Marketing 101: For Small and Micro Clubs

5 January 2017

You're sitting in your club wondering, "How am I going to get more people to come to my club, more often?" Then you think, "Gee, I wish I had the advertising budget that the big city clubs have." But you don't. So how can you effectively communicate to your target market with little or no money?

Let's look at what marketing is first.  Harvard Business School marketing guru, the late Professor Theodore Levitt, described marketing as follows:  "The difference between selling and marketing is more than semantic.  A truly marketing-minded firm tries to create value-satisfying goods and services, which the consumer will want to buy.  What it offers for sale is determined not by the seller but by the buyer.  The seller takes his cues from the buyer and the product becomes the consequence of the marketing effort, not vice versa.  Selling concerns itself with the tricks and techniques of getting the customers to exchange their cash for the company's products; it does not bother about the value satisfaction that the exchange is all about.  On the contrary, marketing views the entire business as consisting of tightly integrated effort to discover, create, arouse and satisfy customer needs."

The marketing mix is traditionally comprised of four key variables - product, price, place, promotion.  Some latter-day researches and practitioners have added an extra three Ps - people, process and physical environment, so let's have a quick look at those in the club context.

  • Product - the products and services you provide in your club - food, drinks, entertainment (including gaming and musical options), sports (in some clubs), relaxation and enjoyment.
  • Price - what do you charge for your products and services?  Are you price makers or price takers?  Do you decide your price on a cost basis, a profit basis or do you match prices to stay competitive?
  • Promotion - this is the bit most people consider to be marketing but it is really a sub-section of marketing that includes advertising, public relations, customer service and promotions (campaigns with the specific aim of moving product or engaging more members in your services).
  • Place - this usually refers to the distribution channels used to sell products, but for us it is all about the club.  How functional and attractive is your club?  What message is it sending to your members and community - vibrant and growing or flat and dying?

First Steps

The first thing to do is ask your customers what they want.  Use a simple survey form that you draft and print yourself.  You don't need to engage an horrendously expensive marketing research company to do the research when you can use your staff and some initiative.  Ask about food, drinks, physical facilities (your products), entertainment and gaming (your services).

Remember that you membership is mixed, so you may have two or three different segments with different wants and needs to satisfy.  Let's face it, we all know bowlers are interested in bowling greens and a bowling kitchen (to make sandwiches), young mums want a children's play space, a cafe and a good bistro and brasserie, and your gamers want current gaming machines, a loyalty program and probably a valet service for food and drinks.

After you receive enough responses to form a representative sample, you need to match what you currently offer with what your members have asked for.  If you're on the ball, there should be a close match and, if not, it is a fantastic opportunity to grow your business!  Often simple changes to your food and beverage offerings can make the difference, and that might not even entail a change of caterer or chef, just a change of menu.  You might review and refresh your beer, wine and spirits offering by deleting the slow selling lines and adding in a new product or two.  Offer a new product on special (promotion) and, if it proves popular, move it to your permanent product offer.

The same promotion approach can apply to food (especially if you have an in-house chef).  Trial a new dish on the specials board and if it proves popular, transition it to your regular menu.  Look at different price points for your food. Where can you increase margins but still maintain value for money?  Remember, people want different things.  If you have capacity in your kitchen and the demand is there, you could offer fine dining alongside "club grub" (standard schnitzels, burgers, fish and chips etc).

Next, look at your member database and compare it to the demographic statistics of your area (Statistics New Zealand have a wide range of brilliant tools available on their website).  If you have a close match then you are capturing most of your market.  If there are gaps, again this is a golden opportunity to market to people who don't normally come to your club.

Work out who your best customers are by looking at who spends money and then analysing the time, section of the club and dollar value of their spend.  Once you've identified your best customers, try and find more like them.  And remember, if your membership in 1000 and your town population of people over 18 is 3500, you have 2500 more potential members.  Even if every new member only spends $10 per week in the club, that is $520 extra revenue per new member each year.  Or an extra $52,000 to the top line for every 100 additional members.

Gaps in the Market

Identify gaps in the local market and see if the club can fill them easily and cost effectively.  This is especially relevant in regional areas where services have been withdrawn and businesses closed down.

Many clubs have identified gaps in their local market - no fish and chip shop, no service station, no childcare facility, no swimming pool.  Accommodation is another big winner with motels, caravan parks and serviced apartments attracting new clientele to clubs.  Do your research and find out if there is demand for some of these missing products/facilities/services and, if feasible, provide that service through the club.

Do a competitive review.  What businesses are you competing with and do you need to match or challenge their offering/s?  If Club A has a Chinese restaurant, then look at offering something different in your club - Italian, French, Mexican or anything different and tasty.  Look beyond other clubs to see what other businesses are doing in the hospitality sector.

And remember, it is what your customers' want, not what you want! The aim is to find things you can do at little or no cost, that meet your customers' requirements, and will increase your turnover.

How to Promote your Club

Here are some simple tips to get you thinking creatively, most of which cost virtually nothing but can reap great benefits if well executed:

  • Put a brochure about the club, especially it's food offering, in the local motels(s).
  • Offer a discount for out-of-towners with a meal voucher at motels.
  • Give two-for-one meal deal vouchers to your local real estate agents to hand out to every new renter or home owner in the area (makes the real estate agent look good, makes you look good and saves the exhausted people cooking a meal when they move in).
  • Do the odd letterbox drop announcing events, entertainment or even regular promotions for food and raffles.  Pay your own staff to deliver them to letterboxes.
  • Put an ad in your local newspaper.  Monitor the response by including a cut-out voucher to present for a special deal.  You don't have to do it every week - even once a month will give people the impression you advertise all the time.
  • Send an email newsletter to members and promote events and offers on your screens and noticeboards.
  • Engage with the local service groups such as Rotary, Lions, Chamber of Commerce, and offer them a good deal on the use of your facilities, especially meeting rooms with catering.
  • Social media is a must these days to communicate with your future customers - Gen Y and millenials - so ensure you have a Facebook page, Instagram, Twitter and even Snapchat.
  • A membership drive is a great way to boost revenue at little or no cost.  Give away double the value of your membership fee in free offers, e.g. $10 worth of drinks if your membership fee is $5.

As promotions begin to show results and cash reserves start to look healthy, you can look at the final P - your place.  There is no doubt a coat of paint and new carpet can dramatically lift the look and feel of your club, but the payback is often not immediate.  A working bee of members to repaint the club is a low cost option while you save big-ticket items for when you've built adequate reserves.

Doing Small Things Can Lead to Big Things

Every big club in our industry started off as small and through smart business tactics, good governance, sound strategic planning, good financial management and having a go, have built themselves into vibrant, relevant community centres that deliver for their members.  But it all starts with Marketing 101 - find out what your members want, give it to them, and they'll beat a path to your door.

(SOURCE: Ron Browne, ClubsNSW Manager - Professional Development, ClubLIFE December 2016)

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