Show Me the Data: A Club Benchmarking Podcast

Most members know their dues to the dollar. Almost none can say what their club is worth. Club Benchmarking’s data suggests that blind spot is costing a lot of clubs.

Club Benchmarking founder Ray Cronin and CEO Dr. Jim Butler break down members’ equity, also called net worth or book value, and why they consider it the most important number in the business. They explain why the old refundable-equity model has largely disappeared. They also explain why a large share of clubs are worth less today, adjusted for inflation, than they were twenty years ago, even through one of the strongest stretches in club history. The cause is simple. A club’s operations break even, so its net worth grows only when capital income outpaces depreciation and interest. Along the way, they tackle the board member who runs on keeping dues low, why a club never cuts its way to success, and why “efficient” is not the same as “effective.” They also share the story of a corporate executive who knew the equity of his billion-dollar company by heart and had no idea what his club was worth.

If you’re a member, a prospective member, or a board member, they leave you with two questions to ask: what is our club’s book value, and has it grown over the last 10 or 20 years?

Depending on who you ask, private clubs are either thriving or dying. The data says the clubs doing best today look almost nothing like the one your grandfather joined.

Club Benchmarking founder Ray Cronin and CEO Dr. Jim Butler discuss their new white paper, built on data from more than 1,000 clubs and surveys of over a quarter million members. Ray explains why the clubs that slashed initiation fees after 2009 misread the problem. It was never about price, he says. It was a demographic gap and a positioning problem. Jim shares a focus group story about a stunning island-green golf hole that the men loved and the women wouldn’t join a club to look at. They explore why people now join clubs for lifestyle and belonging, why members and staff who know each other’s names create attachment that lasts decades, and how the “yellow slice” of non-golf amenities became one of the most important discoveries in their research. They also take on the pool debate, with some counterintuitive findings on how broader amenities relate to golf course spending.

If your club is somewhere in the middle, this conversation is worth your time. The question they leave you with is simple: who are you building your club for?

In a member-owned club, the people who vote on the budget are also the people who pay the dues. That’s a built-in conflict of interest, and it shapes how many boards set the number. The common shortcut is to raise dues by consumer price index CPI) and move on. Club Benchmarking’s data says that quietly costs clubs ground every year.

In this episode, Club Benchmarking founder Ray Cronin and CEO Dr. Jim Butler look at what actually drives club costs. Labor makes up well over half of a club’s expenses, so a general inflation index doesn’t capture what clubs pay for. They explain why the median club breaks even on operations year after year, and why spending more on the member experience doesn’t mean a club is wasting money. They also tell the story of a club board that chose to trust its management team on the dues increase, and explain why they believe setting dues is closer to a science than most boards realize.

If you’ve ever sat in a budget meeting where the loudest voice wanted to cut expenses, or been the person who did, this conversation will make you think twice.

Most club boards believe they know what members want. They hear it in the grill room and from the loudest voice in the meeting, and they call it a decision. Club Benchmarking’s Ray Cronin and Dr. Jim Butler say the data tells a different story.

In this episode Ray and Jim talk about what the member experience actually is, why the industry has never defined it, and why so many clubs are guessing. Jim shares what he learned as a general manager, and how his own doctoral research humbled him when golf landed in the middle of the pack of reasons members join. They look at where boardroom assumptions and member data part ways. Food and beverage influences overall satisfaction about twice as much as golf, yet clubs subsidize it far less. Communication outranks both. They also talk about why a score only means something next to the rest of the industry, how one club cut its dining prices by two thirds and watched satisfaction climb, and what it means for a board member to act as a true fiduciary.

If you’ve ever sat through a board debate where opinions carried more weight than evidence, this one’s for you.