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League Play Doesn’t Always Add To Lifetime Member Value

Ladies USTA Team

How Users Can Be Abusers and Team Players May Lower the Value of Your Membership and Club

From a management viewpoint, clubs are businesses. In these uncertain times, this is an even more crucial viewpoint. Clubs need to show positive cash flow, year-in, year-out. Each event should show a positive cash flow.

Pricing, supply and demand, and life-time value of customers/members all enter into the equation. Several market-based rules apply. One is: You can always lower a price; you can’t easily raise one. Associated with this is one adage usually held in even higher regard by some marketers: A customer garnered through a low-priced offer will always have a lower life-time value.

This adage alone recommends keeping initiations and dues at the higher limit that demand allows. You may lose a few member prospects due to higher joining costs along the way, but members that do join are almost always better “customers” of the club with a higher life-time value across a longer membership.

Customer life-time value is the profit margin a company expects to earn over the entirety of their business relationship with the average customer. Let’s change the wording: Members’ lifetime- value is the profit margin a club expects to earn over the entirety of membership with the club. Let’s break this down a little.

To calculate on a large scale, an average member’s value to the club can be estimated for each newly acquired member taking into account the acquisition costs (marketing and operating expenses) and the cost of the services provided (professional fees, balls, training aids, etc). This gives us an average value for each member. This average fluctuates on the variables of how often a member purchases, the value of those purchases and how long that member retains membership. Or simply as a mathematical equation, to look at each member individually:

Member Lifetime-Value = Average Value of Sale × Number of Transactions × Retention Time Period × Profit Margin

Does League Play Add to Your Facility’s Bottom Line?

We all know the delicate balancing act that Directors of Tennis face when it comes to teams and league play. Interclub teams, USTA team offerings and other organized play are rife with politics. If allowed, teams and leagues can dominate a director’s and his staff’s time.

Leagues do serve a purpose. They create competitive and regular play at little or no cost to players. And here lies the dilemma. With play organized at little or no cost, how can a club and director keep a perceived and real value to the club and the program? Here a delicate balance must be struck: free and low-cost play versus the perceived membership value (intangible) and real life-time value of membership (tangible).

A question always asked is whether to charge for team practices to raise the value and spending of team members. Should the charge be weekly by attendee, where some team members may show up, or should each member be charged in advance, leveling the playing field? Another option is this: those who show up for practice get first dibs on that week’s match.

All three variations have benefits but all three also have issues. In terms of revenues and life-time values, the upfront charge (maybe including a fee for a uniform and match balls as well) can really add to life-time value. If team practices are mandatory and paid for in full, the average life-time value of a member goes up. If not, more often than not, the average life-time value of a member goes down, significantly.

Over the years there have been two methods of dealing with such league play. The avenues taken vary between clubs, and are dependent on a number of factors. Some of these factors include the level of control (aka micro management) a director desires over his or her program. Another factor is how the club operates on a revenue basis in relation to the ideals and ethos of the club. These two factors usually dictate a hands-on or a hands-off approach to teams and leagues, and the politics they create. They also play a large role in the perceived and real value of membership.

Leagues or Bust? Well, No. Look at Life-Time Value

Number of transactions and average value of sale is what always sticks in my mind as I watch a 9.0 mixed doubles league team take up 3 courts at peak time under the lights on a Thursday night. Teams take courts. courts that could be creating revenue. Teams also gobble up the time and attention of staff, from front desk up through to the director. These are costs, and yet, more often than not, revenues from teams do not cover the operating costs of the offer. Your cost of goods is higher than your retained prices.

If one takes into account membership initiation fees and membership dues, perhaps a slightly prettier picture is painted. However, those fixed revenue streams should really be saved for capital expenditures and facility improvements.

Often, a ladies’ or men’s team, if unhappy at a facility, will threaten their memberships collectively. Club managers and directors get wrapped up in the “heat of the moment” and think of massive losses if a team walks away. In reality, more often than not, these teams are not adding to members’ lifetime-values. Statistical data show that team members rarely take private lessons or jump in a clinic. but rely on inexpensive team practices for their instruction. Aside from uniforms, usually purchased after negotiating a discount for the team members, there are few purchases in general from team members. Team members travel as a pack and save money as a pack.

Another cost factor is an intangible. Every time a club team takes to the courts, half the players are non-members. Clubs are so particular about guest fees and how often guests may play per month or annually, but here, every weeknight or 10am on weekdays in Palm Beach County, most club courts are filled with 50 per cent non-members who are playing for free. Do the leagues pay guest fees? No. Maybe that is a bridge too far. Leagues do serve to provide competitive play. But the intangible, and often heard, perception is always there: who are all these non-members at peak times. creating another balancing act for director and manager? Even more importantly, league play preempts member use at peak times, creating another balancing act for director and manager. There is a cost to the club or facility that cannot be measured, but can be very high in member morale, non-usage and lost revenues and perception.

