Issues Facing Private Clubs


Clubs all over the world are facing challenges due to finances. Though there are some that are comprised of members that are wealthy with a considerable amount of money in their banks, most of them face the challenge and are increasingly squeezed by the existing economic aspects. Private clubs offer several amenities to their members as well as recreational activities like tennis, golf, swimming, social events like parties and dining, and professional services like business conferences and gatherings. Members are in a position to enjoy the activities and facilities offered by their club in company of their business associates, family and friends.

Most members of the society may possibly think only about the services that private clubs offer without taking into consideration the business feature of these associations. For private clubs to be successful in terms of finance, revenues should exceed the expenditures. Membership fees as well as monthly dues are the main basis of revenues for clubs. Thus, when the number of club membership declines, the club`s revenues also reduce. Currently, the club industry has undergone major challenges due to the economic recession as well as alterations in society that are possibly leading to a reduction in the number of members. Moreover, the number of clubs that have been closed, including those that are at present striving to remain relevant, has greatly increased. Private clubs face a number of issues in their day-to-day operations. These issues are identified and discussed below.


Membership retention


The contemporary business model of most private clubs is to establish a core membership that provides the club with a huge amount of cash every year. This is utilized to fund all the activities, pay salaries and maintain the clubhouse; therefore, as the number of club members reduces, clubs suffer a crisis of immense magnitude. In an effort to tackle the problem, private clubs implement a wide range of techniques. These include enabling members of the club to spread their memberships over an extended period, altering dress code, establishing various membership groups etc. Several clubs are not able to alter their business representation. Thus membership retention is crucial for continued existence. One area that shows that the number of private clubs is declining is customer service; consumers anticipate and ought to have great customer service provided by their clubs and it appears that several clubs are not able to provide it.

Level of risk in regard to membership retention

At present, quite a few private clubs can boldly boast about having better membership as compared to what they had a decade ago. This is what most people term as the great recession. The stressed economy has had a greater influence on club membership. For most people, club membership is an optional expense that is put to an end whenever budgets grow tighter. Therefore, both domestic and international private club industry has undergone financial constraints due to the economy. National clubs in general have gone through financial challenges for many years, especially in 2009 when most private clubs closed due to the decline in membership.

During a recession when the average customer’s insight in regard to the economy becomes worse than usual, leisure providers and retailers ought to work harder in order to sustain their customers’ disposable income as they attempt to balance with the intensifying cost of living. Non-crucial expenses like excellent dining as well as club membership are the ones that ought to be forfeited. In this struggle for hearts and minds, the private club sector has primarily utilized enormous discounts and steady offers of savings to attract members to spend. Nevertheless, this tactic is cannot be said to be fine as it has its drawbacks. As members grow to be more used to discounted prices, they also turn out to be conscious that if they are eager to wait, ultimately everything is going to be reduced.

Every customer desires to obtain value for his or her money. Having less money to take part in the club business, they will limit their spending to what they believe will provide them with greater value. Thus, instead of losing a member due to his or her perceived lack of value, it is better to switch-sell or up-sell by modifying a membership to go well with that member’s requirements and boost their supposed value. It is evident that several private clubs are striving to maintain a certain groups of members, especially the young ones.

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Potential solutions to membership retention

Nowadays, when the number of golf courses is declining and private clubs lose a lot of members as golfers take part in fewer rounds, alterations should be undertaken to maintain growth, and the industry should try to develop its product and service provision in order to endure the storm. Marketing budgets should be utilized more creatively during a decline, and Customer Retention and Growth seems to be a better place to invest these fading funds into. The plan is to focus mainly on marketing to key customers.

Those responsible must focus on cultivating customer relationships in an effort to maintain these customers as soon as the recession comes to an end, and in order to do so, the operators are supposed to put into practice specific apparatus that will assist to settle on who their new customers are and to persuade likeminded members to join. New customers must be offered incentives in order to sign up for loyalty programs; thus, a manager should be able to classify who has become a loyalty program member and avail them for a quick analysis.

The two areas that are crucial to successful customer growth and retention include exploring each new member who joins a loyalty program, basing on who they are, what they like, where they come from, as well as indulging new members in an effort to establish strategies for promoting retention when the recession comes to an end. This tactic can be as trouble-free as providing rewards or introducing new product lines in order to keep loyal customers. Club operators are also vested with the responsibility of identifying, through transactional analysis, customers whose expenses are not reducing. This strategy is useful and can be leveraged to establish movements that assist in signing up similar customers of the same type, in an effort to substitute for those who have decided not to prolong their membership.


In conclusion, operators must keep in touch with lapsed customers during this unsteady economic era so that they can eventually be tempted to resume their membership when the economy as well as consumer confidence returns. Most notably, the customers must not be abandoned at the time of financial wavering, and transactional analysis is crucial. In addition, acquiring new members in some instances means stealing them from other state clubs, and it requires more than two incentives to make them switch.

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