Use estate agents to gain more members

As part of an occassional spotlight on golf clubs in the USA, Stephen Jara argues that private American country clubs should utilise estate agents more when it comes to recruiting members.

The numbers are staggering and the board is constantly asking the question: ?how can the membership at our club continue to decline?? The details are astounding, the figures continue to decrease, the reports are real and private country clubs are declining at rates never expected. Articles in newspapers depict how the private country club industry is currently experiencing declining membership and revenues. Articles are published and advertising from consultants flood the print and internet with their ?pitch? as how to fix the issue at hand. Membership decline and retention is the biggest issue private clubs face in today?s world.

Why has it taken so long to realise that within the compounds of the private country clubs? boundaries an in-house real estate operations department could be so beneficial to the success of a country club?s future?

Real estate sales = new members = initiation fees and cash flow!

The thought of including a real estate brokerage would seem to add additional overhead and additional management to the club and one might ask: ?Is this truly a service our members need??

The answer was no, in fact several clubs do not have real estate associated with them or are not associated with a property owners? association. So why now are private clubs looking at controlling the real estate associated with the club? The answer is simple: to add another avenue in attracting new members!

First impressions are lasting. How many staff meetings begin with how important that first greeting to members and guests are? The Ritz Carlton Hotel & Club has made the greeting its number one step-in service. ?A warm and sincere greeting, use the guest?s name? and their second level of service is ?anticipation and fulfillment of each guest?s needs?.

The club?s front line of first impression is often the security guard who greets the guest or the valet who opens the vehicle door and warmly greets the member or guest. Now think about the realtor who meets a prospective homebuyer and club member at the local coffee shop and rattles through several listing sheets of available properties within the gate. Staggering when you think about it! This might be that first impression to a prospective club member, and the club has no control of what story is being painted to that client. Is that realtor showing multiple club communities and what information are they sharing? How many potential members are passing on your club without even getting to experience the story you and your staff has been versed to tell? It is paramount to recognise that not every realtor may be familiar with the details of the clubs they target and specialise.

In fact each club may have several members who are also active realtors that feature their club in selling real estate. There are several ways how you and your club can begin to control the club?s story in real estate and increase your membership.

?Quail Ridge is fortunate to have always had ownership of its onsite real estate office.?In a challenging market, it is now more important than ever to ensure your club and community is being promoted effectively, maintaining brand, logo and message consistency. An established real estate office also provides a welcome revenue centre, helping to absorb marketing costs and providing additional revenue back into the community to offset fees.?A member-owned real estate office is ideal for encouraging new member referrals from existing members, a crucial component in attracting new members to a club.? Quote from Donald ?Chip? Misch, CCM, general manager & COO Quail Ridge CC in Boynton Beach, Florida.

Now what? Well, there are several avenues to consider should you wish to investigate looking into some sort of real estate operations. Every club has its own personality and is regulated by their by-laws.

OPTION 1

An in-house real estate department with a broker who is an employee of the club is an option. This option will require the most amount of work and financial obligation but rewards the club with a true internal consistent message and financial reward. Recruiting a broker and support staff as well as creating the office and its necessary tools from scratch is time consuming and costly.? However, the reward is the profits available from a successful real estate operation.

OPTION 2

Creating a relationship with a local and existing real estate brokerage is another option. This option is significantly less work and cash outlay. Hiring and working with a brokerage that is willing to understand the needs of the club will be challenging, however this option can be obtained.

OPTION 3

Develop a programme with a department head, possibly the membership director, to create a relationship with the agents who list and sell in your club.? Provide marketing materials and current updates so they can best tell your club?s story. This programme is not as easy as it may seem as there will need to be standard operating procedures in place and a consistent plan of action which needs to be delivered throughout the year.

No matter which option you choose, consider this; if a new programme did not produce any additional income but the club increased five new members in addition to the normal membership campaign, what would this mean for your club? Analysing the needs for your club and hiring a competent consulting firm that understands the melding of club operations and real estate will be most helpful and efficient as the club recognises the importance of this paradigm shift.

?Private clubs appear to be reluctant to pay real estate agents a finder?s fee for referring a prospective member that subsequently joins. I find this interesting, as clubs around the country have fully embraced the notion of paying current members a finder?s fee for the same activity.? From a tax perspective, paying a finder?s fee of any type generates an income tax reporting requirement. My suggestion has always been that it is a member?s duty to refer and sponsor prospective members so why make a payment to them? Then, I hear a large cry about club boards that balk at paying a professional (real estate agent) for a valuable service? Clubs must figure out the value of one new member and if it takes paying a commission to a real estate agent, is this just another cost of doing business?? Said Mitchell L. Stump, CPA, author of Club Tax Book.

A fresh review of your club?s marketing campaign and public relations programme is necessary and may need updating. Designing a new avenue introducing the club?s involvement with its in-house real estate division is important. Current members must see the importance and embrace the club?s decision to include real estate as part of the club. Utilising today?s newest and innovative ideas in marketing is a necessity to the success of this new programme and the club. The new broker / director must be knowledgeable in real estate operations and well as being known as an ambassador of the club.? Telling the club?s story in a consistent manner will ensure the success of the club?s real estate and overall operation. Including the members through the club?s participation with its new real estate programme through social media and other innovative ways will allow them to feel a sense of ownership and success.

There will be obstacles and challenges throughout this process. There will be opposition from members who are realtors selling property in and around the club. There will be challenges throughout the club regarding the tax status and how and where the entity should be placed. These oppositions are valid and need to be handled with ?kid gloves?. Utilising a third party consulting group will allow the real estate committee to agree with the recommendations of the consulting group as who should be part of the new programme based on success and sales and listing reports within the club. This takes the pressure off of the management for excluding the part-time realtor / member in the new programme. ?This is a business decision and not to be taken as a personal affront. Results, not personalities, is what?s at stake and it is now time to take politics out of the success of the club.

In no way am I suggesting a ?stimulus package? for your club or inferring that adding a new department and additional work will increase revenue and profit!? What you now have on your desk is an option, a viable option and avenue to increase membership and cash flow for your club through one of the oldest professions.

Stephen Jara is a former country club manager and current realtor in the USA

This article was published on Sunday, April 8th, 2012 at 12:46 pm You can skip to the end and leave a response.

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