Category: Helping Clubs Succeed

This article was created as a resource for club promoters who are trying to enlist the assistance of their members in the task of attracting new members. All of the articles in this series offer suggestions to club members regarding how they can help to attract new members. Club promoters are encouraged to link to it if they wish to provide suggestions to their members.

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Why Beginners Matter

Racquet Network has been in business for a long time. We offered our first lessons in 2004. We opened our first store in 2010. During the years since we first opened our doors our coaching team has taught more than 10,000 adults and children to play racquet sports. We have also registered more than 50,000 sales transactions with players at all levels.

As you can imagine, this many people and this many transactions across this many racquet sports leave behind a large amount of data to aggregate. And from this aggregate data, we can draw some interesting conclusions that are beneficial to every type of racquet sports club.

Here is a concrete example of how that data can be used. There are two squash clubs in our part of the city. Both have about the same number of players, both cater to adult males. Club A is closer to us than Club B, so you would expect that Club A would generate more sales for us than Club B. In fact, however, Club B generates more spinoff business for our store than Club A for one simple reason.

Club B is marginally better than Club A at attracting new players. And by that we don’t mean members who are new to Club B; we mean players who are new to playing the game of squash. Or in other words, Club B is better than Club A at attracting and retaining beginners.

Club A is caught in what we call a cycle of high performance failure. They have turned their club over to a volunteer who spends all of his time trying to attract better players from other clubs. He is focussed almost entirely on Club A’s interclub team performance. Therefore, whether he knows it or not, under his leadership, Club A is pursuing a high performance agenda — an agenda that will ultimately fail the club’s shareholders.

Club B, on the other hand, is more open both to new members and new players. They have more to offer than just an opportunity to play on a winning interclub team. They actually have programs and activities that are attractive to beginners who may be two or three years away from having enough confidence to join an interclub squash team.

Why does this matter? Take a look at the graph at the start of this post. It is an approximation based on aggregate internal data gathered from years of tracking customer purchasing at Racquet Network.

Each bar represents one year of expenditures for players who are new to the sport. You can see that new players spend as much in their first two years as they do in their next three years combined. In fact, most players spend more in their second year of involvement with a new racquet sport than they do in any other year.

Now think about a club filled with 100 players in Year 5 and beyond (Y5+). If you look at what these players are likely to spend on their sport, you will see that 100 of these guys will spend as much as 20 players in their second year (Y2). So a club with 50 Y5+ members and 50 Y1/Y2 members is in a much stronger position financially than a club with 100 Y5+ members.

Think back to glory days for squash in the 80s and 90s. In those days, clubs could make some money. And in those days, the clubs were full of beginners. As the sport of pickleball is demonstrating across Canada today, clubs that are full of Y1s and Y2s are way better off than clubs full of Y5+ players.

So when we say that Club A is caught in a cycle of failure, it should be clear now what we mean. Success in the club’s interclub standings is coming at the expense of Club A’s bottom line. Fortunately for us, we are not shareholders in Club A. So, unlike the actual shareholders, we can be somewhat clinical about their prospects.

However, we would prefer to see Club A succeed and stay open. Given their proximity to our business, it would be nice to see them regain their footing and move away from a high performance agenda toward a high participation agenda. In fact, we think it would be nice to see every club in Canada now pursuing a high performance agenda move to back to a high participation agenda because that would be good for the clubs and for every retailer and manufacturer who serves these clubs.

Every racquet sports club in the world can be arranged on a business spectrum. On the right side of the spectrum are clubs that are businesslike. The more businesslike the club, the further right on the spectrum they fall. On the left side of the spectrum are, for lack of a better word, unbusinesslike clubs. The more unbusinesslike they are the further to the left on the spectrum they fall.

Clubs on the right side of spectrum are business-like in their approach. Their facility is managed so as to turn a profit and generate a return for the club’s owners. Clubs on the left side of the spectrum are just the opposite. Their approach is not businesslike in the least. On the far left side of the spectrum, generating a return on investment for the owners is not even a consideration.

