7 min read
Planning and Pitching Your Private Club Marketing Budget
By: Kathy Heil on Oct 5, 2018 3:07:39 PM
Like most businesses, private clubs tend to underspend on marketing. Your club has a logo, website, and marketing materials, which is the foundation of your club's branding. But successful club marketing doesn't end there.
Your goal is to continually bring new members in the door and build a strong community to retain current members. So, it's essential to have an ongoing plan for how to get the word out about your club and have a budget to put your plan into action.
The planning required to develop a private club marketing budget will not only help define and align your club's goals, but it will also provide a strong case for allocating dollars to marketing.
Sell Marketing to Your Leadership as an Investment, Not a Cost
More often than not, marketing budgets in clubs are very small. They are usually determined by the board or general manager, with limited input from membership and marketing managers. Thus, the marketing budget is perceived as an expense rather than an integral part of a vibrant club.
According to a 2017 CMO Survey, companies spend an average of 11.4% of total revenue on marketing. But marketing budgets in the club industry fall far short of that. According to Club Benchmarking, the 2017 median membership and marketing expense was only 1% of revenue and included all payroll, taxes, and benefits! The right marketing budget for clubs is probably several percentage points north of current spending levels.
Instead of looking at historic expenditures and making decisions about where to spend more or less, consider marketing as an investment. Given adequate time, talent, and technology, successful marketing will bring a quantifiable return on investment over time.
Looking for a creative way to get buy in for your marketing budget? Learn how Robert Cuillard of Columbine Country Club grew his marketing budget to $400,000 by taking 11% from the initiation fee from each new member to reallocate to marketing.
What is the cost of inaction?
Consider the cost of doing nothing or simply maintaining the status quo. Are you trying to add more members next year? Have you planned and funded the initiatives that will help you reach that goal? If you want different results, you’ll need to do something different.
If you've never prepared a budget before, or you're looking to make a case for a larger budget, here is a four-step approach to developing a marketing budget as part of a marketing plan:
1. Know Your Membership Funnel
Building a marketing budget requires a deep understanding of your membership funnel. If you have a CRM or marketing automation software, you can harvest the following data. If you don’t have a technology tool, you'll have to gather the data manually.
How many referrals do you get from members each month? How many other leads do you get each month (for example, from online inquiries)? These are known collectively as "leads."
Of the monthly referrals and leads, how many are qualified? For private clubs, a lead is typically considered qualified if they can afford a membership and they have or can find a member sponsor. This is known as a "qualified lead."
Of those who are qualified, how many are interested in joining this season? These are known as "opportunities."
How many opportunities actually become members? In private clubs, most opportunities become members. This is known as your "closing ratio."
What’s the average value of that membership?
Not every person who fills out a “contact us” form or who is referred by a member becomes a member. So, knowing the answers to these important questions tells you how many leads you need to attract to reach your desired number of new members each year.
2. Establish Your Marketing Goals
Now, it’s time to build the foundation of your marketing plan with clear numbers. Start by asking these questions:
- Is your membership currently full?
- How much attrition do you expect annually?
- What is the club’s total revenue goal, and how much of that is from new member fees?
- How many of each type of member do you need to achieve your goal?
- What are the goals of other areas that you can influence? For example, event sales.
Because you understand your membership funnel, you know how many leads are required to generate the desired number of new members, so you can begin setting your SMART goals.
What are SMART goals?
Smart goals are Specific, Measurable, Attainable, Relevant, and Timely. Some examples of SMART goals include:
- Launch an inbound marketing strategy, complete with optimized website and lead nurturing, to increase qualified leads by 25% this year.
- Double the number of new member leads from the website by June. (These are known as “online conversions.")
- Institute a conditional membership as part of the sales process to improve the close ratio by 10% this season.
3. Know Your Costs
To understand costs, you need to create a plan. Budgeting and planning is an iterative process. You will add details and make adjustments based on the research you do and the feedback you get.
Begin by listing your top initiatives to find prospective members, nurture existing prospects, and close new members. Include the tactics and metrics you’ll use to define success.
For example, do you think an open house will garner interest in your club? Will a member referral promotion? How about an email nurturing campaign? What if you created compelling content and deployed it on your website and social channels?
At this point, you don’t need the nitty-gritty of your marketing plan, but you should have some ideas of what you’re planning to do to achieve your goals.
What goes into the budget?
The following categories represent the main “buckets” to consider. What you include in the line item budget will change from year to year based on your goals and initiatives. For example, one year you may include a completely new website, while the next year you may plan for just some small enhancements and updates.
Paid Promotion: Search, remarketing ads, banner ads, directory and website listings, social media advertising, lead generation, display, TV, radio, print, direct mail
This is the foundation of outbound marketing or “old school” marketing. Many clubs, especially 501c7 clubs, exclude paid advertising from their marketing mix. However, paid options for promoting content about your club culture is quite different from overt advertising for members. Instead, this approach uses paid placement as a PR play.
For any promotional campaign, be sure to include production costs (design, messaging, testing, etc.), as well as ad placement costs.
Branding & Creative: Software, hardware, equipment, photography and videography, freelancers, printing, supplies
Branding and design are what make your marketing look good. In addition to design and freelance hours, include costs each month for software, hardware, and printing.
Website: Website design/development (or redesign/development), updates, maintenance, integrations, improvements, hosting, photos, and videos
Websites must constantly evolve. Regardless of how new your website is, maintaining it will be at least a minor ongoing expense. Depending on where your club is at in its online evolution, you should include costs to build a new website, redesign the site, or maintain an existing site as well as costs for ongoing optimization.
Content Marketing: Content creation, design, video production, publishing tools, analytics, CMS, marketing automation, and social media tools
Content marketing involves creating and distributing quality content that will really benefit your brand. It takes time, research, and effort by a team of content marketing professionals, and the right tools to distribute and promote it.
This is also the place to include marketing and sales automation tools like a platform for your blog and an automated way to track leads, segment leads, and nurture them through the process.
Public Relations: Professional association membership, dinners, sponsorship, donations
If you belong to professional organizations, or local association, and attend or sponsor meetings and events, you can capture those costs here.
Events: Food & beverage, entertainment, giveaways, event advertising, décor, printing, swag
If you use open houses, meet the members mixers, or member-for-a-day events for prospective members, you should have a separate category to track these costs.
Personnel: Salaries, benefits, training and education, bonuses
This may or may not apply to your marketing budget. Depending on the budget structure of your club, you may include personnel costs in your marketing budget, or you may not. Some clubs use an overall personnel budget for all staff, but others track by department.
4. Implement, Measure, Modify
Once you've developed a plan and budget that support your club’s goals, you need to implement it, monitor results, and make necessary adjustments.
Successful implementation requires marketers, creatives, and technical experts. You likely have some of this expertise in-house, while for other expertise, you will need to hire an agency or freelancers. Spend time with your team and any additional resources you bring in to establish metrics that you can monitor.
Establish a monitoring frequency so you can determine if efforts are providing the desired results. If not, modify the efforts accordingly.
Every club is unique and all have different goals, objectives, and timelines to support their club’s growth.
Clubs, like all businesses, need to invest in tools, technology, and resources. A strategic marketing spend and willingness to embrace forward-thinking ideas are essential to succeed in today’s market. A detailed marketing budget, along with a thoughtful marketing plan, create the necessary foundation for club success.
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