copy and paste, they still have to take the time to do that. What's a better way to to make that happen?
Lisa Schmidtke [00:17:22] Yeah. So I think you need to have, you know, sections of your website that, number one, they're gathering information along the way. And so these might be people who are not ready to reach out and become a member. They might not even be ready to receive pricing and all the information that they need. But there are certain pieces of content that websites and clubs can offer for those just kicking the tires. And maybe these are people who are not qualified quite yet to be a member of your club. Maybe they're looking for more or less or something different. So like you said, you want to allow those people to kind of opt out, know that themselves if they're not ready, and then the membership structure doesn't have too to waste time for that. But for some items like pricing and membership, more deep membership information, you know, that could be offered automatically, but not necessarily for free. And what I mean by that is you can ask the prospect for a little bit of information about them in the end with the form. So there's a form that says just just give me your name, phone number or email. You might not call them right away because maybe it's a piece of content that's just giving a little bit more of information about you. But now they're in your system so that at some point you could reach out. When they do get to that prospect level that request a tour, contact me now phase and while they're in this dip in their toe and in the prospective member phase, you kind of don't have to worry about them at that point.
Ed Heil [00:18:58] Right. So that whole idea of having like almost different levels of interest. Right. Like kind of interested I kind of like your blog is helping me to learn more, right? Maybe you're not really ready for a phone call or tour or anything like that versus when someone is saying, hey, you know, let's say download our membership guide for more membership information, download our membership guide or something like that. That's probably a little bit more of a serious prospect.
Lisa Schmidtke [00:19:25] Yes. Yeah, it is. But that person might not be the at the request a tour stage yet. Right. So Yeah. So varying levels of interest and it's all just about getting the information that your prospects want, how they want it when they want it.
Ed Heil [00:19:41] Yeah. And I think you know, just this whole idea of allowing people to opt out, to self-select out, like, I get your membership, you know, your initiation and your monthly dues. And I'm like, Ooh, I didn't know it was going to be that much. Right? Then then your membership person isn't spending time with the tour, is it? Like, you know, and we all know the line, which is like, Hey, if I can get someone in for a tour, then I can usually, you know, convert them, which is great. But how many tours do you do with an unqualified prospect? You're like, you know, you get through the tour and they're like, Oh, wait, I didn't know it'd be that much. I'm not interested. Right.
Lisa Schmidtke [00:20:19] Right. And how many more leads could you be gathering if you didn't make people request to, you know, take a tour just to find out if they kind of like you or not.
Ed Heil [00:20:28] Exactly. Totally. Yeah. So having additional information, making it easier for people to understand what your club is all about, and then ask and then converting them in a way that really makes sense for that prospective member. But also something that streamlines that process for your membership team is huge.
Lisa Schmidtke [00:20:49] Yeah, yeah. We hear from a lot of membership directors, you know, they are a team of one and then when they're not there, it might be the receptionist giving a tour and it might be, you know, somebody in the back office that's, you know, sending out this information. So a lot of times it's, you know, a shoestring kind of team. And so in this way, this process that we're talking about, where you're offering this bit of content, you're asking them for an email, maybe you're setting up an automated email campaign to kind of stay in touch with that person until they're ready to buy. You know, your what you're doing there is creating a whole 'nother salesperson really, right. That you don't have to worry about.
Ed Heil [00:21:30] It's 24 hours a day, seven days a week. Yeah, yeah.
Lisa Schmidtke [00:21:34] Yeah. We we heard some statistics recently that say it takes about 8 to 12 touchpoints for a prospect to become a customer. And, you know, I was just talking with a membership director today that said, you know, think how much time do you have to reach out to somebody 8 to 12 times of your list of, say, 100 leads. They don't have that time.
Ed Heil [00:21:57] Yeah, yeah, yeah. I mean, I think we all know that people in the membership roles are are overworked in many ways. I mean, there's a lot that they're responsible for and that they have to keep track of. Okay. There's probably a whole I know there's another, another conversation around that whole idea of what happens once someone converts and this ah, you know, there's a whole conversation around how do we as we would say, nurture those contacts? You know, like so often in a membership office, someone will fill out a form like that on the website and if they're not ready, then the membership director just disregards, or throws the form away or, you know, and then they wait till the next time instead of trying to stay in touch with them. So we'll talk about that later. Just some final thoughts, Lisa, from your perspective, and I'll put you on the spot a little bit. We didn't really prep for this in our pregame, but but I'm just wondering, like, what do you, for someone who's listening to this going, yeah, you know what, we do need to update our our club website, what will be the things that you would say are most important for that club leader to really think about as they think about because they're thinking just redesign, right? And sometimes they might even think, well, hey, our our, our web provider right now is going to do it for free, Like they're not even going to charge us. But what are the things that they need to take and consider into consideration?
Lisa Schmidtke [00:23:33] Well, you know, right away, you know, think about it like you're building your house. You're getting your house in order, you know, and you're not going to build your house on Styrofoam or, you know, sand. You're going to build it structurally sound. So the first thing right off the bat is using web building tools that are right away, just like we said, built, built so that search engines can find them. They a lot of the tools we use are are you can automatically migrate onto the platforms we use and immediately they're more modern. So we even say even if you just have the budget to migrate off of your WordPress site or your club software site and onto a platform like what we use, it's going to automatically elevate, modernize the look and feel of your website.
Ed Heil [00:24:25] What does that mean, though, when you say I mean, I get like modernize the look and feel, I don't really know, you know, just thinking for someone who might be listening, what does that mean?
Lisa Schmidtke [00:24:35] Yep. So there are certain practices. You know, we see now that, you know, that are much different than websites even five years ago. And the reason being, is because websites now need to respond quickly to whatever device somebody is using. Most people looking at your website or not on a desktop, probably. They're on a phone. So your website needs to respond to whether the size of the phone, whether you're on an iPad, things like that. So the navigation needs to work a little differently. The way that the photos work around the text needs to respond so that it's easy to scroll and read. You don't get to choose that you want this navigation on the left hand side, you know, right there next to this one little graphic, you can't get that picky. But it does need to be readable and look nice for the user. A lot of white space.
Ed Heil [00:25:27] You got it. Yeah, isn't it interesting. All right. So let's keep going. So. So right away, you know, it's like getting it. Make sure I think your thought is. Make sure that you're building this new site on a modern template or templates going to that will allow you to sort of modernize your website. What else do you think?
Lisa Schmidtke [00:25:48] Yep. Well, like we talked about before, you know, graphics. So another part best practice of new modern professional websites are lots of graphics, big graphics, video, even at the top. So you pull up your website. Boom. We've all seen the drone video of your course doing the flyover. You know, that's like that's come and it looks nice. But somewhere along the way you need to show people, people playing your course video does that amazingly, because I think people can really see themselves like in the course on the course playing even more than graphics. But if all you have is, you know, a half day photoshoot and a couple of people that are willing to kind of, you know, be stand ins for you. I mean, that's going to elevate it immediately.
Ed Heil [00:26:34] Yeah, for sure. Any other thoughts around that?
Lisa Schmidtke [00:26:40] Probably not a whole lot more without digging too much into the technical aspects of your website, for sure. But I would say just a proper navigation. Making sure that the items in your navigation. I, when, when...One thing that has surprised me over the years of designing websites for private clubs is the number of clubs that don't have golf in their main nav.
Ed Heil [00:27:05] Oh, right.
Lisa Schmidtke [00:27:07] Like what is your most what is your greatest asset? They say our golf course, what we have done in the May NAV and other items that you want to feature events if you're a private club that offers events, especially if you offer rent, space, event space to nonmembers, that's a great sales marketing tool. Your website can really help to boost that revenue.
Ed Heil [00:27:31] Yeah, it's so interesting in again, I mean, this conversation could go on and on with different things to consider, but some of those really basic things like that, you know, when you said when you mentioned that a second ago, I thought about things like, you know, like WordPress, right? It's like, you know, oh, you got to run. Another update. Ooh, do you have that plug in? You like it? Not to say that WordPress is not a good platform and a lot of businesses run on that and it's terrific, but it's, you know, updates and maintenance and all those things and is easy to make changes. Is that user friendly? You know, all those things that you know, whether you are some of you are more technical than others and more capable in this, more comfortable than others. But but just in general, today's modern Web site, like you're saying, lisa, just it is built to be is they say whizzy wig. What you see is what you get. And and that's something that's important to to think about. You know, the idea just you know, one of my last thoughts around that is just the idea that, you know, you don't want to get in a mess up your website, right? Like you want to have the wrong person, like, hey, I'll just make this change. This is something I would do. And then all of a sudden, like, why does this image look like this? But, you know, if there is someone who has some background in web dev that you know, or that is on your staff that can help make some changes or it's not as scary to make some basic things. You know, it can be good to have a platform where you can do that without having to pay 150 bucks for someone to go in and look in, do something, or, you know, it's not a lot of money, but it is something, you know.
Lisa Schmidtke [00:29:08] Yeah, well, like you said, you know, we hear that well, you know, our club software will do our public facing website for free. Well, think about how free that is, because, you know, just like you said, the first thing they'll have to do is start somebody's got to start doing updates. You can't just have the same, you know, code platform, call it what you want, module widgets.
Ed Heil [00:29:28] All right?
Lisa Schmidtke [00:29:28] But, you know, they need to be updated. And then number two, when with when we work with clients to say no, we want us to keep our website where we are, that's great. And then we say, Hey, let's do this membership guide idea where we put a form on there. People have to give you some information before they get the membership guide here. Here's the form. Can you put this on your website? I have heard of some of the software companies charging up to $700 in order to just add a form to their website. So start adding up these costs and you know, it's really not free.
Ed Heil [00:30:02] Yeah, for sure. All right, Lise. Hey, good stuff. Thanks for, uh, thanks for jumping in and helping us out. And we're going to be doing this again. So we're going to not so much this exact format, but we are planning a, a webinar on topics similar to this that we will have, right now, it's early 2024 and will be available once we record it on our website as well. But but thanks for so much for sharing your expertise and I will see you soon.
Lisa Schmidtke [00:30:37] Yes, look forward to that webinar.
Ed Heil [00:30:39] All right, Thanks.
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John Schultz, CEO of Club Leadership Alliance, has been around the block - a bunch of times! Prior to his current role, he was the GM for over 20 years at Carmel Country Club in Charlotte, North Carolina. Taking over a club with financial challenges, he put his flywheel in motion and turned the club around with more than 60 million dollars in capital improvements in 2 decades.
Balancing the shifting demographics of new, younger members with longstanding members, facilitating town hall discussions, managing the conflict and debate that goes with member assessments and day to day communication challenges that are hand-in-hand with running a club, Schultz has done it all. John Schultz built his career at Carmel Country Club with more than 20 years of service AFTER doing 9 years of military service as a United States Marine. There were probably some days as a Staff Sergeant in the Marines that were easier than his days as a General Manager, but that’s another story! Needless to say, when you stay in one place for over 20 years, you did a lot of things right and you also dealt with a lot of change.
Today, John Schultz is the CEO of the Club Leadership Alliance which is a collaborative effort between The McMahon Group, Club Benchmarking and Kopplin, Kuelber and Wallace. Their mission is to aggregate the best practices they’ve seen from the hundreds of clubs that they work with and then help clubs take advantage of the knowledge they have gleaned. What better guest could we have for an episode on change management and managing shifting club demographics and dynamics?
Episode Notes
4:29 - John talks about taking over a club that was experiencing financial distress early in his career. 9:03 - John talks about how he approached relationships with the board. 11:18 - John talks about how the "Flywheel Approach" started to help grow the club with the right members. 13:00 - John shares his most challenging initiative and how he handled it. 15:47 - Building trust again is difficulty. John talks about how he approached it while at Carmel CC. 22:02 - Member unrest led to some tense times in his leadership and John talks about how he handled a group of members who opposed the club's direction. 26:29 - In 2016 the member demographics began to change at Carmel and he talks about how he handled the influx of younger members with the established legacy members. 30:31 - Words of wisdom from John on how to handle bridging the generation gap between members.Episode Transcript
Ed Heil [00:00:01] You are listening to Crush and Club Marketing, a podcast for progressive club leaders ready to increase their club's revenue. Time for change begins right now.
John Schultz, CEO of the Club Leadership Alliance, has been around the block. Prior to his current role, he was the GM for over 20 years at Carmel Country Club in Charlotte, North Carolina, taking over a club with financial challenges. He put his flywheel emotion and turned the club around with more than $60 million in capital improvements in two decades. In this episode, John Schultz shares his stories of change management, navigating, shifting club demographics, member assessments and of course, member conflict.
Balancing the evolving needs and goals of private clubs, including the shifting demographics of new, younger members with long standing members, town halls, conflict and debate that goes with assessments and day to day communication challenges that frankly, just go hand in hand with running or leading any business, including clubs, are endless, all you club leaders know. Our guest in this episode, John Schultz, has been there and done that. He built his career at Carmel Country Club with more than 20 years of service, after doing nine years of military service, which I'm sure there were some days in the Marines that might have been easier than his days as a GM, but that's probably another story for another podcast. Needless to say, when you stay in one place for over two decades, you do a lot of things right, and you also had to deal with a lot of change. Today, Schultz is the CEO of the Club Leadership Alliance, and it is a collaborative effort between The McMahon Group, Club Benchmarking and Kaplan, Keebler, and Wallace. Their mission is to aggregate the best practices they've seen from the hundreds of clubs that they work with, and then help clubs take advantage of the knowledge they have gleaned. What better guest could we have for an episode on change management and managing shifting club demographics and dynamics? Thanks so much for joining me today.
