From Survival To Success. Why Your Club’s Net Worth Is The Ultimate KPI

Ray Cronin of Club Benchmarking has long emphasized an essential truth: Private clubs compete based on value, not price. While many boards focus too much on the annual Income Statement, that document is just a "service gauge"—it shows what was consumed today, not what is being built for tomorrow.

Cronin believes the true indicator of a club’s health is Net Worth Over Time (NWOT). This metric measures the growth of the club’s assets and its capacity to reinvest in the member experience.

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THE THREE BUCKETS OF CLUB HEALTH

Based on data from over 2,000 private clubs, Club Benchmarking has identified three distinct categories based on their financial trajectory:

Stagnant (Shrinking)

Membership: Dwindling; weak experience.

Amenities: Narrow and lackluster.

Balance Sheet: Weak and depleted.

Governance: Focused on daily operations.

Mindset: Members act like "Customers."

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Evolving (Sideways)

Membership: Adequate but fragile.

Amenities: Average to above-average.

Balance Sheet: Average/Moderate.

Governance: Split between ops and strategy.

Mindset: Mix of "Customers" and "Owners."

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Dynamic (Growing)

Membership: Full roster; waitlist.

Amenities: Broad, compelling array.

Balance Sheet: Robust and strong.

Governance: Strategic; focused on the future.

Mindset: Members act like "Owners."

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AVOIDING THE "DOWNWARD SPIRAL"

There is a dangerous misconception that clubs can cut their way to prosperity. While making a club operate efficiently is good business, postponing capital investment is the first step toward a disastrous downward spiral. It has five stages:
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1. Under-Investment. Facilities begin to age, and services lag.

2. Decreased Satisfaction.  Members no longer feel the value matches the cost

3. Attrition.  Membership numbers drop, reducing dues revenue.

4. Financial Stress.  The club resorts to emergency assessments or steep dues hikes.

5. The Train Wreck.  More members leave, and the downward spiral repeats.
   
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THE PATH FORWARD - STRATEGIC CAPITAL PLANNING

To avoid this cycle, clubs must embrace dynamic change. Sustainable success is rooted in a forward-looking capital plan—one designed to attract the next generation of members rather than satisfying the personal agendas of a vocal few.
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THE TAKEAWAY

Don’t look for the simple answer of cutting prices. Instead, double down on your value proposition. A strategic capital plan, supported by professional management like Bobby Jones, and a visionary board or owner, is the only way to ensure your club thrives for decades to come.

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