There's a better way to get the information you need...

Apples-and-Oranges

Club general managers and controllers seek information on a regular basis. Frequently, the scenario is a board or committee member asking the manager to reach out to his or her industry peers for information about their dues, member counts, course maintenance expenses, etc. Unfortunately, without context, the numbers being shared don't really mean much. For example, another club's dues number is meaningless without the context of other factors such as number of members, operating expenses, etc. Club Benchmarking uses credible comprehensive data to measure and compare key financial and operational metrics and provide context relative to the club itself and to the industry as a whole.

The Origin
Going back to its roots, “benchmarking” was a term used mostly by land surveyors who relied on one fixed point—a benchmark—to serve as a reference point from which all their other measurements were made. The word made its way into corporate vocabularies in the early 80s when an increasingly competitive global market left companies like Xerox, Ford, AT&T and Motorola desperate for customers and struggling for survival. As an example, Xerox lost 69% of its marketshare between 1974 and 1984 and the company’s profits dropped from $1.15 billion to $260 million between 1980 and 1984. While the numbers are significantly larger, there are obvious parallels between those circumstances and the economic challenges currently being faced by many in the club industry.

As they went to battle to save their companies, those companies were among the first to adopt the word “benchmarking" to describe the practice of systematically studying their own business performance relative to their peers and competition. The goal of benchmarking, then as now, was to gain actionable information in order to improve financial and operational performance. In the club industry, Implementation of formal benchmarking through CB is producing some interesting results.

The Difference
In Best Practices for Benchmarking, business author David Stauffer warns that those who benchmark “must be careful to analyze the best practices of others in light of their own culture and circumstances, or they may find that their efforts do more harm than good.” In the club industry, dues are a classic example of the dangers of data without context.  We know that dues are essentially a two cylinder engine: how many members a club has; how much each member pays. That engine must be balanced with the actual financial needs of the club, so there is no value in understanding only one cylinder and having little understanding of the needs side of the equation. In informal data sharing, questions like ”What are your dues?, Are your dues going up this year? How much did your dues go up last year?” may elicit a response, but the reality is, without additional detail and proper context, the answers to those questions do not provide a sound basis for deciding whether one's own dues level is appropriate.

To be effective, benchmarking must be both a comparative process and an investigative process where anomalies revealed by comparisons are explored and data is analyzed and put into proper context. Simply put, knowing whether your result in a particular area is lower or higher or even the same as another club without understanding why your results differ is not enough. Club Benchmarking gives you the reliable, actionable information you need to make the right decision for your club.

 

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woman paperwork frustrated 300Three Good Reasons to Rethink Data-Sharing in the Club Industry

One of the most remarkable things about club industry professionals is their willingness to share ideas and information. Unlike many other industries, when a fellow club manager is in need of information, camaraderie almost always trumps competition. Networking and conversational exchanges are an important part of that friendly culture, but another very common practice – informal data-sharing in the form of spreadsheet surveys circulated via email and telephone round-robins – is problematic for a number of reasons you may not have considered:

1) Time is Money

Take a minute to think about how much time you and/or your controller have spent over the last 12 months responding to information requests from your local and national industry peers including fellow chapter members. Many club managers have told us that over the course of a typical year they get at least a dozen emails or phone calls with questions like “how much did your dues go up last year?” “What’s the starting age for your senior membership category?” or “How much are you charging for a martini?”

One of the primary drivers behind CMAA’s annual survey effort is to develop a robust centralized database via the Club Benchmarking platform so that any time you or a colleague need information, it’s right there waiting for you. The answers to the three questions above plus hundreds of others are readily available in the CB database.  As a CMAA Chapter member, you can save time by entering your information one time, in one location, as soon as you’ve finished your year-end closing. Then the next time a question comes your way, remind the interested party that they can find what they’re looking for in the Club Benchmarking database and CMAA’s Club Industry Reports.
Club Benchmarking Member List

2) The Right Stuff

The obvious motivation behind informal data-sharing is a desire for information, but if that information is going to be put to use for the benefit of one’s club, it needs to be credible, reliable and actionable. The right data can help you make a critical decision, validate current management performance, or modify a course of action. The problem with informal surveys is that the end product is often not much more than a stack of numbers in an excel spreadsheet. Whether or not those numbers are accurate depends on how comfortable respondents felt participating in such a public exchange of information, and sample groups are often too small and incongruous to produce any conclusive information. Without proper analysis and the additional information necessary to put the findings in context, there is really no way to safely apply or take action on the information at your own club.

CMAA made a decision in 2010 to adopt Club Benchmarking as the platform for the Association’s annual surveys and endorse it as a reliable resource for CMAA members based on CB’s ability to gather, analyze, and interpret comprehensive, actionable industry intelligence.

3) Law and Order

The most overlooked pitfall of informal data-sharing is the lack of anonymity. In addition to the fact that open exchanges may compromise the quality of the information gathered as mentioned above, it is important to note that sharing data in a non-aggregated format where the source is easily identifiable is prohibited by Federal Trade Commission Antitrust regulations. The Club Benchmarking platform and reporting functions are designed to provide complete anonymity for survey participants, and built-in safeguards in the filtering tools ensure that sample group sizes comply with FTC regulations.

As a Chapter member, making strong local and national participation in the CMAA annual surveys a priority is a win-win; for your club, for your Chapter and for the club industry as a whole. 

 

 

 

 

 

 

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