By The Late 1990s Those Employees Were Aging Rapidly And The Core Membership Nee

ees.

By the late 1990s, those employees were aging rapidly and the core membership needed

to be increased. NCRCC offers two golf courses. One is an award winning, championshiphosting

course on the PGA tour. But it wasn’t attracting new members, especially younger

families. This case is about a membership study done as part of a larger management

initiative to evaluate several strategic directions the club might take to expand its membership.

www.ncrcountryclub.com

>Abstract

>The Scenario

NCR Country Club (NCRCC) started in 1954 as an employee benefit of the National

Cash Register Co. but is now an open-membership club. This country club located

in Kettering, Ohio (near Dayton), hosts two 18-hole golf courses. The NCR South

course, a par 71 championship course of 6,824 yards of heavily wooded rolling

countryside, the site of the 1996 PGA Championship, the 1986 U.S. Open, and the

1998 U.S. Mid-Amateur, is consistently ranked by Golf Digest as one of the top

100 courses in the United States. The prairie-links style of the North course, a

6,358-yard par 70 course, is considered challenging. In southwestern Ohio, the

active golf season usually lasts from May through October. Within a 30-minute radius

of NCRCC, the avid golfer will find eight other private golf and country clubs as well

as 29 public golf clubs and courses.

In 1997, after the purchase of NCR Corporation by AT&T, AT&T provided

a $4.0 million interest-free loan to raze the original clapboard-sided clubhouse and

replace it with an all-brick colonial-style facility. Boasting both formal and informal,

inside and outside eating facilities as well as banquet and party rooms, the members

voted that the new clubhouse would be totally smoke-free. The rich cherrywood

paneling and the hunter green and burgundy décor mellow the high-ceiling, interior

spaces. Golf memberships are $20,000 with social (nongolf) memberships at $1,000

each. NCR employees did not and do not pay membership fees to join. Additionally,

each member must spend $150 per quarter in dining receipts and pay $225 (golf) or

$160 (social) in annual dues.

Needing to attract new members to support the renovated facility after AT&T

divested itself of NCR and given the growing age of its members, NCRCC

implemented an aggressive membership campaign in 1998. The goal was to bring

golf memberships to 680 and attract as many social memberships as possible. After

only moderate success, NCRCC commissioned McMahon Group to assist with

strategic planning.

NCRCC: Teeing Up a

New Strategic Direction

Used with permission of

Pamela S. Schindler

©2001.

Business Research Methods, 11e, Cooper/Schindler

2

McMahon Group specializes in providing research and strategic consulting to golf

clubs and full-service golfing facilities. “Golf club membership within the United States

is perceived as a discretionary luxury of life. NCR faces a similar situation found

elsewhere in clubs around the country—an older satisfied membership which sees

no reason to change what they perceive to be a good thing,” shared Frank Vain,

president of McMahon Group. “With NCR, we faced another wrinkle. Because

NCR was once corporately owned, NCR retirees and current employees saw

membership as an entitlement, a right.”

After McMahon’s First Impressions visit (a free on-site assessment where a

club specialist tours facilities, collects information on membership and operations,

and discusses industry trends with strategic planning committees), NCRCC’s board

hired McMahon to provide direction and assistance to NCRCC’s strategic planning

committee. “Historically, NCRCC has a 7 percent penetration rate among NCR

employees. NCR’s employee pool was trending smaller, providing continuing

downward pressure on NCRCC membership,” explained Vain. “With membership

segments of NCR retirees (1/3 of members) and current NCR employees (another

1/3 of members) getting less numerous each year, only the segment comprised of

non-NCR affiliates provides an opportunity for growth. NCRCC needs to become

a stand-alone club to survive.”

McMahon Group conducted six focus groups at NCRCC on December 3-4,

1998, involving 43 members, seven nonmembers, and 12 employees. Especially

among younger members (under 46) and nonmembers, a golf-only club was less

attractive than the full service array that some other area country clubs offered. A

consistent theme was that members did not feel they received the overall level of

service at NCRCC that they expected from a fine private country club, whether it

be in the dining operation or on the golf course. Staff members were frustrated that

meeting the board’s profit directive was often counterproductive to a high level of

service. The NCRCC board directed McMahon Group to conduct a membership

study to explore the feasibility of adding additional facilities, including swimming and

fitness facilities to attract younger adults and families with children.

McMahon Group distributed mail surveys to 1,650 members and their spouses

in January 1999 (see Exhibit C-NCR 1-2). A return rate of 57 percent and 48

percent, respectively, netted 886 usable surveys. Data were interpreted at ±3% (or

±0.1) at the 95 percent confidence level. Due to McMahon’s extensive consulting

and research experience with golf facilities nationwide, it was able to compare

NCRCC’s membership survey results with those of members of 80 other country

clubs.

>The Research

NCRCC: Teeing Up a New Strategic Direction

Business Research Methods, 11e, Cooper/Schindler

3

Overall, 72 percent of NCRCC members were either satisfied or very satisfied.