Most clubs fall somewhere in the middle. The vast majority of non-profit clubs skew heavily to the left side of the spectrum as do the most of the privately owned clubs. Only a tiny sliver of privately owned clubs, in my experience, actually fall on the right side of the spectrum and almost none are found on the far right.

Non-profit clubs generally don’t have to turn a profit. In most cases, they are part of a larger non-profit facility that can go to one level of government or another for more money when they need it. If you examine their income statements, you will see that without government subsidies they operate at a loss every year. If you look at their personnel files, you will see that nobody is accountable for these losses and nobody ever loses their job when income fails to exceed expenses. As long as the members are happy, managers in these facilities tend to keep their jobs.

One would expect for-profit clubs to be the opposite. Since they are businesses, one would expect that losing money would lead to immediate consequences for management. However, this is not always the case. Many racquet sports clubs are divisions within larger businesses and are not expected to be profitable. Some health clubs with squash courts in downtown Calgary, for example, are provided as a service to tenants. These clubs are not expected to turn a profit. Their job is to stay open and minimize losses in order to support higher rents in the office towers above.

If you look at the income statements for these clubs, you will see something very similar to the income statements of the non-profit clubs. They lose money every year but they continue to operate because somebody — in this case the landlord — makes up the shortfall. And again, as with non-profit clubs, nobody loses their job when a loss is incurred because the people in control do not expect the facility to turn a profit. While these clubs are generally considered to be for-profit clubs, they really fall into an in between category I call not-for-profit and they tend to fall in the middle of the spectrum.

Pure for-profit business models in racquet sports are exceedingly rare. Rarely do you find a club that is run with the specific goal of turning a profit for shareholders. Most of the clubs in this group come into being when a racquet sport is peaking, when there are more players than the non-profit and not-for-profit facilities can serve. Think of tennis in the 70s, squash in the 80s, racquetball in the 90s or pickleball right now. At their peaks, each of these sports was able to support genuine for-profit racquet sports facilities. Outside of the boom years, they were not.

Outside of these peaks, there just aren’t enough customers to support clubs that need to turn a profit. As a result, owners with money to invest tend to take their money elsewhere. And who can blame them? If you need/want to make a return on your investment, it makes no sense to compete for customers against non-profits and not-for-profits who will always be able to operate at a loss and therefore will always be able to charge lower prices or offer higher levels of service than for-profits.

From time to time, a group of players from the non-profit and/or not-for-profit world will get together and try to open a new for-profit facility. Usually, this group of men (and they are almost exclusively men) will find an investor (often a landlord) and generate a great deal of excitement as they work toward the goal of opening a new facility. More than half of the time, this group will fall short of their goal immediately after the would-be investor does his due diligence and realizes that there aren’t enough players in the non- and not-for- communities willing to pay enough to make his proposed new facility profitable.

Sometimes, though, the investor fails to understand this or fails to believe the numbers and the new facility opens anyways. In most cases, these facilities limp along for a few short years before failure. In a few, they limp along for a few more years as somebody pours money into them. But eventually, the vast majority close forever and somebody learns an expensive lesson about the business of racquet sports.

What is this lesson? It is this … When every competitor in your category falls to the left of you on the businesslike spectrum and when those business are not required to be profitable, invest your money elsewhere. No matter what you do, you will not be able to overcome their competitive advantage. Therefore you will not be able to make a profit that justifies the risk of the investment, which is precisely why more racquet sports facilities are closing than are opening.

Racquet Network is approached by more than 200 racquet sports organization every year asking us to support them with fundraising in a variety of ways. While we would like to help everybody, we can’t. Our family-owned business would quickly be bankrupt.

There are also legal and ethical issues to consider of which most non-profit board members (particularly pickleball club members) are generally unaware — issues which could result in the loss of a club’s non-profit status or create legal problems for individual board members.

What we have done instead is create a fundraising rewards program that is legal, ethical and fair to everyone involved. One that is based upon mutual relationships with our friends in all clubs, for-profit and non-profit alike. Simply put, if a club’s members are encouraged to purchase online from us instead of Amazon or Tennis Warehouse, we will give part of the purchase price back to their affiliated club. The club can then spend their credits on whatever they need — prizes for tournaments, balls, shuttles, court equipment and so on.

