Private or Public, all golf courses and clubs have a potential niche in the marketplace. Market positioning is key to the success of any club. Recently, on an assignment in the Midwest US, we encountered an interesting market positioning situation. The market Metropolitan Statistical Area (MSA) has an estimated population between 300,000 and 400,000. Golf participation (like much of the Midwest) is higher than the national average, and in this market median home prices (just over $200,000) and median household income (less than $60,000) are lower than national averages. The area has lost many middle and upper management jobs in recent years as some of its biggest employers have been absorbed in corporate mergers and buyouts. There are two (2) options in the market for private golf. Both are owned by private investors, one recently acquired from the membership.
Likely at least partly due to the surge in golf interest spurred by the COVID pandemic, both clubs report full membership and high levels of activity. One recently increased its entrance fee and established a waiting list. The other now has a waiting list for membership but has maintained a nominal entrance fee. Both are very desirable facilities that have been well-maintained and are in good condition. While competitive with each other, these two clubs have vastly different cultures and seek different segments of the golf market. One is a full-service, family country club focusing on a variety of activities including not only golf, but swimming, racquet sports, dining, events and social programs. The other is a golf-only club with much smaller (but upscale) food & beverage service and places primary emphasis on the golf facilities, conditions and the golf experience. They have limited membership to ensure easy access by the members and uncrowded conditions enhancing the pace of play.
Economically, both clubs share the problem of being situated in a market with limited spending power and high price sensitivity. Despite being at maximum membership the market’s price sensitivity hinders each club’s ability to generate revenues, meaning these clubs need to effectively manage costs and expenses to maintain palatable pricing. Each has positioned themselves in a way that limits directly competing with each other by catering to separate clientele. The full-service country club targets the social and business segments while the golf club focuses on avid and frequent golfers.
I raise this issue because I’ve seen several clubs fail (including one I belonged to for a long time) in competitive markets because they all chased the same market segment. A club can’t be all things to all potential members. Avid golfers seek prime playing conditions and unhindered access to the course. Practice facilities are often important to this group because the primary reason they consider joining a club is playing more frequently and improving their game. Those seeking a greater diversity of activities may be willing to compromise on golf in order to accommodate a broader club experience. The two clubs mentioned above have made distinct decisions about whom to target and have done so successfully.
Each and every club has a “culture”. As I write in “The Culture of Golf – Isn’t it Just a Game” ... "Private clubs are a culture unto themselves. Each private club has its own unique culture. Sometimes these cultures are intentional and sometimes accidental. Much of this depends on the club’s facilities, goals, level of affluence, exclusivity (perceived or actual) and its politics.
Historically, private clubs have been an oasis of decorum and politeness. Many clubs attempt to create a welcoming and friendly atmosphere. Others seemingly seek to establish rules and policies attempting to develop prestige that are often perceived as “stuffy”. Still others, attempting to elevate their reputations foster an air of superiority while attempting to display (an often insincere) culture of warmth. Anyone who’s visited many private clubs can attest to what I call the “country club wave” where members might acknowledge others with a wave of the hand while not even looking at them. Private clubs can be the most comfortable places and at times the most awkward. At some clubs it seems as though the goal is to make guests as uncomfortable as possible. Each club has its own unique culture."
It’s not at all uncommon for multiple clubs in the same market to position themselves in the same niche only to fail doing so. Fortunately, in the example cited above, the clubs recognized and cultivated their own identities and enjoy full membership. Finding your club’s niche, positioning the club properly for success and committing to being the best at it are key elements of the recipe for success.