John Schultz [00:02:13] Glad to be here. Appreciate being invited.
Ed Heil [00:02:15] Well, this is a I know this is an important topic for a lot of people. Leadership positions at clubs, and and man, with your your history at Carmel Country Club for almost 20 years. I guess the first question I have for you is, what is the key to making a long run like that at one place?
John Schultz [00:02:37] Yeah, 20 years is quite a while. And. And it's not like I had one plan going in and trying to move through and only executed to this one set of objectives and priorities. It's constantly moving. It's constantly changing. It's listening and seeing what's going on. It's feeling where the industry's going, what what people and members are looking for and the experience that they that they want from their club. And and that changed in many times through the dynamic. When I, when I first got to Carmel, they were in financial distress and the membership was, sliding. There was some debt and we really had to analyze where the club needed to go and and take advantage of those things. But also it changes, and about every five years we would take a new look out to to the future and see what was what were the opportunities and how could we, take advantage of where we were in the Charlotte market and, and what would make people, the most satisfied and, and engage at their club.
Ed Heil [00:03:48] This kind of reminds me of a conversation I had with John McFadden, last year from the Union League, Philadelphia, where he came into a club that was, you know, a little financially distressed, and, and hearing what you're saying, there's a the two words that came into my mind are brave leadership. And, you know, can you just talk about what that was like to walk into a situation where you're relatively new, unproven, and you're going to lead out of this, you know, kind of challenging times? Can you maybe just speak to what the mindset is and what it was within you that that gave you that ability to do that?
John Schultz [00:04:29] Sure. And Jeff is an inspiration to all of us and a, you know, visionary that jumps out there. And, and I hope to just be a portion of that. So, you know, when you look at the opportunities and the areas and what you can get done in a reasonably, financial responsible way and, and see where the club's going, I tend to look not necessarily, at the clubs next door and what, what they're doing, in our backyard because you get too homogenous when, you're only staying within that, constraint. And what are what are the resorts doing? What are the hotels doing? What are people doing? And the better restaurants and, and that kind of thing. So looking for those opportunities outside just "clubdom". And I have to admit I stole many, many ideas from many clubs around and repurpose them. And, and put my name on it and took credit for it and and and enjoyed the success from some of those. But it was outside the industry that really brings more opportunity. And, you know, the hotels resorts tend to be further ahead of us, and many in the Florida market, of clubs have to be more progressive in, in what they're providing. The competition is, much more, tighter down that way. So, so if you look at those areas and seek out what, what is going to be the next, the next big thing and, and try to take advantage of those and be on the front end. Carmel, was more open to, being progressive in the space because we weren't as traditional and we weren't as classic as some of the other clubs around. So we had the opportunity to take advantage of that, be a little risky and not a lot of risk, but some that would allow us to build, the, the, resort style pool and have social, engagement that was not typical. And so that social thing is really the first initial, area that I started at Carmel was to take advantage of the events and club functions and expand those things so that the, the members that lived around the, the club felt like that was their outlet. And to build that up was really our first, issue. We couldn't build anything because we had debt. So, I was able to really get the momentum going and it became their home away from home, as everyone likes to say. And the membership growth started, when we announced the pool, the year we announced the pool, put out the pretty drawings with the, you know, the tiki bars and all the rest of it, we brought in 131 new members, and paid for the pool in. Just the one year, of initiation.
Ed Heil [00:07:39] What year was that?
John Schultz [00:07:40] That was 2008. Okay. And so, right.
Ed Heil [00:07:43] Before the the downturn. Yeah.
John Schultz [00:07:45] Well, this was seven eight. Yeah. And then that roll that that success then rolled into the next big thing. So we proved that we could pay for it. We got out of debt. We, paid off the pool. And then we started the next big thing, which was in 2009, which at Carmel, a 36 hole facility allowed us to renovate the South course. Rees Jones came in and we did a 10 million, a $10 million renovation right in the middle of that disaster recession that we went through, and in 2009 and ten and came right out of that, paid that off, the growth, came after it, and it allowed us to roll right into the next big thing.
Ed Heil [00:08:33] So that really I want to come back to the next big thing, though. But just to frame this up a little bit, what I always think for, for GM's is how they relate with the board. Right? And having that sort of like a relationship that provides a GM to be visionary sometimes to execute on on big ideas, the next big thing. How would you describe your relationship over the 20 years with the board at Carmel?
John Schultz [00:09:03] Well, it's got to be a partnership because, there's not many. There's a few GM's that are making these decisions on their own. I'm not sure they're any. And we have to legislate up to, board members and the membership as a total in in are these good ideas and are they going to be successful and what is what's the outcome going to be? There's a there's a, Jim Collins, chapter. In "Good to Great" that's that he's written recently on social, sectors and in this, chapter, he talks about ledgers that that nonprofit, GM CEOs, have to legislate these decisions. We can't just make the decision. We have to provide that information and persuade the decision makers. And it's really a great, book or chapter to about 60 pages. I'd recommend it highly. And the other one, I'm not to be a Jim Collins, just, fan here, but.
Ed Heil [00:10:08] I'm a fan.
John Schultz [00:10:08] It's called The Flywheel Approach, and in there it talks about how I'm saying this next big thing, you, as you go around in a circle and you have a vision and you, and you act on it, it allows that, flywheel to spin. And the faster you can get the flywheel to spin, you get more and more done. And in turn, the confidence, grows, the momentum grows, and the membership has trust and faith in where you're going. I can tell you there was not a lot of people were not necessarily, at Carmel or saying, oh, the thing we need next is a swimming pool, right. But a golf club, with 36 holes. And the board, unanimously jumped in on this idea because it it was the next big thing that really allowed us to be successful.
Ed Heil [00:11:03] And that sounds like what you were describing earlier. I mean, before I interrupted you was just really that flywheel, like you got that thing going and people started. I'm assuming the membership trusted you more. They believed in you. They got it, you know, got behind what was happening. Is that kind of what happened?
John Schultz [00:11:18] That's right. And and then they invite their friends out to the pool. They invite them to social events. And the the more the community started engaging and seeing the animation and the fun and the, lifestyle that was happening, that was that was part of, the community. It allowed them it would create that demand, and they would then, of course, join the club. And and now there's a waiting list of almost 200, people on the waiting list, which is partially, you know, yes, it's Carmel, but it's also just the life, style that's, that's out there right now from the, pandemic.
Ed Heil [00:11:57] And you had mentioned in a previous conversation that in your time there, and correct me if I'm wrong, you did 60 million in capital projects. Is that right?
John Schultz [00:12:05] We did. Yep. And no assessments. All of that was initiation fee growth. Combined with, you know, operations were always, in the, in the black. And so we would fund capital improvements, and maintenance capital and all of those things. And I would be, remiss in not mentioning, you know, our net worth over time increased at one of the highest levels across the country and recognized as one of the better growth patterns. It was consistently going up and adding net worth. Over that time. Wow. And just a little bit there. We never missed a budget. Inside of that, 20 years. Wow. Good.
Ed Heil [00:12:50] That's awesome. What was your most challenging initiative that you that you put out there that, that required the most, maybe, arm wrestling?
John Schultz [00:13:00] Yeah, it was probably that, it was it probably came into the the 2009, golf course renovation just because of the timing and the uncertainty with the recession and, that kind of thing. And, and it and it created some dissension that didn't really come out in, in holding up the project or delaying it or changing it at all. It just created, it was at the time when, corporate atmosphere out in the, in the world was question everything, and communication and transparency was not really one of our best, skills at that time. And we learned from that. And, and found that being more, transparent and, and the entire industry moved in that direction and corporate world had moved in that way to just being, more open about what things are going on behind the scenes. And, and I, we really focused on that following that, situation, we kind of had a, uprising within the membership, and a couple of board members got voted on by petition, and, and it and it created just, you know, there was a blip there and just, satisfaction level, but it was, mostly tied to a lack of communication and transparency at the time.
Ed Heil [00:14:28] Interesting. I mean, that alone. So in the spirit of just, of, managing conflict, I mean, that is one of those moments. How did you handled that? Like with the membership, too? Because, I mean, you you know, that that can you know, what we says in the absence of information, people always go to the worst place. They make up their own mind and they go to the worst place. But and to recover from that can be hard. Like we we used to talk to our kids about the trust board, you know, say you put a little in, you earn this trust. And what just takes one second to lose it all. So how do you get back on track?
John Schultz [00:15:00] Yeah. So, so this was one of those moments in time where you had to take that introspective look we had done right about the time we, we did a membership survey, and, and this is one of those member satisfaction surveys that gets down into the most granular level. And one of the questions, or five questions in there was what do you think of the game? And so coming out of that survey, I out of a ten point scale, my number was 6.9. Okay. For those of you out there that, apply that to a, you know, a, a grade scale, that would be a D plus. For somebody who's this.
Ed Heil [00:15:46] Close to a C, though. Yeah.
John Schultz [00:15:47] Well, you know, that was my average in most of my schooling, but. And what? It was just a negative group out there just, wanting to pillage and burn and that kind of thing at the time. But it did make us have to say. All right. I was on the cover of magazines at the time, and there were a lot of things going on, and I had to say introspectively. What's that about? But it's what the members thought. So I had it was that point of inflection to say, you know, I need to respond to this. And we did, and it really allowed the club and it's kind of what has made me what I'm doing today in the governance area is to find the, and set out the roles and responsibilities, set objectives, and create clear lines of responsibility within the leadership of the club management committees, board. And it allowed us to grow that process to where we're setting objectives. Were establishing, long range plans. So everybody knew what we were doing. And we were then communicating that and using that as the means to which to share with the membership why we're doing what we're doing. And and it allowed us to really build on, those, things that, advanced the club and the leadership to where the trust became even greater. And so that, that that lesson allowed the communication, transparency and advancing, governance to the point where, Carmel was recognized as having one of the best governance, board policy manuals and processes and systems that is around.
Ed Heil [00:17:42] You're right. Got it. It's interesting. The, you can take that experience and sort of parlay that into turning it really into a positive, which is what you guys did. But, you know, I hate to I don't want to get overly granular here, but for some people who might sit there and go, well, but how did you do like when you would you tried to say, hey, we we made a mistake. We should have been more transparent about this. They how did you do that? Did you do it like in an email blast that went out to everyone? Because that's the first step. The rest is how you do everything after that. But what's that first step look like?
John Schultz [00:18:16] Yeah, it and this tends to be, how most of us operate with doing the newsletter. You know, the newsletter is due on the 10th. And by the and that's the day everybody starts doing the newsletter and then, you know, all the different communication pieces, whether it's the website, social media or wherever it is, we're always in our reach. I say we, are always but it tends to be reactive. We need to respond to this instead. Let's get proactive and. Yeah, and at the time, my communications director, came up with the idea that let's get ahead of it, and, let's put together a calendar of 12 months and let's go ahead and figure out what the topics are that we're going to share with the membership. Every year we get the same comment from, the members that there's no grass on the fairways. You just cut it down and burned it to the ground every spring. Well, it's because the leaf blade drops all of it, the grass drops all of its leaves, and there's nothing but a stock left. It happens every year. It's the same grass. That's how Bermuda grass acts. And so we would get these complaints. Let's go ahead and answer the question in advance. So we took the opportunity. And it's 12 months based on each department. And every department has a different set of things that they're going to then talk about, and share with the membership. And it's generally the same story rewritten every single year or message because it tends to be, you know, what's cyclical. And then we just, add to it and it's now a big spreadsheet that's, you know, many pages, many depth, of topics. And, and we just, we just keep adding to it. And it was really a successful piece to keep us ahead of the message.
Ed Heil [00:20:12] Interesting. So by doing that, you're you're sort of removing the possibility of someone questioning and being very upfront about the, the various issues that are that are going to happen. Like, you know, it like you said, like every year it's sort of the same thing.
John Schultz [00:20:26] Yeah. Try to get ahead of the ones that you can, because, you know, there's going to be something that that surprises you, right? Try to be prepared for the, events that are in front of you. And then, when you're surprised on something, hopefully there's some trust built in. Or the best answer is when we the staff don't have to give it. It's when a member read it somewhere or knows it from another source, and they answer the question to say, hey, you know, that was listed over here on the website, or this is over here, and I heard it over, you know, through the committee system, using the board and the committees to be, talking heads for what we're doing and how it's getting out. There is another means to get the information to the membership. That way they feel engaged with what is happening.