This is slightly less than the 79 percent satisfaction level for other clubs. Only 12

percent are very satisfied, with other clubs averaging 21 percent. The group with the

highest dissatisfaction rate (19 percent dissatisfied or very dissatisfied) was the key

55-64 age group, with the under 46 group generating 11 percent dissatisfaction.

While members currently saw the club as an “Adult Golf and Dining Club” (63

percent), many believed its future would need to incorporate facilities for children, if

the club were to remain competitive for new members. This was especially true for

those members under age 46.

Most current members joined for golf (80 percent either important or very

important) or dining (77 percent either important or very important). Most members

were satisfied with golf (81 percent either satisfied [29 percent] or very satisfied [69

percent]). However, level of satisfaction was lower with the over 65 group when it

came to course layout (58 percent very satisfied) and condition (77 percent very

satisfied). Fewer members were satisfied with dining (49 percent either satisfied or

very satisfied). However, even given some dissatisfaction, 61 percent felt their

membership was a good value.

The 37th Hole, the casual dining facility, generated concerns about speed of

service (27 percent either dissatisfied or very dissatisfied), professionalism of wait

staff (19 percent either dissatisfied or very dissatisfied), and menu variety (36 percent

either dissatisfied or very dissatisfied). The same concerns surfaced in the formal

dining area, with menu variety and meal-to-meal consistency generating the highest

dissatisfaction scores. It is very important for NCRCC to provide casual adult dining

(95 percent either very important or important), but less so for casual family dining

(78 percent), outdoor dining (69 percent), formal dining (44 percent), men’s grill

(37 percent), and women’s grill (22 percent). Dining prices are seen as the same (65

percent lunch, 48 percent dinner) or higher (32 percent lunch, 47 percent dinner)

than other clubs and restaurants frequented by members. Members overwhelmingly

continue to endorse the no-smoking rule (97 percent formal dining, 94 percent 37th

Hole, 83 percent bar/lounge).

“Members think of NCRCC as first a golf club, but the golf wasn’t meeting

expectations. Second, members see NCRCC as a dining club, but the members

were dissatisfied with the casual dining product and service,” shared Vain.

Survey results offered good and bad news. Additional facilities would not

be attractions to most current members, but many members are interested in improving

the current facilities. Fully 59 percent, however, were unwilling to pay higher dues

(including 43 percent of under age 46) to obtain the changes they found attractive.

>Some Results

NCRCC: Teeing Up a New Strategic Direction

Business Research Methods, 11e, Cooper/Schindler

4

“New facilities were an attraction for the non-NCR affiliated segment,”

summarized Vain in discussing what McMahon Group shared with the strategic

planning committee following the completion of the study. “New facilities, especially

swimming, fitness, and outdoor dining, provide the best opportunity to broaden the

attraction of the club.”

 • 74% golf (single or family) and 24% social, with 2% corporate

memberships.

• 65% are (23%) or had been (42%) employed at NCR.

• 55% male, 45% female.

• In each of four age groups:

• Under 46 (19%)

• 46-55 (23%)

• 56-65 (26%)

• 66 or older (33%)

• 74% lived within seven miles of NCRCC.

• 42% had been members for 20 or more years.

• 78% did not have children (under age 21) living at home.

• 41% belonged to a swimming/tennis club (15%) or fitness facility (26%).

• 81% reside in the Kettering-Dayton area year round.

Facility Additions

 Swimming pool 30 60

 Tennis courts 22 36

 Health and fitness center 30 49

 Spa 30 58

Activities

 For adults 26 40

 For families 23 53

 For children 18 47

>Who Answered the survey

All Members Members under 46

(% ) (% )

 Improving the driving range (Important or Very Important) 36

 Improving short game practice area

(Important or Very Important) 40

Current Facility Alterations

 Expanding bar/lounge (Important or Very Important) 41

NCRCC: Teeing Up a New Strategic Direction

Business Research Methods, 11e, Cooper/Schindler

5

1 Build the management-research question hierarchy, through the investigative

questions stage. Then compare your list with the measurement

questions asked.

2 Given the research question, how appropriate were the measurement

questions?

3 Describe the sampling strategy. How appropriate were the various sampling

design decisions?

4 What, if any, problems did you find with the questionnaire as a whole?

Consider structure, directions, question order, question phrasing, appropriateness

of response strategy chosen, etc.

5 If you were McMahon Group, how would you present the findings of your

study to the NCRCC board? Explain the rationale for your chosen method.

6 Given the data presented in the case:

7 What would you recommend to the board of NCRCC with respect to

adding facilities like tennis courts, a swimming pool, a spa, a fitness

center, and a year-round driving range?

8 What would you recommend to the board of NCRCC with respect to

adding or changing programming activities like social activities for adults,

families with children, and children?

9 What would you recommend with respect to changing current operations?

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