Planning and Pitching Your Private Club Marketing Budget

This blog was updated for relevance and accuracy on October 15, 2024.

Like most businesses, private clubs tend to underspend on marketing. Your club has a logo, website, and marketing materials, but successful club marketing doesn't end there. According to Club Benchmarking, the median membership and marketing expense was only 1% of revenue and included all payroll, taxes, and benefits! The right marketing budget for clubs is several percentage points north of current spending levels.

The average attrition rate for private clubs varies, but it typically ranges from 7% to 12% annually. This means that a significant portion of your membership will turn over year-to-year. In today's competitive landscape, it's crucial to have a robust plan to attract new members consistently, one that goes beyond traditional "word-of-mouth" marketing.

If you are a club that doesn't have a sales and marketing budget, go ask for one! Your marketing budget is a map to ensure you reach your club's membership goals. As a quick rule of thumb, check your club's spending by this statistic: Non-profit organizations spend approximately 5-15% of their projected gross revenues in marketing and communications. The planning required to develop a private club marketing budget will help define and align your club's goals and provide a strong case for allocating dollars to marketing.

What is the cost of inaction?

In today's digital age, failing to invest in marketing can lead to decreased visibility, reduced member engagement, and a decline in new memberships. The cost of inaction can be significant, potentially resulting in lost revenue, reduced relevance in your community, and a weakened competitive position.

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. You can harvest the following data if you have a CRM or marketing automation software. If you don’t have the right technology, you'll have to gather the data manually, making generating any ROI reporting impossible.

• How many referrals do you get from members each month? How many other leads do you get monthly (for example, from online inquiries)? These are known collectively as "leads."

• How many of the monthly referrals and leads are qualified? For private clubs, a lead is typically considered qualified if they can afford a membership and have or can find a member sponsor. This is known as a "qualified lead."

• How many qualified people are interested in joining this season? These are known as "opportunities."

• How many opportunities do you have to become a member? In private clubs, most opportunities become members. This is known as your "closing ratio."

Understanding these metrics is crucial for optimizing your marketing efforts. By analyzing your membership funnel, you can identify bottlenecks and allocate resources more effectively to improve conversion rates at each stage.

2. Establish Your Marketing Goals

Now, it's time to build the foundation of your marketing plan with precise 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 initiation fees?

• How many members within each category do you need to achieve your goals?

• What other revenue streams can you influence with your marketing? (i.e., wedding and event sales)

Once 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 Time-bound. Here are some updated examples of SMART goals for private clubs:

• Implement a targeted social media campaign to increase qualified leads by 30% within the next six months.

• Enhance the club's website user experience to improve online conversions by 20% by the end of the year.

• Develop a member referral program that generates 15 new qualified leads per quarter.

3. Know Your Costs

To understand costs, you need to create a plan. Budgeting and planning are iterative processes. You will add details and make adjustments based on the research you do and the feedback you get.

Identify Initiatives

List 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, how many club tours do you need? How many member referrals do you typically rely on? How many website visitors does it take to fill your pipeline? How many leads can you predictably generate with Facebook ads?

At this point, you don't need the nitty-gritty of your marketing plan, but you should have some ideas about how you'll 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 yearly based on your goals, initiatives, and past results.

1. Digital Marketing: This includes paid social media advertising, search engine marketing (SEM), and display advertising. While clubs with a 501c7 status need to be mindful of how they promote using paid strategies, well-crafted digital campaigns can be highly effective and measurable.

2. Website and SEO: Website design/development, updates, maintenance, integrations, improvements, hosting, photos, and videos. Also include search engine optimization (SEO) efforts to improve organic visibility. (On a side note, if you host your website using HubSpot’s content management system, you will not incur any maintenance or hosting fees.)

3. Content Marketing: Develop a content strategy that showcases your club's unique offerings, lifestyle, and community. This can include blog posts, videos, and member spotlights, which can support your email marketing and newsletter creation.

4. Public Relations and Community Engagement: Costs associated with professional organization memberships, local associations, or attendance/sponsorship of community events. 5. Events and Experiential Marketing: Budget for open houses, member-guest events, or "member-for-a-day" experiences that allow prospective members to engage with your club.

5. Personnel and Training: Marketing staff salaries, benefits, and ongoing education. Consider investing in digital marketing training to keep your team up-to-date with the latest trends and technologies. Don’t forget to include any annual conferences you would like to attend!

6. Marketing Technology: Without a CRM or marketing automation tools, it’s almost impossible to consistently stay top-of-mind with all your prospects and track and optimize your marketing efforts. The investment in this technology will pay for itself in no time!

If you need help figuring out where to start planning your club's marketing budget, perhaps our Private Club Marketing Budget Template can help you build one. It includes a budget summary and monthly tracker for paid promos, branding, creative, website, content, PR, events, and personnel costs!

4. Implement, Measure, Modify

Developing a plan and budget to support your club's goals is just the beginning. For it to succeed, you need experts in marketing and design–some of whom may already be part of your team, while others may have to be hired externally. It is important to have the right technology in place so that you can measure outcomes and know what tactics need to be adjusted. It all comes down to monitoring progress regularly and being ready to modify your strategy as necessary if results don't meet expectations.

Investing in the right tools, technology, and resources when it comes to private club marketing can be invaluable. A strategic marketing spend and willingness to embrace forward-thinking ideas are essential to succeed in today's competitive market. Remember, a well-executed marketing strategy is not just about attracting new members – it's about creating a vibrant, engaged community that retains existing members and enhances the overall club experience.