Ed Heil [00:21:14] Let's talk to let's talk about you touch earlier about, you know, on that the time where there was, perceived lack of transparency and clarity around vision or whether that was I, it sounds like that was something that was happening, but, and you said something about a fact is like different factions, which which happens. I mean, I don't I don't know if there's a club in America that hasn't experienced that in a group of people that rally around in a, a contrarian view, potentially. In the time that you managed those situations, did you have sort of a go to way of handling those or what was, you know, and I guess, you know, at the time it can really feel like crisis for, for a general manager or for club leadership. What did you learn in those situations?
John Schultz [00:22:02] Yeah, some of those are the school of hard knocks. And, having spent nine years in the Marines, I tend to, meet things head on, and, weren't necessarily, thinking about how to persuade somebody. I would just try to knock them over, but that doesn't work anymore certainly and the, idea of moving forward. Yeah, it's, we had quite a few, at Carmel. When I first got there, there was a situation where the seniors and honorary members had put in a situation where they wouldn't pay any dues after the fact after they were 65 years old. So changing that system, was was difficult and trying to, you know, get them to understand why you couldn't just use the club for the rest of your life for free. And put that burden on the rest of the membership. And we would use what would be common, tools out there today, whether it's, fireside chats or, you know, newsletters or just going out and talking to, smaller groups, getting getting the board members to maybe go out and talk to smaller groups, one on one and share with them and, and allowing members to be heard. Probably 90% of it is just that they've been heard and that we're going to consider their side of things because they they think some think that the board is so close minded, they're only doing these things for their own best interest. And I've yet to see any club that behaves in that manner. And isn't, thinking what's the best for the entire club? And, and it isn't their personal agenda. It tends to be how does this impact the club in the best way. And that isn't necessarily understood outside the boardroom.
Ed Heil [00:23:57] You know, it's so interesting you just said that because that is sort of the perception, I think, of a lot of members of clubs, which is that, oh, people just want to get on the board, or they want to lead committees because they want to push their own initiative forward. But you're saying you really haven't seen a lot of evidence of that? Yeah.
John Schultz [00:24:16] That's true. It happens. There are some. But they've got to persuade a a larger group that their agenda item is something they need to do. And then after they get into the board, I mentioned these, two gentlemen who got on the board by petition, after they got in and sat and listened and actually heard the information firsthand and were part of of those decisions, not a single thing changed of what they wanted to do, because then they had the information. And this again, is that "a-ha" moment when we shared it with people, they went, oh, well, that makes sense. Why wouldn't you do that? Well, without sharing it, without, making it, known. The question is there, and they think something frivolous is go or, you know, something else is going on behind the door, right?
Ed Heil [00:25:10] Something nefarious. Yeah.
John Schultz [00:25:12] No, there you go.
Ed Heil [00:25:13] And I'm not a great you know, I'm not. I'm not like, I'm a C student, too. So someone taught me that word. So I just want to sort of maybe sort of, pivot a little bit to this where, and just with some of the conversations that I've had recently with different people and, we just did an episode with Frank Vain, from the McMann Group, as you're, well, familiar and, and he's referring to this time, it's like the next golden age of clubs and coming out of the pandemic. And, one of the things he said in a talk that I saw him at was, the pandemic is the single best thing to happen in private clubs. And with that, now you've got, waitlists and you've got a lot of younger members, you know, that for that prime 42 year old young family that's looking to join a club, that, you know, they're excited. They want this experience. It's just maybe a little bit different than, the other things they've done in their lives. And so how do you, how much of this at Carmel would you have with as far as like balancing the enthusiasm and the things that young members want versus the old guard and what they're really, you know, what they think is right. What they think is the, you know, is best for the club. And you have much of that in the time you were there?
John Schultz [00:26:29] Oh, sure. So and we had this situation starting in about 2016. I remember because we, we were starting to get, negative feedback that we couldn't no, the members couldn't sign up for events and we couldn't, there were waiting lists for everything, and we couldn't, they couldn't utilize the club, which is a threat to the club, because if that gets around, well, you can join and you might be able to get on the golf course. At the time, the golf course was not playing as many rounds as they are today. But why would you want to? Because you can't get into any of the events. So we had to actively try to manage out of that situation. So some of it was how we were taking reservations. Some of it's, expanding the number of events, creating more. And so it, it led us to just taking an introspective look and saying, how can we solve for this challenge and this problem with, expanding, creating more and, and or utilizing the, the facility in a, in a more proactive way. And so back to your question. My answer would be not very popular with the older, members that are out there, and I wouldn't necessarily share this in my marketing, pieces, but the members that are joining are 42.5 years old with 2.5 kids, and that's our market. And if you just take the business sense here and apply, who's our market and where are we going to get members from and who are going to replace them? It's the 42.5 year olds that we need to be focusing on. It isn't that we're not trying to be multi-generational and create, programs and events and things that that all ages can take advantage of, but our primary market, we're we're the younger members. And so that was our focus in swimming pools and, events and creating, you know, engagement, for that group that would expand who we are. So that was that was our primary motivation.
Ed Heil [00:28:40] In the in the spirit of our earlier conversation around transparency and things like that, how how open were you with some of the older members that this is where we need to go and this is what we need to do. And and how was that received?
John Schultz [00:28:53] Well, if and I don't remember all those conversations, but when you do $60 million of, improvements, and these are aspirational improvements. This isn't just maintenance capital or replacing the roof and that kind of thing. These are these are "Golden Easter eggs" that we're putting out, without assessment. And when you share with them that this is how we're generating the money to, to and the new members to fund those improvements. And it's not on the back of the current members. They kind of get the message pretty quickly that that's the, the tool to to create the, the demand and, and the energy around people wanting to join. So, so they're, you know, if, if they're not having to come off the hip and pay for some of these improvements and things, they're, they're like, great, do it all. We're we're all we're ahead. Why not?
Ed Heil [00:29:49] Yeah. Interesting. So, as we kind of turn towards bringing this home, in your experience, I mean, for club managers that might be listening to this GM's, I should probably say, or even, you know, board leaders, that are trying to navigate some of these things and they're trying to make everyone happy where they're trying to make sure, like, we want to do some things that maybe some capital improvements that some members or the young members are on board, but the orders are not. And there might be assessments. What is your message to them? How do they, you know, from what you've seen, what's worked, what hasn't worked? How what would you say to them?
John Schultz [00:30:31] So Carmel started off on this and unknowingly, had this, net worth and this growth over time, just by the demand, the activity and the success that we had, we we didn't look out 20 years and go, oh, we want to have an 8%, net, you know, growth over time. And that's our goal. We took care of it on the, operating side with, with the budget, and we took care of it, with the demand. I would say, for those clubs that are out there, that are that might want to look at it, you've got to figure out how to maintain the club as at the status quo with basic dues and the capital fees, and to take care of the the everyday and what you what you have today. And then the growth and the aspirational things come through assessments and, and through the opportunities that that come out there with, the new member growth, especially since there's a cap on generally there's a cap on membership in many clubs and that growth isn't unlimited. So, you know, it's capital planning. It's it's looking out, in the future and being able to project, what's the membership, numbers, what are the initiation fees? What are the replacement costs of of all of the, assets that are already there? And the current members need to understand that the, the replacement cost of those items are their responsibility. It's it's not it shouldn't be on the new members to have to replace the old equipment and the worn out, irrigation system or the roof or the whatever. It's it's on the current members that need to be taking care of the club financially.
Ed Heil [00:32:22] Yeah, that is the old, this assessment is actually not for what's coming is for what you've actually enjoyed for the last 20 years or whatever. Yeah. Interesting. How important, how how important is strategic planning in this process to, you know, not only just from a. Health of the club. But even for just bringing members together and rallying around a vision in a in a goal.
John Schultz [00:32:50] Well, this is one of the tougher questions that are out there because there are so many facets to strategic planning. Whether we're talking about governance and, leadership and the board. What what where is the club going? What's it founded on? What are its core values? What are the principles that are going out there? And I would say the area here, that's most important is setting those annual goals and objectives in search of what that five, ten year strategic plan is going to be. So it builds on it and it keeps you in a forward, forward momentum and not just a one time, event where we're going to write the strategic plan, put it on the shelf, and, and it just sits there. One of my major goals in the Club Leadership Alliance is to get rid of three ring binders. Those three ring binders that go up on the shelf are just become useless. Instead, this just needs to become an annual update. And and it's a continuous process to ensure that the club's moving in the right direction. And then the bigger every five year kind of thing is to take that introspective look and say, all right, are we still on track? Does something major need to be changed in where we're going? Because the the core values and the vision and mission shouldn't change every year, but, we should set it up so that it's ongoing. And every year the objectives are set to solve a little bit of where we're going.
Ed Heil [00:34:33] Awesome. John, thanks so much for, for joining me and for sharing all of your insights. I'm sure it's helping a lot of people and, helped me a little bit as well. So thanks so much. And thank you for listening. If you find this podcast helpful. Be sure to subscribe on iTunes, Google Play, Spotify, or wherever you get your podcasts. Until next time, keep crushing your club marketing.
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Zijn er afleveringen die ontbreken?
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The private club industry enjoys a steady resurgence, with waitlists becoming the norm in markets across the U.S. Furthermore, experts predict the greatest generational wealth transfer in history, from Boomers to Gen X and Millennials, by 2045. So, how will this new generation spend its time and money?
Frank Vain, CEO of the McMahon Group, joins us this episode to share his perspective on the future of private clubs, and what he believes will be critical for their continued success.
Vain's perspective is unique. As the leader of the McMahon Group, he works with club leaders nationwide, surveys members, creates long-range strategic plans, and provides counsel. Therefore, he has a pulse on the industry and insightful thoughts on what clubs are, and should be, considering as they plan for the future. Generational experts will tell you that Gen X, Y, and Z value very different things than Boomers, and they measure their status and identity in distinct ways. How clubs adjust to these various demographics could be the difference between continued success and failure.
The make-up of future club members is changing, and club leaders are struggling to keep longtime members happy while attracting new, younger ones. This balancing act involves many factors, and Frank Vain and his team at The McMahon Group help each club discover the right approach -- because, as we know, all clubs are unique!
Key Moments
The "Golden Years" of private clubs - 2:57 The pandemic is the best thing that happened for private clubs - 6:25 The target demographic in the "Golden Age" - 15:43 What clubs need to do differently to attract younger members - 20:36 In what areas are clubs investing? - 25:03 What successful clubs can do to stay healthy - 37:00Podcast Transcript
Ed Heil [00:00:00] You're listening to Crushing Club Marketing, a podcast for progressive club leaders looking to increase their club's revenue. Time for Change begins right now.
Ed Heil [00:00:12] The private club industry continues to enjoy a resurgence, with waitlists becoming the norm in markets around the U.S.. On top of that, experts predict the greatest generational wealth transfer in history from boomers to Gen X and millennials by 2045. So how will this new generation choose to spend their money and time? Frank Vain, CEO of the McMahon Group, joins me today and shares his perspective on the future of private clubs and what he believes will be critical to the continued success of private clubs in the future.
Ed Heil [00:00:44] Thanks for listening. So, Frank Vain has a unique perspective as the leader of the McMahon Group. He works with club leaders across the country. Surveying members, creates long range strategic plans for clubs and provides his counsel, his advice is experience to club leaders so that clubs can make the best decisions for their clubs. He has a pulse on the industry and a perspective on what clubs are doing and what they probably should be doing as they plan into the future. And generational experts will tell you that the values of Gen Xers, Gen Y, Gen Z was totally different than the values of Boomers. And they'll also explain to you how they measure their success or their status or credibility in a totally different way. So for Boomers, where a country club is totally, you know, status type thing, it is not really the case necessarily for Gen X, Y and Z peers. In fact, they're more concerned and more interested in experiential type of engagements than they are things like club memberships. So the landscape of future club members is changing. And yet club leaders today who are typically a little bit older are trying to figure out how to balance keeping longtime members happy while attracting young, newer numbers or new younger members, if you will. There are so many factors in this balancing act to consider, and Frank and his team at the McMann Group are helping to figure out what is right for each club. Because, as we all know, all clubs are different. So here's my conversation with Frank Vain. Well, Frank, thanks so much for joining me today.
Frank McMahon [00:02:36] Well, great to be here. Thanks for having me.
Ed Heil [00:02:38] Yeah. So, boy, a lot to cover today. And in what you have called the golden age of clubs or some variation. Sorry, I don't have that, but the golden age of clubs, I guess. Let's start there. What? When you talk about that, what does that mean?
Frank McMahon [00:02:57] Well, I think, you know, it's a combination of things. I mean, in one way, it signifies that we're a little bit out of the wilderness. And in a way, you know, certainly, you know, the financial the Great Recession, 2009, 10, 11 were, you know, pretty tough period, a very tough period for clubs. And and they came back in sort of fits and starts after that. So you had really a good, gosh, 10 or 15 years there of some pretty challenging environment for for most clubs. And then, you know, and so the golden age and saying, you know what I'm trying to signify and that is that while it is an industry that that is subject to to ups and downs over time, we've seen that in the past. I think there is more here. There's a combination of things happening that that are more enduring. And so the golden age signifying that there was a convergence of sort of lifestyle, really a lot of that triggered by the pandemic was certainly a big part of it. There's innovation, whether spurred by the pandemic or other factors. Clubs have really changed quite a bit over the last several years. And then there's demographics. The demographics have turned in their favor where, you know, particularly the millennials now are at the age where club membership makes social and financial sense for them. So that whole golden age is meant to say, yeah, you know, things go up and down. And obviously if there's another major economic break like we saw in 2008, you know, sort of all bets are off, you know, But but really, that doesn't see any sign of that happening in that with with all these things converging at one time. It really ought to be something that lasts for quite a while. And I would say it's, you know, six, seven, eight, nine years you can look out there and all these factors seem to be playing into their favor.