Why online and not in-store? Our store staff are simply too busy to be keeping track of who belongs to which club and how much they purchase. Plus, they are trained in customer service, not accounting. By restricting this program to online purchases, we ensure that everything is clearly in writing and that there are fewer chances for confusion.

By keeping things clear and simple we are able to offer ongoing yearly sponsorship benefits to many clubs that count on our support. We are also able to increase the percentage going back to loyal clubs who are with us for long periods of time. In fact, clubs that have been affiliated with us for ten years or more can see sponsorship credits of up to 20% on some items.

How Do We Register?

Registration for this program is easy. Just make a purchase online through racquetnetwork.com and check to see if your club is already on the list. If they are not, just add their name to the form asking us to add them. Within five days, we will do exactly that. From that point forward we will start awarding sponsorship credits for online purchases.

How Much Can We Earn?

Sponsorship credits are based on a percentage of the total value of online purchases made by club members. These sales are clearly documented on the checkout page during every online purchase and are automatically booked by the staff who process the orders.

Sponsorship credits accumulate over time and can be used once per year for any purpose. There are no limits on the amounts that can be earned. The longer a club is affiliated with us, the higher the percentage goes. Clubs who have been affiliated with us for 10 years can earn credits of as much as 20% per transaction.

How Can We Earn More?

This program has no strings attached. We do not request or require that clubs promote this program or our business in any particular way. We understand that every club has a unique political environment and we have no wish to insert ourselves into club business. However, we can advise clubs that they will earn more credits if their members are aware of the sponsorship program. Of course, not all club members will change their purchasing habits to benefit their club, but most will.

Adding a link from your club’s website to ours is obviously important, but it is best if this is done from a page on the website that explains the program and lists some of the things that have been (or will be) purchased on the club’s behalf. Reminding members from time to time is also important, especially during the season and around the winter holidays.

Clubs in Calgary can also benefit enormously from encouraging their players to order CUSTOM or DISCOUNT STRINGING online. In fact, based on the results in this program so far, we can advise Calgary clubs that stringing services will probably make up the bulk of their total sponsorship benefit.

Can We Get a Discount?

One of the reasons that we designed this program in this way was to get around some of the problems created by clubs (particularly pickleball clubs) who ask us to give discounts to their members. Under Canadian law, board members of non-profit clubs cannot benefit in anyway from serving on the board. Therefore, by offering some club members discounts, we are putting the non-profit status of their clubs at risk.

Clearly we don’t want to do that. We value our non-profit friends and don’t want to do anything to compromise them ethically or legally. We also don’t want to create a situation where some club members get discounts while others — particularly board members — can’t legally do so.

This program sidesteps that entire legal/ethical quagmire by ensuring that all benefits accrue to the registered charities, not to their individual members. In doing so we make it fair for every club member and put the emphasis on helping the non-profit entity over helping individuals who may not need, or in some cases, cannot legally accept such benefits.

Other common questions

Q: Will you come to a board meeting and explain this program to us?

A: Sorry, but no. Answers to all questions are on this website.

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Q: Will you please call me to discuss some questions I have about this program?

A: Sorry, but no. Answers to all questions are on this website.

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Q: Can we do this but with some specific alterations just for our club?

A: Sorry, but no. This program is universal.

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Q: Can we discuss some other ideas our board has come up with for fundraising?

A: Sorry, but no. This program is the only program we are offering. We make adjustments to this program from time to time, but we are not interested in any other fundraising programs.

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Q: Can we do this and also get a discount?

A: You’re kidding … right?

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Q: What are the minimums?

A: Clubs that are not generating $3000 per year in sales clearly don’t have enough support from their members and are dropped from the program. This is a very, very low threshold — just 10 to 12 members purchasing new racquets and/or shoes per year. Clubs that generate this minimum level ($3000) are eligible for a sponsorship credit of $300 to $600 depending on how many consecutive years they have been in the program. New clubs in their first year are eligible for a maximum credit of 10%. It increases by 1% for every consecutive year of involvement to a maximum of 20%. So the absolute minimum dollar benefit is $300.00. There is no maximum dollar benefit.