Ed Heil [00:05:05] So maybe if we can put some of that in context within you know, as you started, you go back several years and the industry is in a pretty constant decline up until the pandemic. Is that right?
Frank McMahon [00:05:22] Yes. Yeah. Really over over the course. And I say 2008 or 9 there, but really over the course of a good, you know, 20 year period of time. Number of clubs declined, number of golfers, if you're a club with golf, you know a number of golfers in the US declining for a long period of time, particularly among younger people. You know, you certainly saw the number of clubs went out of business about 20 to 25% of. And we're tend to follow what I would call the, you know, the member owned club. You know, there are other quasi commercial entities and semi-private kind of things that are in there. But when you think about the sort of the traditional member owned club, they all their numbers were down. So yeah, I think by every metric you could say it was a I would say they were out in the wilderness for, for quite a while. Yeah.
Ed Heil [00:06:15] And then I've heard you say that the pandemic is the single best thing that has happened to private clubs. Is that, in what way? Well said.
Frank McMahon [00:06:25] Well, it really again, it's a it's a bit of a combination of things, but I think at its core, it just it it made evident their their value. Why do I why do I want to belong to a club? And so whether it was for access to services otherwise difficult to come from come by or, you know, sort of their personalized service or dealing with an a, a, a group of known parties, if you will. Right. That all of a sudden smaller was better, more intimate and privacy was better. People were nervous about sort of being out in the public. We were cautioned about you know, cautioned about that. So, you know, a lot of that, you know, just really expose that, well, hey, a club is more than access to a golf course or a swimming pool or whatever. It's it's a community. It's a collective group of of of people. There's an approval process. There's a, you know, a communications process and a whole sense of community around that where we were all searching for that, right. Or going Covid as that was suddenly yanked away from us in many ways and, you know, cautioned about going outside or traveling on an airplane or going to a meeting or going to a restaurant club, stood out as a bit of a beacon during that period. So while I could still enjoy a lot of those things, but also do it in a way where I felt a little a little more comfortable because even though those members could have been susceptible to the same disease as everybody else was, there was just sort of a sense that you're a member and a kind of of that extension of family almost, as opposed to something worse, you know, completely out there in the public.
Ed Heil [00:08:16] In some ways. Did. Do you think the pandemic reintroduced people to private clubs may be in a different way? I mean, some of the stereotypes of private clubs and private club members for so long was, you know, I mean, especially if you're a golf club with limited activity. But it seemed like through the pandemic, it brought families together and community together, like you're saying, in a way that was. In some ways more fulfilling, enriching than it was before.
Frank McMahon [00:08:53] Well, I think that's right. Yeah, I think it kind of turned it on its head. Right. You you had you know, you had kind of a political and social environment of getting over that same take, that same 20 year period, 2000 to 2020, where, you know, exclusive, exclusivity was sort of judged a little more negatively. And all those things sort of, you know, you were seen as not as our exclusive exclusive access, but exclusionary, discriminatory, you know, those sorts of negative connotations assigned to it. All of a sudden it turned that on its head because it said sort of, well, hey, I get it. You know, I, I get why I would want to be part of a smaller group and then share value, share activities and experiences within that group. And so as opposed to exclusive exclusivity being seen as this this pejorative and you don't want me sort of thing, it was seen as, Oh, that's a way to build a little network there and and a group and thrive and grow even within a rather challenging environment that was going on around them. So yeah, I think it flipped that on its head and said, Well, actually there are some there are some value there to all that. And and I get it. And you know, and you saw that call because prior to that it was often interesting anyway. And once you had that negative perception about being in a club and clubs as they were struggling often had this goal, well, it's maybe it's too expensive, maybe we should do this or that. And all of a sudden it was more value. The price went away, initiation fees went up, the dues went up and all those kinds of things. And so the value perception increased dramatically and, you know, dollars and cents followed it up with that. But it was really the sense of, okay, this is this is what I want from, from a from a group.
Ed Heil [00:10:59] Yeah. And as someone who consults with with private clubs and I've heard you talk about this, but it's the the innovation that occurred at the start of the pandemic. And I remember conversations that I was having with different people, and I was floored by how quickly clubs were putting things into motion, you know, you know, whether it was a little igloos that were going up, especially in some of the north courses up north or whatever they were. And, you know, their bureaucracy was gone. Things in there were innovating around family. And it was it was it was pretty remarkable. So now here we are at this point where it seems like people have been, I don't know if this is true or not, but it's almost like there's this renewed sense of value for your club and in how much you can do and what you want to get out of it. Matched with this golden age, this run now and I reading some other things about the amount of generational wealth that's going to occur in the next several years, right? So there are going to be a lot of younger people with more, you know, potentially more discretionary income that they can spend towards that. Are those all sort of the things that like, as you were saying in the beginning, are those also factors as it relates to the next 8 to 10 years?
Frank McMahon [00:12:21] Well, I think so. As long as that and that sort of as you turn to the future and say, you know, and I think most of our clubs are saying right now, how do we keep it going? Right. That's a that's a good question at all club leaders should be asking. And I point out and you're you're wise to mention this whole notion of of innovation, you know, the the notion that people wanted community and privacy during Covid and, oh, yeah, I get that, right. That's a pretty easy connection. They wanted outdoor recreation. So yeah, golf boomed out, outdoor tennis boomed, all that. I think you could get there on those pretty quickly. I think the innovation piece of it often goes underreported. And and yet it was the way that clubs responded and it and it just shows and it should be a good lesson for club leaders that a lot of those things you say happened overnight, whether it was let's all of a sudden start, you know, Tuesday night tacos on the terrace or whatever or. Now building the igloos outside the great little City Club in Wilkes-Barre, Pennsylvania. The Westmoreland Club had a courtyard next to it, primarily a dining club. And all of a sudden they popped these igloos out there and people are out there in the courtyard having fun, you know? I suspect if management had gone to the board a couple of months in advance of that and say this winter we're going to try igloos outside and people are gonna dine in them, that's an idea that that dies at the boardroom table. You know, I think so. So they were there. So they were ready to respond. And, you know, I don't know, I guess somewhat some of those ideas are work and some of them won't work. But it was the fact that they were so willing to try because in many ways they were scared to death. I think many of us being included at the beginning of Covid, that was my my first reaction was, "oh my gosh, here we go again". You know, it's going to be another 2009 or 2010 and people aren't going to want to join clubs and we're going to have another raft of closures and all that. And of course, after about a 3 to 4 month period of time where all that was incubating, the future turned out to be far different. But yeah, whether, you know, clubs just took snack bars and made them in the outdoor restaurants or, you know, the igloos as we're mentioning, or put simulators or there were clubs that took they're all ballrooms, right? Because no, no more activities, no more group events. And they put, you know, simulators in the ballroom and all of a sudden people are in there hitting golf balls and having fun, you know? So, yeah, that that carried through and that that is a big takeaway is that I think that's just a lesson that there ought to be, you know, you can't reinvent the club every year, but having a healthy dose of innovation in your, you know, in your business plan and your strategic plan is extremely important.
Ed Heil [00:15:17] Yeah. Let's talk about who the clubs are targeting or maybe should be targeting in this golden age. What what are you seeing and what's your. Because I think for a long time they target guys that are I'm in my late 50s you know my age maybe a little bit older. It's you know, that that's the target member. But it looks a little bit different today, doesn't it?
Frank McMahon [00:15:43] Well, it does. And, you know, it's certainly a bit younger. I mean, again, you'll have the joining age versus, you know, I think the average club member nationwide still mid-fifties is you're talking, you know, 54, 55 is generally recognized as a, you know, pretty much the the profile of the average member. But the joiner, as you know, tends to be about a 42 year old couple. And a lot of joining happens age 35 to 45. And now that's again that's that's why we're very optimistic about the about this being able to continue into a golden age, that we continue to innovate and we continue to have demand for things like golf and tennis and some of these recreational activities, health and wellness. But the addressable market, so to speak, is expanding the you know, the millennials just now, the oldest, you know, where where clock the clock ever starts ticking on these demographic things. But if you just say, you know, 1980, right, then the the oldest millennial right now is 42, 43 years old. So they're getting right there and there's a whole cohort of 80 million people behind them that that suggest over the next decade, the number of people in their early 40s is on the increase. And so, you know, you just look at lifestyle in general, right? Look look at what's happening out there and, you know, housing. Right. All the demand for housing today and and schools that go along with that. You look at equity markets and the resilience and the amount of investment and capital flow that's happening there. Those all happen around a period of time where the middle age group is expanding. You can almost transport a lot of what's happening in the club world today. Back to the mid 90s, which was another good boom period for clubs. Guess what? The baby boomers were in the same position there, you know, at that point as millennials are now. And so you know so clubs should be thinking about that group and thinking about that they're ready to you know, they were very urban a decade ago. Our cities were booming and people want to live downtown. And we saw that renaissance in the American city. We're having a similar uptake now. And the American suburbs where those millennials who were 40, 42 years old had some kids. Now they got married a little later. I got married in the early 30s or so. Now they've got some six year olds and eight year olds and ten year olds, and they're ready to move to the suburbs, get to where the schools are. The. Houses with space and all those things that they need. And guess what? They need a club that helps socialize and get ingrained in the community, meet other people, meet other young families, or have outlets for those clubs where the kids are on the swim team or they're playing junior golf or, you know, just the family can go there for holiday brunches and, you know, those sorts of things. It's just right in their sweet spot. And so, yeah, I, you know, clubs ought to be targeting on and we all we think of it in a couple of ways Yeah you know you get the 6065 and over a group you're pretty set in your way at the club get that mid age group and they tend to they've got money and time. They're using the club quite actively more golf players played and things like that. And then you have the young family that's sort of 45 and under. So but that's the future, right? The older group is natural attrition. You know, they they move to Florida. Obviously the biggest thing is people get sick, they pass away or whatever they need to be replaced. And so that young group and that early 40s is is ready to come in and replace them. I think you've got a lot of people that are if we're offering the right things that they're looking for.
Ed Heil [00:19:37] Right. And I think that I mean and hence the I think the crux of the conversation because you know so many well, you hear generational experts talk about the country clubs don't mean the same thing to this younger generation than it meant to say the Boomers. And there are so many things they're interested in, whether it's travel or just other activities, experiential things with their with their families. Right. That you hear generational experts talk about. So given all that, you know, while there is this population that, you know, this this market, if you will, that's potentially available or that clubs can go after. What do clubs need to do differently, in your opinion, as a as it relates to amenities, messaging, how clubs position themselves in the experiences they offer these 42 year olds?
Frank McMahon [00:20:36] Sure. Sure. Well, I think I think the big one to really think about is their approach to to family is I've often said that the young the young members coming to the club today are bringing their children with them. But the punchline for all that is that they expect you the club to be actively programing and and ways kind of taking care of those kids while they're on campus. I think historically you go back to, you know, the Boomers and even pre prior to that children came to the club and it was almost a sort of, you know, you know, it could be seen and not heard sort of approach. Right. And and if you took your kids to dinner at the club, they were going to sit at the table and you were going to figure out how to keep them under control that whole time while they were sitting at the table and and making sure they weren't, you know, upsetting the apple cart and the quorum of the dining room or the club in general. They might have even come in with their little blazer on. Right. Right. To come in and set at dinner with you. Today's young family says, well, we're coming. We're going to have dinner. The kids probably are going to get a little rambunctious. Are you going to show them a movie down the hall and they're going to be able to go to the game room or you're going to do something for them? Of course, aren't you? While I'm having dinner, you know, and they they really have a hard time understanding why you wouldn't be doing that. And and frankly, it's not all that complex. It's not all that difficult to do. We typically have a lot of space and and all that, but it's about programing to ease that. Again, these families are busy, probably both adults. The likelihood that both adults are working is very, very high. So they're crunched for free time, so to speak. And so if the club is seen as, again, that refuge, they may want to be with the kids in doing something. But they also want to know that the family is there at the club and participating either jointly or separately in these kinds of activities. And so, you know, I think as the court looks to to to to satisfy that group, really recognizing that the children are vitally important in that whole equation and and the kids aren't coming to the club to be disciplined or to be told to sort of sit down and be quiet. They want them in. You know, they want them to learn something. They want to make sure that the junior golf or the junior tennis or whatever programs are, there's real instruction there. There's real training that goes along with that. I mean, I remember junior golf, right, was the mom and dad's would walk along the golf course with the kids and you just sort of made sure that nobody got hit, had with a golf club was kind of, you know, watching her golf was all about today. People want their junior golf the. There is instruction there and you to go along with that. And so at all levels, it's it's really programing across the spectrum there. And with with for this group in particular a real high priority on that. The families are welcome. Kids have spaces that they can enjoy. Pool locker rooms are no longer it's no longer acceptable to have these kind of, you know, industrial strength pool locker rooms, but something that's kind of attractive of the food and that sort of thing that you're serving now. All those things really saying that the family is really, you know, in the wheelhouse, really part of our mix. And you've thought about that in all aspects of physical facility too, and most importantly programing so that there's there's engagement.
Ed Heil [00:24:10] You know the idea of having club this more family friendly for lack of a better term it's it seems like you'd have a lot of club leaders that would agree with that and say oh yeah for sure, but it's how they they get from where they are to that in some cases that match with the fact that, you know, I mean, you talk to more people than I do. I'm sure in the in the space. However, it seems like everyone sort of a lot of clubs are making capital improvements. And in I know many clubs the decision is might be around something focused on whether it's a golf course and what we're doing with the golf course versus, gee, should we spend more money to update our dining services, to expand more families, family areas? What are you seeing out there as far as you know, where clubs are investing?
Frank McMahon [00:25:03] Yeah, well, you're you're correct in our opinion. And again, the core of McMahon's business as we got into the call, the space 40 years ago was actually an outgrowth of our architectural company and with with really a focus it was going to go around the country and do Cornell architecture and all and a lot of a lot of ways that's still a big driver in our business. But again, it's the strategy and the concepts that go behind that. But overall, that period of time we've been involved in a couple of billion dollars worth of capital projects. And yeah, it's a it's a you've seen few periods, if any, frankly, where there's been more capital spent. A number of clubs as well as the size of what clubs are doing. It's the number of clubs. We all read the periodicals and you know, we certainly experience it firsthand, the clubs doing, you know, 20, 25, $30 million projects, you know, values that are unheard of. And there's obviously some inflation in that. But but it's also the scope and the reinvention and the things that they're doing. So, yeah, they're spending a lot of money, you know, and really across the board, I'd say first and foremost, it is the reinvention of the food and beverage outlets, all of that, that that, you know, the people don't want stuffy and so the formal traditional dining room or the past and all that they want that same sort of feel that they get when they go to the new hip place downtown. So indoor outdoor, you know, the sliding nano walls, the outside sitting areas, the fire pits, the radiant heat so that we can sit outside in a room that's we're not just dining on the terrace. The terrace has actually been reinvented to be an outside dining room. Right. You know, that sort of thing. Certainly the bar areas that clubs are putting in that, you know, again, in the bar itself, as you know probably many members like a like a good drink. But the but the beauty of the bar room and these well, I'll say these pubs and such the clubs are building it's a space that you could just walk into by yourself and just see who's there. You know, I'm going to go to the wonder if Ed's at the club tonight or whatever, whoever just walk in that room as opposed to walking in the dining room and everybody's looking at you and, you know, it's just you and somebody else or whatever. You know, it's it's a it's a communal thing, you know, and a place to meet. So and I think they, you know, the upshot of that also that we always say is right everybody eats right. So, you know, you can you can affect the most members, the hardcore golfer to, you know, the social member who, you know, is just there for dining all them and their spouses and their families all have have the ability and the interest in using the food and beverage facilities. So I think that's been the, you know, probably the top reinvention area that you that you've seen. But, that continues right on down the line. There's a lot of stuff going on in the golf world. You know, I mean, we again, we think of golf as you make the course the best we can make it. And frankly, the data would often show that, you know, clubs may overspend on on the course itself. But today, a lot of money is going into the practice facilities, the simulators, the golf learning areas, the putting courses, the short game areas, top golf and other features, other other other facilities have shown us there's multiple ways to enjoy golf. And so, again, if you're going to be great in golf today, you've got to have a golf performance center. Or why would your members go to name any names or why would they go to so-and-so sporting goods to get fitted for their clubs? They need to be doing that at your club, right? That's that's why they join the club. And if the club wants to be cutting edge, it ought to have a fitting room. It ought to have, you know, simulators not only for fun, but for training or short game area and all that. And, you know, modern golfers have have seen that. So, you know, in almost all our activities, you know, you can you can talk about swimming. Right. Swimming used to be a swimming pool was a box of water with a, you know, a concrete deck around it. And there were some lounge chairs and there was a snack bar where you could get a, you know, a hamburger or a hotdog. And, you know, that was sort of the fine of the day. That was that was what people felt was there today. You know, the whole vernacular around the resort style pool complex. And there's spray grounds or slides or shade structures, upgraded food and beverage. And, you know, the water is about the same. You just need a good a good place to take a dip. But the environment around that is completely different than what what we had in the past.
Ed Heil [00:29:53] What's the biggest objection you hear from from club leaders when you advise them to do what they can to make their club more family friendly.
Frank McMahon [00:30:05] Well, I you know, it's it's the leadership in clubs like a like a lot of you know ultimately it's a bit of a of a of a political activity if you will. And then you know politics generally skews to the, you know, to to the older demographic. Right. Again, people who have time, they want to get back. They're well-meaning. But, you know, you've got a lot more time to serve on a club board if you're in your 60s than when you're in your 40s. Right. But again, unfortunately, there's a big disconnect, disconnect between what this what the 60 year old may be thinking and what the 40 year old really wants to buy. And, you know, and that's that's not to criticize. I'm I'm certainly above that myself. And, you know, not not all folks in that age group means that they're resistant to change or opposed to it. But I think it's often hard for them to really appreciate it. Right. And to really, truly, truly sense that demand and and always have a level of skeptical skepticism on this as well. You know, is it really worth the money? Should we make that expenditure this summer? So it's tough for them to walk in the in the shoes of that young group. And and, you know, there's often a you know, a sense that, well, they either take what we've always offered or they're not willing to pay up for what it would take to to have these kinds of services. And, you know, the reality is often very different. Again if it's for their family, the millennials are often willing to pay for that. You know, the millennials, on an inflation adjusted basis, the 40 year olds who are out there today make more money than the 40 year old baby boomer did. You know? So they they they are in a good financial position and are generally probably willing to spend it on their on their club. But, you know, I think it's that just that generational divide that's often you know, unfortunately the the to make those investments everybody in the club is probably going to have to pay up in one way or another. Right. So again, getting that that that older member to say, yeah, we ought to expand the fitness facility, we ought to renovate the pool complex. And by the way, you're going to get a, you know, a dues increase or, you know, a capital fee or an assessment to make those happen, You know, and that's why it's important in any capital plan to look across those age groups. You know, you can't just go one direction and say, okay, we're going to focus all our energy and focus all that on the pool. You're doing that pool. You ought to be giving the golfer something at the same time and, you know, doing shopping and dining or whatever. You tend to want to spread that around a little bit. So, you know, each of the each of the age groupings can look at it and think that they're going to get some feel they're going to get some real value.
Ed Heil [00:32:57] Out of it. Right. There is a policy. The politics of it all is is your say. Yeah, yeah, yeah, yeah. So what happens next? I mean, you know, some clubs are going to adapt and change. Some clubs may not and and obviously painting with really broad strokes here because some clubs are you know, not all clubs are the same, right. And different clubs have different ability to do things and these but generally speaking, what is your thought as far as how this plays out as we move forward with the Golden Age?
Frank McMahon [00:33:31] Yeah, well, it's certainly a better environment where, you know, the rich have gotten richer, so to speak. To use analogy, those clubs that can put up the capital have furthered themselves from the rest of the marketplace and even put themselves in even stronger positions than they were than they were in previously, which again, can, you know, eat up, you know, eat up the demand in the marketplace. Some of them have created capacity. And, you know, that allows them to expand their membership a little bit and things like that. Said the other way, right now, if your club is not doing very well in this environment, I'd be really concerned. You know, at the club today, that's not what I want. You know, we we we believe and the data suggests that more than half the clubs in the country have a waiting list today. So, you know, if you're in that other half and you're not close, well, then you you know, you've got some some real concerns. And, you know, it's it is time to shake it up a little bit and see that, you know, what what innovation can you put in there and how can you rally to do things? I think in a lot of ways, it's you know, we see those big projects as we're talking about, but things can be scaled. And that's, again, what we were talking about earlier about the innovation period. You know, I have a client that comes to mind Manor Country Club outside the Baltimore area. They had a, you know, a snack bar area that was, you know, the golf. First made the turn there. They put some money in that. They put some shade structures outside of it, bought some new furniture. This was not a big expense. And all of a sudden they had a really valued casual outside area on a lawn where people could just come in and chill and they were able to put a little money in the cooking equipment and picked up. You know, expanded that menu somewhat. So, you know, this was not a, you know, $1 million rebuild of the of the snack bar. It was taken an existing facility. And if they spent 50, $75,000 on that, but they they got to where they needed to get to for that. So I think a lot of times, you know, the there's a thought, well, we need to blow the whole place up. It's often very valuable to to incubate programs and, you know, move ahead with, you know, at least get your toe in the water and start to do things. I think the smaller clubs can do that. The trends are probably going to be the same across those demographic groups. You know how much you can do with each club will be determined by the market location and the support of, you know, the overall financial wherewithal of that community. But society's moving in the same direction. And and I think the goalposts are the same. You just have to figure off, you know, figure out how much of that you can bite off at any one time.
Ed Heil [00:36:30] Yeah. You talk about the clubs that are not maybe the clubs that don't have waiting lists for clubs that maybe aren't doing aren't doing real well. Obviously, change is something that I mean, they might as well think about it, right? Let's do something different. Shake it up. What about the clubs are doing well that that are sitting on their hands. Is there a risk in being cocky at this time?
Frank McMahon [00:37:00] Yeah. Well, I'd I'd say, you know, it's funny I the experience when I, you know, sort of first in the in the club industry, you would go and sort of make a sales call for lack of a better term. And then a lot of times, you know, we find ourselves in the metropolitan New York area and you go into a club and you might have had a pretty famous sort of brand before you showed up. You had a perception of, well, this is really a special place. And you got there and you looked around and you're like, Wow, this is this is not all that impressive on the surface here. And then you talk to some of the club leaders and everything else, they're like, well, it's fine. We're full, you know, So why why do we need to do anything where, you know, we're doing great. You know, so. And so, you know, that was just instructive for me that, you know, Yeah. Resting on your laurels or sitting back and saying, yeah, it's fine. That's that's not going to be a valued, you know, a valued club or valued membership down the line. You certainly see that in the Florida market today where, you know, some new and innovative and big clubs have come on and some of these clubs have spent. I mean, talk about club spending 30, 40, $50 million. All of a sudden, some of the older clubs in some of those market places, you can go on the west side of Florida right now and find some folks that were the market leaders, you know, a decade or so ago. And right now, they can look down the street and find that boy, you know, brand X as all of a sudden, really about quite you've got a lot going on over there, you know. So, yeah, I think in any business, you know, leaders need to be thinking about that 5 or 10 years and and challenging sometimes that's harder. You know, for our conversation a moment ago, we always say, you know, it depends on how much pain the club is in. Right. You know, in any business, if you're if you're, you know, staring at solvency or viability, you're probably at some point say, okay, well, let's try that because this isn't working, you know? You have to guard against that notion that we're there. Right. We're done. And so, you know, and and you see that a lot of clubs, clubs, clubs tend to approach both strategic planning and capital planning in an episodic way. Okay. We're going to do a strategic plan and we're going to check that box and it's done, or we're going to do a capital plan. We're going to go out and we've spent a lot of money here in 2025, and that's going to be done. And we're never going to have a capital program again, you know, or, you know, almost that that's inferred or assumed or sometimes even used as the language of selling the program as well. We haven't done anything for a decade or two decades or we're going to do this and then we're done. What we're trying to get clubs to realize is it's, you know, it's much more of a flywheel approach. You've got to put some investments in. You're going to create some new programs. You're going to have some new activity. Hopefully that's generating some new membership and new interest. But then you go back to the beginning again and you you know, you do your research to find out internally and externally what do people want? Are we providing it or what's next for us that you could continue to, you know, continue to do and to, you know, to push the thing forward and so know that that can you know, like I say, sometimes that can be a tougher, a tougher, you know, sort of sell or a tougher mission because, you know, everybody else is just sort of sitting there saying, well, it's fine. You know, gosh, we're full. We got a waiting list. This is just great, you know? Well, on the facility side, you know, facilities are always in some state of challenge. They're aging. And so there's some level of deterioration and, you know, getting enough capital to either maintain or improve is always a battle. Also, they you know, they might sit on their hands relative to that where if they could take an a more consistent way and manage their resources work under the concept of a of a long range plan and always be looking ahead. That's you know, that's what the great clubs can do is what a great organization can do.
Ed Heil [00:41:02] Yeah. Awesome. Frank, thanks so much for your time and for your your thoughts on this.
[00:41:10] And thank you for listening. If you find the content from this episode to be helpful, subscribe to Crushing Club Marketing wherever you get your podcasts. Until next time, keep crushing your club marketing.
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In the world of City Clubs, Jeff McFadden is well known and well-respected. As the CEO of the Union League of Philadelphia he has developed a national reputation as a club leader. Ask GM's who know him and they use adjectives to describe him like "Brilliant", "Visionary" and "remarkable."