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Q: Do we get sponsorship credits on the balls and court equipment purchased by our club?

A: In most cases, yes. But some court equipment is offered at deeply discounted prices. On those things and on clearance items, we do not offer sponsorship credits.

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Q: Do we get sponsorships credits on shipping?

A: Not from us, but you are welcome to ask Canada Post. We do not mark shipping up. We charge customers whatever Canada Post charges us. We do not use shipping or taxes to calculate sponsorship benefits.

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Q: How often can we use our credits?

A: Once per calendar year?

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Q: How often can we ask how many credits we have accumulated?

A: See question above.

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Q: Can we get a detailed accounting of who purchased what and how much they spent?

A: Sorry, but no. Canadian law requires us to keep that information private.

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If we hear them enough, new questions are added to this page. Please take the time to read all of the documentation about this program on this website before calling and asking questions. Retail store staff, coaches and managers generally aren’t aware of the details of this program and will refer you back to this website for answers to your questions.

Also keep in mind that it does not matter what somebody might say to you or what you think you might have heard somebody say. The only thing that counts is what has been put down in writing. So please take all of the time you need to read and digest the information provided to you here.

This article was created as a resource for club promoters who are trying to enlist the assistance of their members in the task of attracting new members. All of the articles in this series offer suggestions to club members regarding how they can help to attract new members. Club promoters are encouraged to link to it if they wish to provide suggestions to their members.

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Help Your Club – Show Your Pride

You just moved to town. You don’t know a soul. You want to play tennis, squash or badminton, but you don’t know where to start. So you turn to Google for guidance.

You find three clubs that are conveniently close to either home or work and all three appear to be roughly equivalent. So, like most people, you start checking out their reviews. You check Facebook and Google+.

Two of the clubs have a few five star reviews supported by a single sentence or less. One of the clubs has over 50 reviews on Google and more than a hundred on Facebook.

The reviews are not all great. In fact, a small number of them are downright nasty. But taken all together, you end up reading a couple of hundred sentences that give you a clear fairly sense of what is happening inside of that club. You can see that there are lots of enthusiastic members who think the place is wonderful and a few negative Nellies.

Which club will you consider first? The one that offers you a clear view inside their walls or the two who who appear to have tepid support at best?

It is not unusual for the members of non-profit clubs to ask their members to post online reviews. In fact, there are a few who require members to update their reviews annually as a condition of membership.

While it would be unfair to try to dictate the content of those reviews, it is completely reasonable for clubs to ask members to talk about their experiences online so that prospective members can get a glimpse inside.

Facebook Reviews

For members who are already subscribed to Facebook, posting a review to their club’s Facebook page is super simple. It only takes a few minutes but it provides years of value to the club and is essential to attracting new members.

The most useful reviews indicate the approximate level of the player and mention some of the things that they enjoy doing at the club. For added credibility, it is helpful for reviewers to mention something that could be improved along with an acknowledgment from management that the concern is being addressed.

Google+ Reviews

Facebook reviews are nice and they are generally easier to get than Google+ reviews, but Google+ reviews are essential when a club is trying to grow. The club’s star rating is one of the very first things that Googlers see when they start searching for clubs. Google reviews are so essential that some clubs quietly offer free court time coupons to members who have posted or updated their Google reviews in the past 12 months.

Anybody with a Gmail account can submit a Google review almost instantly, because they already have a Google account. Members without Google accounts will need to set one up. This takes time, which is why clubs will sometimes offer an hour of court time as an incentive to get this done.

Once again, player reviews on Google are most useful when the player indicates their level along with some examples of what they do or what they enjoy most. And as always, it is helpful for reviewers to mention something that they are not entirely happy with provided there is an appropriate response from management.

Paying for Reviews

Of course, clubs must be careful here. Both Facebook and Google prohibit clubs from paying for reviews. So it is not a good idea to make such an offer in writing. But there are no rules to prevent club managers from showing their appreciation for positive online reviews. And word about such shows of appreciation tends to circulate rather quickly amongst the members.