In this episode, Jeff shares his involvement in transforming the Union League from a club in financial trouble generating about $7 million in annual revenue to a club that does about 100 million annually. He also shares his perspective on breaking away from old financial models and how to engage new, younger members with long-time club personalities. Is now the time to double down and invest in your club? Listen to Jeff's thoughts on that topic as well.
Noteworthy Moments:
Jeff talks about making the leap to the Union League - 3:45 Park it! The Union League buys a parking garage - 9:07 Building your granddaughter's club - 13:21 Thinking differently about the financial future and the "right way to run a railroad" - 15:25 Change management and getting the right people on the bus - 19:03 The city club and more. Building an investment portfolio - 25:52 How Jeff views appealing to different member demographics - 35:06 Is this the time to invest in your club? - 39:28Episode Summary:
For club leaders who feel stuck in the "same old, same old" Jeff provides a fresh take on some long time issues. He also offers some insightful thoughts around managing the issue of engaging younger new members while keeping long time members excited about the club. As the General Manager, now CEO of the Union League of Philadelphia, Jeff is gone from managing day to day operations of a city club to running a $100 million business. If you're someone hoping to create this kind of growth at your club and this type of career track for yourself, you'll appreciate Jeff McFadden's Perspective
Let's Connect
If you find Crushing Club Marketing helpful please share it with a friend and be sure to subscribe and rate this podcast. Also, find more information on private club marketing services from StoryTeller, check out our website here. If you'd like to connect with Ed Heil on LinkedIn, feel free to send a request!
Transcript
Ed Heil: [00:00:00] You're listening to Crush and Club Marketing, a podcast for progressive club leaders looking to increase their club's revenue. Time for Change begins right now. In the world of city clubs. Jeff McFadden is well-known and well-respected as the CEO of the Union League of Philadelphia. He's developed a national reputation as a club leader, as GM's who know him and these adjectives to describe him like brilliant, visionary and remarkable. In this episode of Crushing Club Marketing, I catch up with Jeff to learn more about his involvement in building the Union League from a club in financial trouble to a club that does about 100 million in revenue annually. He calls it accidental brilliance, but there's more to it than that. [00:00:44][44.7]
Ed Heil: [00:00:46] Your name has come up in so many conversations regarding just what a strong leader and visionary you are and in the work you've done at the Union League. And I know that it's difficult to talk about yourself in that way. But there was a quote that I read from Jason Straka from the Frye Straka, a global golf course design firm and Jason Straka, said Union League CEO Jeff McFadden is one of the most respected general managers associated with the golf business. He's credited with vastly expanding the Union League's social and business opportunities, knowing that many of their members on a vacation home down on the Jersey Shore and or vacation there quite a bit. Jeff saw an opportunity for a second golf facility, and obviously this is referring to one of the the golf clubs that the union now owns. But when you hear those kind of accolades, and that, what goes through your mind. [00:01:46][60.0]
Jeff McFadden: [00:01:47] Well, first of all, what goes through my mind is I pay Jason, which is a good thing. And that's probably why he had those nice accolades about us. But when he and Dana Frye did at Union League, National is just over the top. It's the Disney World of golf. It's spectacular. Over the last year, 27 holes. And now we're proud. I'm very proud of what I did. I think a lot of what we've done over the last 25 years was accidental brilliance through really just perseverance, hard work, you know, trying to get the right strategy and then keeping your head down and, you know, working through what you could do and keeping a smile on your face to, you know, that's. [00:02:27][40.1]
Ed Heil: [00:02:27] Yeah, well, you make it sound simple and, you know, I guess when it comes second, nature probably feels simpler. Although I know it's not always been super easy, as is. Most jobs are when you're there that long. But 25 years, you know, that's a long run. And your first two jobs in you know as I think GM and both both jobs five years and three years which is pretty typical, right. I mean, is that do I have that right? Help me out with that. [00:02:56][28.7]
Jeff McFadden: [00:02:56] Yeah. No, When I graduated the hotel school at Cornell, I went to the Cosmos Club as food and beverage manager, got promoted to assistant GM clubhouse manager. And then my first GM job is in Denver, Colorado, at the University Club, which I never thought I'd move back to the East Coast from Colorado. But I did. Yeah, right. When I got headhunted to go to the Union League at at age 30. So good times. [00:03:20][24.1]
Ed Heil: [00:03:21] Guess, you know, at age 30. What did the Union League see in you at that age, especially looking back now? I mean, what's it like looking back now and, you know, knowing what you were like then? I mean, what do you think they saw in you that time? [00:03:34][12.4]
Jeff McFadden: [00:03:34] Well, I think in in reality, I think I was the fifth person they offered the job, too. So, you know. [00:03:40][5.2]
Ed Heil: [00:03:40] You sort of you I wish I got I got a vet that won out. But yeah. [00:03:44][3.5]
Jeff McFadden: [00:03:45] You know, right place, right time, situation. It just worked out well. The league was struggling in the late eighties, 1990s, as Philadelphia was struggling quite a bit before Ed Rendell, who was a gregarious mayor, wind up becoming governor of Pennsylvania. Just a terrific leader, inspirational type of person. So, you know, when I was young enough, probably dumb enough and not experienced enough to know what I was getting into. And the the more senior statement statements in the club industry probably looked at the league and said, I don't want to touch it. Right. It's it had sort of had terminal cancer. At the time it wasn't bankrupt, but it was very close to bankrupt. But I saw that it had great bones as well. It had a great foundation. You know, at 30, you think you can change the world? I think I've done well in changing the league. And it was just being again at the right place at the right time for the right situation. And we made a bad decision or a mistake. We were young enough to outhustle the mistake or the bad decision. Right. [00:04:57][71.7]
Ed Heil: [00:04:57] That's interesting. So what has made you successful for so many years? I mean, if you just take the years alone, that's an incredible achievement in in the private club space to be at one place for 25 years. What do you think has made you successful in that role? [00:05:13][15.8]
Jeff McFadden: [00:05:13] Well, I think the way we acquired and operate the club as sort of, you know, being an innovative type organization. Now, when I did my independent study at Cornell, I studied close to 5000 city clubs throughout the world. It was from the 15 person City Club to the to the club that had 5000. And you needed three things. You needed to have parking, you needed to know, because I gave members assurance coming in from the suburbs that they had a place to park. As you get older, you have more net worth to spend. You get a little worried about where you're going to park. The data showed that that was a huge part of being a successful city club. Yeah. So we bought a parking garage right when I got there, and then we just doubled our revenues in in less than one year. While the number two thing at the greatest city clubs in the world shared was they never sold their land and built the site skyscraper and put their club at the top of the building because eventually the I guess after the data shows after three days that you went away and then the elevator became a barrier to entry, there were a few clubs in New York, Manhattan and Tokyo that buck that trend. Windows on the World, that was a public restaurant. There was a small private club component of Windows on the World. But truly, if you were successful, members had to walk into your club, right? So the league had that as well. And then you need overnight rooms. You have all the expenses running a club, marketing, administration, engineering, you name it. If you add some overnight rooms to the equation, the profitability or the surplus that they could throw off departmentally, you know, $0.60, $0.70 on the dollar really were work well. So I was able to. Run those three things when I first got there and then reinvest into the club with incredible dining business centers, cigar bar, you know, fitness centers, that sort of thing. And so for if I look at my 25 years, the first ten or 15 was taking that incredible foundation that the league was all about. Investing in that. Growing, growing the institution. And then after ten or 15 years, we use the profitability or the surplus that was gained to really have a longer strategic plan that we entitled "Building Your Granddaughter's Club". Yeah. And and that was you know, that was sort of a light bulb moment, like, okay, are we just going to be the greatest 1965 club in 2005? Right. Or, you know, in in 2025, were we going to be what your granddaughter and great granddaughter are going to want in a private club? You know how to how do they socialize? How do they use it? You know, we started asking ourselves all those questions. [00:08:13][179.3]
Ed Heil: [00:08:13] I love that. I want to come back to that next, but if we just step back to you being 30 years old, when you took that job and, you know, you come in and, you know, buying the parking structure and then you started, it sounds like, you know, in the first ten years, there's a lot of innovation and things moving forward. And I know that some of the games that will pay attention to our conversation, they're younger. There's definitely a trend towards a lot of younger jobs or it seems that there is. How did you get their trust, at that you know, I mean, and what was the mindset of the board? Were they just like, hey, we've done our homework, We know Jeff's the right guy, let him go do it. But, you know, there are a lot of clubs out there who are like, Yeah, we'll get him in there, but we'll just tell him what to do. I mean, how do you know what I mean? How do you get in there and earn their trust and really go like that? [00:09:06][52.7]
Jeff McFadden: [00:09:07] So and is fortunate enough to be in the right place at the right time, as I said, because of their how they were struggling financially. But with that said, you can't go in and change the world overnight. You need to start small, you need to show a small victory and then capitalize on each of those victories. You know, as they say, having, you know, having, you know, one bite at a time, you know, you just that's way you have to do it. I think we we had, you know, coming in in 1998 on the heels with Ed Rendell being the mayor of the Republican National Convention, was held in Philadelphia in 2000. We had a tradition as a Republican club. So that was really, you know, helped us springboard into reinvesting in our facilities. But I convinced them to do little things, that the garage was a big thing. But we had already started putting new carpeting, new wallpaper, you know, one dining room at a time, hiring younger, more robust, enthusiastic, vibrant servers and studying what people wanted on food menus and that and so forth. And we just basically started with one dining room and then did another dining room and then did a bar and then bought the parking garage. And the parking garage was, was a struggle. We it was a first assessment we had at the league in 50 years. We did not have a lot of support for it. Yeah. So we, we did wind up getting about 67%, 68% in favor of it. Yeah. And, and I figure just a quick story. I was very transparent because I was I was very young at that time. So I shared everything. I still and I still am as transparent as they come. I just don't lead with my chin. Right. What's actually going on in things? [00:11:01][113.7]
Ed Heil: [00:11:01] I gotta remember that. [00:11:01][0.6]
Jeff McFadden: [00:11:02] Yeah. You know, it makes talking so much or sharing so much as being transparent. I know that's not necessarily people want to be let right. Need to be led and you want to be transparent in everything you do. You just don't need to tell everybody everything every minute of the day. Right? [00:11:19][17.4]
Ed Heil: [00:11:20] Right. Yeah. No doubt. [00:11:21][1.1]
Jeff McFadden: [00:11:21] With social media and, you know, it just seems that's what the next generation is doing. Right. So we were we were we were trying to figure out we needed to do an assessment. It was very was it very much about $2,000 a member. And we you know, they were hemming and hawing about paying that. And and one member said, could I get my money back at a town hall meeting? And I said, Mr. Grossman, you are absolutely brilliant. That's a great idea. We're going to make your assessment refundable. All you have to do is propose a new member. And it was like a light bulb went off and we ran with that. You had actually proposed two members you got $1,000 back for your first member, 1000 for your second. I love it. This is back in 1999. And basically all the naysayers and we still had it still 30 to 33% of the people voted against it. I would say to them, I said, you don't have any friends or colleagues or business people that you could propose to become a member of the league to help us out, to make sure, you know. And that was on top of all the importance of parking, obviously. Right. And then we were about a $7 million operation. We bought the parking garage. And I think the next year after it opened, we were 21, $22 million operations. Wow. Doubled, tripled what we were doing. And all it is is take the you know, the folks from the mainline or from South Jersey who are uncomfortable coming into an urban environment. Yeah, we just assured that they had parking. Right. We just said we have valet parking. It's right next to the club. [00:12:59][97.8]
Ed Heil: [00:12:59] Yeah. Safety and convenience. [00:13:00][1.1]
Jeff McFadden: [00:13:01] Yeah. [00:13:01][0.0]
Ed Heil: [00:13:02] Exact easiest things. [00:13:02][0.8]
Jeff McFadden: [00:13:03] Wow. So and so. I rode that pony for a long time,Ed, the parking garage. You know, work magic for me for the next ten years. [00:13:11][8.5]
Ed Heil: [00:13:11] Yeah, no doubt. I love that. Let's talk about building your granddaughter's club. When did you come up? When did you, like, come up with that phrase that I love that I read that one of the articles. [00:13:20][8.6]
Jeff McFadden: [00:13:21] Yeah. It just, you know, obviously being a men's club for so long, over 125 years of the men's club, we allowed women in 1986. The idea is there's there's so much connotation in that phrase granddaughter building your granddaughters time, meaning that we're becoming progressive more, you know, more forward thinking, more inclusive. And I also got everyone thinking not about themselves, but about the next generation and the generation after them. So I think that's almost more important than than the gender identification of saying building your granddaughters club the to show and to get the culture of our members to think that yes, we've been here 162 years, we're going to be here another hundred and 62 years. Let me not get tied up in minutia of today, but think about tomorrow and you see this and golf clubs and country clubs where they fight over a new irrigation system, you know, an 80 year old to say, hey, I don't want to pay for the new irrigation system. I'm not going to be here. Right, right, right. And you say to that person, well, you're not paying for the new irrigation system, you're paying for the irrigation system you consumed over the last 30 years. Right. And and and that's the sort of the mindset that we started to and now people are like they're proud when we build we have built into their views a capital do structure but they're proud with the the advancements that we have made, the investments that we've made and they don't they don't think of it as for them. They think, Wow, my granddaughter and my grandson are going to love this place. And it's just a little nuance, a little change. [00:15:05][104.6]
Ed Heil: [00:15:06] But I've not heard people position it like that. What has been your overall philosophy, you know, and how do you share that as far as like keeping people thinking forward? Like, is there an overarching sort of, I don't know, almost like value or belief that you have that you sort of, you know, live by that way? [00:15:24][18.3]
Jeff McFadden: [00:15:25] That's a it's a great question. Yeah. I think it's it's always thinking about the future. And I and I and I tell members and a lot of clubs do not do this. We have $54 million in debt, which people are like, Oh, oh, that's a lot of money. And then I don't know. And we also have $20 million in the bank, right? And if we had saved a dollar per member per month since our inception in 1862, yeah, we'd have $1,000,000,000 in the bank. And when you tell stories like that to members and you know it resonates and it gets to them that, you know, you're you're not just here to enjoy the club, but you are a steward of the club. You are a steward of the institution. You know, you need to think of it in that capacity. And for 100 years, clubs never did. Right? Right. They matter of fact, to this day, your investment income of a 501c7 is taxable. So I'm trying to tell people that they need to start a foundation to do a charitable set aside for their foundation. Do you know, do well by doing good in your community and people? Some of the greatest clubs. And I'll say, Jeff, we don't have any investments, we don't have any investment yet. I said, What do you mean? You're Aronomik, you're Marion Golf, you're Pine Valley, you don't have investment income. Like now we don't have any debt, We don't have any savings. We live hand to mouth, right? And then we assess for when we want to build something. I said, I just don't think that's the right way to run the railroad. I think, you know, you you boil the frog slowly, you add capital dues monthly into your regular dues, and you always plan for the future. You don't you don't pay off your mortgage without saying without saving for your kids college education. Right. It's right. It's not rocket science. [00:17:26][121.7]
Ed Heil: [00:17:27] Yeah, well, but why don't more ask why is it so commonsense? You But I mean, so many clubs operate exactly how you just explain it. [00:17:35][7.3]
Jeff McFadden: [00:17:35] Because they let emotion get in the way. You know, they bail They they you know, we're all self-serving, though, don't get me wrong. I'm self-serving as well. But, you know, if you don't have the mentality that you're part of a greater good. You know, you can easily get into. You know? You know, what are we spending today and how can I have the best results and the best experience at the least cost and. And group think happens, very quickly, you know, great leaders, you know, can change culture quickly and then you can get into the abyss quickly as well. In that group thinking and psychology of pricing, whether it's dues or golf fees, food and beverage, menu prices, whatever is important to understand because people want value, right? They still want value, and yet they're going to do that. And we're trying you know, we're trying to ride the wave, tap into a new way of thinking, a new way to run finances and hopefully don't take off. [00:18:37][61.9]
Ed Heil: [00:18:38] And I mean, what you're saying just makes so much sense. But let me throw a wrinkle in on this where it's like a lot of times people will join committees of clubs, they'll join boards and clubs because they have something they have an agenda that they are pushing, right. And they want to get one. I get that. I'll make sure this gets done. How do you how have you been able to manage that? Because that's like that's such a reality that people struggle with. [00:19:03][24.8]
Jeff McFadden: [00:19:03] Well, that takes investment, believe it or not. And here's the investment. The answer is yes. Now ask me the question, says a club professional. You have to have the ability to take no off the table. Not that you can say yes to everything, but a lot of people get into committees and committee services because they haven't been satisfied by the team or by the professional folks they weren't listened to. More often than not, it's not one or the other, right? It's not, you know, should we have sesame seeds on our bun or should we not have sesame seeds on it? But by the way, I've had that conversation at the board level, which is idiotic. You know, you have to believe the right thing. So love it, right? We always tell folks, don't waste your time getting on a committee, because the answer is yes. What do you need? What do you want? We're here for you. And I train everyone never to say no. Even if you know it's impossible. You always say, Let me figure it out. Let me see if I can get back to you and come up with a couple of solutions that may not get you all the way to yes, but takes no off the table. Sure. The other thing we do with committees, which I think is brilliant and I thought it because I stole it from the Missouri Athletic Club and it's worked really well, is that we don't allow anyone to serve on a committee unless they have proposed successfully proposed amendment. Interesting. So one of the things you have, I mean, if you get in a very domineering type member who wants to get on committees and has very strong opinions about something. Nine times out of ten, they have not proposed a member because they usually have a bombastic attitude or they're so aggressive. Nobody wants you know, they're just they're a bull in a china shop. And so we put that qualification in that you have to successfully propose the member to serve on a committee. You need to answer a whole bunch of questions, fill out an application and send us your CV, which is another high hurdle to get over. And then we limit our committees just to 3 to 5 people with two professionals. So the total committee will be 5 to 7 and the two professionals have a vote and we only put on committees those who have an expertise and whatever the committee is doing, you know, which drives me nuts when you have the dentist, you know, as chair of the Green committee, you know, and the gardening and all of a sudden he's an expert on agronomy. [00:21:35][151.7]
Ed Heil: [00:21:36] Right, Right. [00:21:36][0.4]
Jeff McFadden: [00:21:36] Yeah, right. So we'll have that. Instead. We'll have the person that owns the garden center. Right? That's the excuse me. That's the national alert. We were talking about getting a. You know, we want to make sure. So on our food and beverage committees, we have restaurateurs, we have hotel people, we have staffing h.r. Directors who staff for hotels. So we we're pretty smart. We try to put the right people in the right, in the right position. We try to push decision making down to the subcommittee level as best we can. And then quite frankly, the answer is yes. And it defuzes a lot of that tension that you have between members. And then if you couple that with a capital dues at party or regular dues, you don't have to ask for assessments where you could get the tennis racket players fighting against the golfers and the golfers fighting against the wine, people on the wine, people fighting gets the fitness people and the older folks fighting against the younger folks who have kids. And you're putting money into child care and baby pools and that sort of thing. Yeah. So by building the capital into it, into the, you know, you hopefully can trigger projects that are the right decision at the right time. I have a woman right now who is a member, I love her to death, you know, a part of our ten year master plan. We have we are not going to build a outdoor family pool at one of our locations until 2029. And she looked at me and she goes, Jeff, I have an eight year old, ten year old and 12 year old building in 2018. 2019 is not going to serve me a purpose, right? Yeah, exactly. So, yeah, you know, so I have to understand that I have rationalized that over. [00:23:26][110.4]
Ed Heil: [00:23:27] The course of the last. Gosh, what since you've been there in the last 25 years, you've the club has purchased restaurants and golf clubs, and for a city club you don't hear city clubs doing that often. What, what was behind this and what is behind it? And is this just part of the mission and what you see going forward, you know, for years to come? [00:23:49][22.2]
Jeff McFadden: [00:23:50] So we were studying city clubs for a while and you know, back in 1967, we served 2500 lunches a day. Right? It was it was, if you remember, the old movie Trading Places with Eddie Murphy. That was the Union League, right? It was Mortimer and Randolph. Duke and Duke. Yeah. And so lunch was losing. You know, the urban downtown environments were changing, becoming much more residential. The younger kids were moving in and we started to think long term, how is your granddaughter going to use the club versus your grandfather? And we and we just we really started to just think and do some studying about trends and and thought patterns. And it really dawned on us that these younger generation wanted more experiences. Right? They didn't they didn't do the same thing over and over and over. Their grandfather would dine at the same table, you know, every Saturday night, 50 weekends a year, right at Philly Country Club and sort of have the same menu item. Their grandfather had five friends. Their granddaughter now has 500 friends. Right. So the way he or she socializes in a club is totally different than the grandfather, though you typically would find the grandfather on the board making decisions. Right? [00:25:10][80.2]
Ed Heil: [00:25:10] Right. Totally. [00:25:11][0.4]
Jeff McFadden: [00:25:12] We had to kind of think through that. And they and then we thought, you know, the granddaughter only eats out at her favorite restaurant three or four times a year where the grandfather again, a 50 times that is her, right? Yeah. At their favorite restaurant, you know, And then they saying that the granddaughter wants a condo in Manhattan and a condo in Manhattan Beach and it has more of a lock and load mentality, experience driven versus a $10 million house. You know, we're in Grosse Pointe with ten bedrooms on ten acres, and the next generation just doesn't want that. [00:25:51][39.2]
Ed Heil: [00:25:52] For sure. [00:25:52][0.2]
Jeff McFadden: [00:25:52] So we started to to to to think about what could the league become and we started to think a lifestyle club. So can we get them in? It's not just a city social lunch club, but it could be more of a lifestyle club offering more experiences, more amenities. At the same time, we realized that because we had increased our revenues by so much with the parking garage and some of the smaller investments we've made, we realized scale was important. So not only was the next generation changing how they wanted to use the the club and socialize within a club environment, we realized scale is important because clubs have just gotten downright expensive to operate 100, 125 years ago, in the golden age of private clubs, immigration was inexpensive, labor was cheap. There was no environmental laws. There was no. Health care. So you. You know. Tom, Dick, Harry, Sally could start a club back in the early 19th century or 20th century and be very well and be very successful at it. If you look at Detroit or Boston, Westchester, New York, Philadelphia, there are a lot of clubs that were started from 1890 to 1920, the Golden Age. And so that that hit us like like, like a sledgehammer. We needed to increase our top line because our expenses were more were very high. But we also started small. I don't want to anybody think we had this grand strategy or, you know, we have three country clubs now. We'll soon have 81 holes of golf, two independent restaurants that are members only that are really cool, tony type restaurants that you you can't eat in unless you're a member. But it didn't start that. It was very slow. As you said, I've been there 25 years. And people say, Jeff, what you've done to the league overnight is incredible. Like time. It's been like the Bataan Death March in some respects, though, obviously we respect veterans and everyone who gave their life for this country. You know, a quick story about our first acquisition was this little 100 seat restaurant in Stone Harbor, New Jersey, a block from the beach called the Bungalow. And it was just truly accidental brilliance and luck. And we started very small in branching out from from Center City, Philadelphia. I was down staying down the shore with a board member of the league. My wife and I were staying there and we were playing golf. It was July when Philadelphia was just completely empty because everybody goes down to the shore. And I figured that out. You know, I didn't realize it at the time. I figured out shortly after this new swanky hotel called the Reeds, it was just built in on the harbor of Stone of Stone Harbor. So the board members, let's go over, have a drink. After topside went over their back deck overlooking the water with all the boats. And I run into like 20 members. I'm like, Oh, Mr. Turner. Mr. Smith. Oh, man. It was like, Oh, and it was great. Brand new. They put like, you know, 80 million into this place and it was fantastic. They said to Jules, my wife, I said the next night before we go to dinner, let me, let's, let's go show you the reeds and we go back to The Reeds, back to the back bar on the deck overlooking the harbor. And I run into like 20 more members that were magnificent. The numbers are around on Friday, and I'm like, Wow, A light bulb went off. Yeah, where everybody's at. And so we quickly did some data analytics realize that over 65% of our members spent two or more weeks at the Jersey Shore. We then did some zipcode analysis. We found that most of the wealth was moving from Atlantic County, which is home of Atlantic City, little north of Cape May, down to Cape May County, the Avalon Stone Harbor, Cape May area, Ocean City area. Yeah. And we bought a $600,000 restaurant that was in a fire sale because there was a tax lien on it, put about another 600,000 in. So it was a million to investment. And it just took off. We had we had it. And it not only took off as a great place to eat because you can't get into a restaurant down there. Plus, you as a restaurateur, you wouldn't start a restaurant there because the season is so short. So it was a real conundrum. You couldn't get. There were enough restaurants seats from July 4th through Labor Day. But you couldn't make enough money as a restaurant tour to open a restaurant because there was only a ten week season. Right? We had 500 net new members join the league because of the bungalow. [00:30:56][303.8]
Ed Heil: [00:30:57] Wow. [00:30:57][0.0]
Jeff McFadden: [00:30:58] So what I said and then with an equity focus group, the whole bunch of them, we found out that they they loved the Union League in Center City, Philadelphia, but they just didn't get there enough to use it. But now you couple the bungalow down the shore in a marketplace, you can't go out to eat because you can't get a reservation and all of that, except I'm willing to join the league, pay dues because you have Center city. And the Bungalow brought us to buying Torresdale buying Sand Barrens which became Union league National. Buying the Ace Golf Club and Chubb Conference Center and buying the guardhouse in Gladwin. So we just kind of over the next ten years, kept adding properties that grew our membership, our net membership. And if you think about layering that onto the thought process that your your grandchildren are going to have 500 friends. And you need scale because clubs are expensive. It just started to click win, win, win win, Right. You know, and and and these cranky old small clubs that the kids don't want to belong to. They all want to belong to the league now. And we just changed our strategic plan to be called from 28 to 88. And that the concept is not only are we a great club, but we want to be a great club that you're a member of for six years. Yeah. So we get you we get you in Center City when you move in after university in college, we keep you when you move out and have kids. And when your parents die, you inherit the house down the shore. We have we have two properties down there to keep you until you're 88. Wow. That's the concept. [00:32:45][106.8]
Ed Heil: [00:32:46] That it's remarkable. I mean, and so far, no regrets. [00:32:50][3.2]
Jeff McFadden: [00:32:50] No, no regrets. It's just it's a it's not fun for me or not as rewarding for me as much as when you operate one location. You know, I got into hospitality, pealing potatoes at the age of ten and sort of never look back on it when I talk at universities across the country. So how did you decide to get into hospitality? Well, I never did. I just started working and just never stopped working. Right. I just I didn't I didn't conscientious like, think I was going to stay in hospitality. The one regret, though, is that, you know, we have 1200 employees now. We're over 100 million in annual revenue. I miss the satisfaction of day to day operations and people. Jeff, you have the greatest life. You know, you're not responsible. But yeah, but you don't realize, you know, it's the intrinsic value you get from. [00:33:44][53.8]
Ed Heil: [00:33:46] That intimacy. [00:33:46][0.2]
Jeff McFadden: [00:33:46] Location. Right? And one one. So I miss that. [00:33:50][3.1]
Ed Heil: [00:33:50] Yeah, for sure. Interesting. What a machine, though. It's amazing. I got to call you on this show because you've used the term accidental brilliance and luck in a somewhat different spot here. At some point, it's no longer an accident, and it's probably not luck either. But what I'm wondering is, you know, 28 to 88, you know, that is something that I think that a lot of clubs would aspire to be, you know, to say or to to be able to pull off. And yet it's also very difficult for whatever reason, you know, for the reasons you've talked about as far as like appeasing the, you know, just two different generations or maybe three different generations in many cases, for people who are listening to this podcast who are like, you know, you don't have as well. Yeah, well, McFadden has this or he's done that or, you know, somebody who knows you have to. It starts with a vision. It starts with a belief. It starts with great membership, obviously, and, and visionary people. But for people that are listening, that are struggling with how to how to make changes to their club, to appeal to a younger membership, but also engage their aging membership. What what do you say to them? [00:35:05][75.0]
Jeff McFadden: [00:35:06] Well, you got to figure out how to bring those two groups together, right? If you want people to live longer, you've got to surround them with younger people. Right. And that's the easy part. The hard part is getting the young folks to value older folks. So we look at multiple activities that an eight year old and now being very, what your eight year old can do that, an 80 year old. So that's them. But things like bowling. Right. I mean, as silly as that is, it's a thing that a young person can do. An old person do pickleball. Young person can do and an old person can do. Yeah. You know. Lectures and education. Social programs are real important to bring in those young, young people. Go. I try not to think of serving a younger market. I'm serving an older market. I'm serving a club market and try to bring the two generations of three generations together and then keep things lighthearted and fun. The crankiest old guy, you know, will respond with the young folks surrounded around them in an enjoyable environment. You know, cranky, cranky old club members make more cranky old club members. So you have to just stop that cycle, right? You got to you got to put everybody together and try to get them to enjoy each other's company in light hearted activities that everybody can do. You also have to be, as I say, you can't be all things to all people, but you have to offer enough niches at your club to satisfy multiple generations, right? You need to have. You need to be adding pickle at the same time. You're putting Padel in, you know. You need to have a resort style pool. You know, at the same time, you need an Olympic or half Olympic lane pool. So people in their seventies can stay limber and flexible. So it's not one or the other. The answer more, more often than not, is both. [00:37:12][126.4]
Ed Heil: [00:37:13] You kind of create like a win win in that environment. I mean, is that. Yeah. Yeah. Yeah. It just that is one of those those challenges I think so many people are perplexed with is the do I have to make a decision of one over the other instead of saying, is there a way that you can actually kind of make both parties happy? But like you said, you're never going to please everyone all the time. We all know that, too. [00:37:41][28.0]
Jeff McFadden: [00:37:42] Right. Yeah. And that's the hard part. But with the manager, you know, one of the one of the things that I always tell tell members or other managers is, is I never write a member newsletter. You never see my face in our newsletter. I am not, you know, I hope I'm the like the little I am little short and fat, my wizard behind the curtain. I want I want other I want other folks and basically the president of the club to take all the glory, to be the mouthpiece and so forth. So I think being are 25 years and part of my success of being here 25 years is that I'm not front and center. I am I'm sort of front and center on the professional side, but certainly not on the membership side. You'll never I have never written a column and newsletter. I never write an email from from the CEO or from the general manager. It's always from the president or or from a department head or from a vice president or standing committee chair. You'll never see anything from myself to the membership. [00:38:46][63.5]
Ed Heil: [00:38:46] Awesome. Well, last question for you. With so many clubs doing so well, is this I'm going to ask you a question. I probably feel like I know what you can say, but is this the time to really say, let's invest? Is this the time to take some chances? Is this a time with clubs healthier maybe than they were for sure before the pandemic, to maybe look at some things and making changes and having a little more courage? Or is it, what's your general mindset, especially for those clubs that maybe aren't as healthy and those that are, you know, really trying to figure out how best to take advantage of this time? That is better than it was before the pandemic? [00:39:27][40.7]
Jeff McFadden: [00:39:28] I think the time is right to create the right strategy of constant improvement. I don't think it's the right time to do major, major improvements unless you desperately need it. You know, sometimes you just need to knock a clubhouse down to rebuild it because you're going to spend, you know, good money after bad money, so to speak. But I do think the strategy at all private clubs needs to be we are going to have constant improvement over the next ten, 15, 20 years. We're going to continue to change and adapt and better our product. If you spent if your budget over ten years was $100 million, but that's obviously ridiculous to say your budget was 10 million over ten years. If you spent all that 10 million in year one by year three, your members would say, What are you doing for me now? Right. So I think good leadership will put a strategy in that recognize this is the best of times or one of the best. And it's important for us to realize that we need to have constant improvement. And that's the right strategy. So don't give them it's like your kids. Don't give them everything right out of the bat, you know? Give it to him a little at a time. Keep them excited. You know, don't. If you're going to build some paddle courts, you know, don't build paddle, pickle, padel, hydro, clay courts all in the same year. Now you say, Well, Jeff, it might be easier. Well, do the master plan and then, you know. Dole it out a little bit at a time. Keep people excited about, you know, make sure you have something going on for multiple generations, you know, for the old folks, the middle folks, the young folks. I don't think clubs because we always relied on assessments every 10 to 12 years to do major projects. I think if we get in that we should be constantly improving each and every year and share that with them. And I think you'll keep members and members will enjoy your club so much more. [00:41:33][124.9]
Ed Heil: [00:41:34] Jeff, thanks so much. It's so much fun talking to you today and hearing your perspective on what you've done in the industry in general. [00:41:40][6.5]
Jeff McFadden: [00:41:41] I appreciate that. You're doing a great job. Thanks for having me on. [00:41:43][2.6]
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You’ve seen them on websites and whether you choose to use them or not "Chatbots" and text communication is here to stay for the foreseeable future. On the good side, text and chat can simplify your life as a website visitor, improve your efficiency and filter out your best prospects for membership. On the other hand, it can feel cold and impersonal. And yet, we’re learning how to use them to get what we want without having to wait. So what’s the secret?
Originally recorded coming out of the throughs of winter, Evan Dean from HubSpot helps us understand conversational marketing and how chatbots work best in business. You may bristle at the topic, but remember the next generation members would rather text than talk!
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Hiring outstanding people is really hard and keeping them can be equally difficult - especially if there are management or leadership issues. If you’re a leader trying to figure out how to inspire your team, elevate those who surround you or maybe you’re trying to get more out of your team you may need to take a look at yourself in the mirror and ask yourself am I my own worst enemy? Do you have the kind of people who will tell you when you get off the rails? Do they help you, help yourself? If they do these things, you may have great followers and they are the people who can help you become a great leader.
Dr. Sue Tinnish says great leaders need great followers. But what does that mean? And how can a leader develop great followers? Dr. Tinnish is an executive coach with a PhD in Organization Development. In this episode, we dive into the idea of great leadership and "followership".
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For the first time in years, many private clubs have a waitlist for new members. For the clubs who have always had waitlists, this is nothing new. On the other hand, hundreds of clubs are learning to manage a waitlist for the first time. This is both exciting and terrifying with members lined up to join clubs and with membership directors wanting to make sure these "hot" prospective members can be converted into full, dues paying members.
Jason Becker, the CEO of Golf Life Navigators, recently surveyed more than 500 people to learn what people will and will not tolerate as it relates to Private Club Waitlists. In this episode, Jason shares with us the insights gained and some practical tips for those managing a waitlist for the first time.
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By developing and implementing a strategic digital communications approach to the club’s marketing and communication, Cathy Zehms has created a content ecosystem at the Green Bay Country Club not seen in most private clubs. In her first 4-years membership increased more than 160%.
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What does it take to keep your private club membership thriving during a crisis? Engagement and innovation. That's what Dave Porter and his team at Greystone Golf and Country Club in Birmingham, AL did when the pandemic swept the country in 2020. Listen to how he helped lead his staff and membership through this incredible time.
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When Minnesota golf courses were forced to close at the start of the coronavirus pandemic, Joel Livingood was already preparing for the next step. It's what he's done since taking over as GM at Interlachen Country Club in Edina, MN in 2017. With solid financial footing and a steady hand, Livingood led his team and membership through one of the most extraordinary years in U.S. history.
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At the start of the Coronavirus pandemic in 2020, private clubs, like most businesses were cast into a future of uncertainty. One role that proved to be critical at Bethesda Country Club is that of the membership director. Kris Butterfield, Director of Membership Marketing and Communications expanded her responsibilities in ways she never would have expected and it paid off for her club and for her professionally.
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Chris DeConna is a marketing coordinator and graphic designer at The Ranch Country Club in Westminster, Colorado – and he’s changing the game for club communications. Even though he’s spent about 4 years working in private clubs, Chris’s background is outside the industry. His most formative communications training coming while working in college athletics as a media relations specialist.
By following and observing what athletic departments from the University of Michigan, the University of Texas, and Duke University were doing, Chris recognized they were on to something.
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Getting your club to buy into the idea of social media and starting a Facebook or Twitter account is challenging enough. Getting your staff to participate with meaningful and helpful content can be even more difficult. Yet, Chris Tritabaugh, Superintendent at Hazeltine National Golf Club is elevating his club's international prominence, engaging members and building his personal brand through his Twitter handle @CT_turf.
Chris started his account in 2009, a time when Twitter was just stepping into the light as a communication platform. At the time it had already established itself for those "in the know" as a new social media tool, but for most people in the private club space, it was perceived as risky at best and reckless at worst. Still, Tritabaugh began setting fire to a community of avid golf fans and turf experts around the globe.
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Proactive communication using social media and video kept the team at Pelican Isle Yacht Club ahead of the conversation when it came to a multi-million dollar remodeling project. It was also a key part in a record-setting membership drive that occurred once the renovation was complete. We connected with Pelican Isle's Kathie Pedit, marketing sales and membership director, and Megan Somerville, membership coordinator, to learn their secrets to success.
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You want a younger membership yet you need to retain your existing legacy members, as well. But each demographic has different needs and interests. What’s more, each demographic values things like luxury, status, and relaxation differently.
While some of your older members may go to the club to get away from work, your younger members may want a place to hunker down and treat the club as a second home or office.
If you find that hard to believe, then you’ll want to check out this episode of Crushing Club Marketing. Our guest, Amy Lynch, CEO of Generational Edge, is a generational expert and breaks down all you need to know about marketing to different generations.
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Adapting to a changing industry is difficult no matter the business, and the private club industry is going through that today.
The Country Club in Brookline, Massachusetts, is one of the most historic country clubs in the industry, yet they’ve been able to stay on top of the latest marketing and communications trends.
This club may ring a bell to some of our listeners who tuned into an earlier Crushing Club Marketing episode with guest Jackie Singleton, the director of communications and technology at The Country Club.
In this week's episode, we take a look at how The Country Club has created a strong culture that begins with exceptional leadership. Assistant General Manager Kristen LaCount shares how clear vision and strong leadership have propelled the Country Club on a steady path of embracing and implementing change.
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What if finding your ideal golf club was like online dating? You get matched with the club that’s right for you based on location, commonalities, and shared interests. It’s a concept the online service Golf Life Navigators is based on, and the site has revolutionized the way members are conducting their search.
In this episode of Crushing Club Marketing, we talk with Golf Life Navigators Co-Founder and CEO Jason Becker, who shares valuable insight from the service's matching process and how it can help club marketers position themselves to potential members.
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The sales cycle in the private club industry can be a long one. It might even take years from the time a prospective member expresses interest to the time they finally become a member. Because of this, it can be a challenge for club marketers to manage, organize, and engage with contacts — all of which are crucial if you want to increase and maintain membership.
In today’s Crushing Club Marketing episode, we chat with John-Erik Pszenny, a customer relationship management (CRM) expert at HubSpot. He explains how marketers can use CRM tools to save and store both important relationship information and transcripts from conversations you’re having with everyone, from prospect to member.
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