Teams and Covid-19 Are Opportunities

League play is an opportunity for profitability and adding life-time value, but one that has to be created correctly really from the outset with new ownership or a new director. And when that opportunity is taken, management and staff have to be on the same wavelength. As we resume play and leagues come back from the Pandemic, that opportunity appears once again.

Once a team is allowed to operate on a low-cost basis, it will be difficult to raise that revenue stream. However, a change in director, management, ownership or an elongated pause from play created by a pandemic allows for a resumption of league play under new guidelines. As league play commences, create a perception of value by charging adequate prices for all team practices, offer a warm up, and charge for uniforms and balls in full. If the team bucks and objects, well that is unfortunate. That team might leave and find a new club to call home, which often happens. But on the bright side, your membership life-time value just went up.

Ed Shanaphy is President of BeyondTheBaselines.com, a subsidiary of SBW Associates, Inc. He is a graduate of Duke University and The London School of Economics.

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Female Pros: Women Teaching Professionals Make More Than Men

Christine Murphy Foltz hitting a forehand on a tennis court

The first posting in our series “The Female Pro” of articles and podcasts focusing on women in the tennis and country club industry. In coming weeks and months we will be featuring female professionals on our BeyondTheBaselines.com Podcast along with articles investigating female teaching professionals and their participation in and affect on our industry.

Women do make more than men… teaching tennis. The USTA announced recently that they are pushing, in conjunction with the United States Professional Tennis Association (USPTA), for more women to enter the industry as teaching professionals. Although this is a lofty goal, what it does speak of is the short supply of women professionals. With such a short supply, demand is high. So is the take home pay of most female professionals in comparison to male counterparts at the same teaching level.

It’s been mentioned by women, whom we believed would be great instructors and ambassadors for the sport, that in large part they feel teaching tennis is a male-dominated profession. They may be right. Only 23 percent of teaching instructors and members of the United States Professional Association are women across the nation, according to the USPTA. This statistic really speaks to the law of supply and demand: such a low number creates a high demand for women professionals.

As a management consulting firm, we found interesting the announcement from USTA Florida which quotes Vice President of the USPTA National Board Trish Faulkner. Faulkner wants to add to the number of female pros and believes that it should be a focus of the USTA and USPTA. At this time, with such a demand for female teaching professionals, adding to the numbers of female pros could actually financially injure the current female pros in the industry. Adding additional female pros might lessen the current demand for female professionals as these organizations hope to expand the numbers of female teaching pros.

We have seen this at clubs and facilities in a broader way. Simply adding additional teaching pros “waters-down” the demand for lessons across the pool of pros at that club. Adding female pros to the industry might “water-down” the demand for a female teacher. We believe there is a lot of room in the industry but current female pros might see a drop in their income due to more supply over the coming years.

That being said, there is more work than there are female professionals. Clubs and facilities, both seasonal and year-round, continually search for female instructors to bolster staffs and cater to their membership and clients who prefer female instructors. One of the first questions we receive as a search consultant is: “Do you know any women professionals who might be a good fit for this job description?”

Changing The Norm

“I am seeing a great trend in the last few years where many of our certified young women USPTA members have gone after and secured high-level tennis positions,” said Faulkner, who notes USPTA membership is only 23% female. “There is still a perception that many high-level tennis jobs go to insiders or friends of directors, but we have educated general managers and other directors to check credentials and certification and look for the best person for the position.”

USPTA Certification is becoming more encompassing with 1500 hours of apprenticeship to include 1200 hours of experimental teaching and 300 hours of online course work and mentoring. These changes, making it certainly more of a process to become a certified professional, might affect the numbers of those entering the professional ranks. It could also affect the ratio of newly certified pros between male and female.

Female Sensibilities

When we act as a management consultant for clubs or as a search consultant for facilities, we here at BeyondTheBaselines.com always discuss the possibility of having one or two female teaching pros on staff, if not to serve as the Director of Tennis. There are several reasons why a woman professional on staff or running the program makes very good sense.

We all know that women are more sensible than men, don’t we? Well this may or may not be true, but there is definitely a sense among female students that a womanly understanding of the game while teaching a woman’s clinic can make all the difference. And why shouldn’t it? Shouldn’t female instructors better understand the women’s doubles game? Shouldn’t a woman instructor better understand the obstacles facing women players? We tend to believe that would be the case. The fact is that many students tell us that female instructors, in general, are better understanding the intricacies of women’s doubles and the strategies facing a woman’s double pair than their male counterparts.

We have found there are several reasons why female professionals, along with the fact that supply is low and demand is high, are paid more than their male counterparts. Over the next several weeks in our Series “The Female Pro” we will investigate some of the motivating factors leading to a higher pay scale and why female instructors often find themselves with more hours on-court than their male colleagues.

Jennifer Gelhaus, who beyondthebaselines.com announced as the new Director of Tennis at East Chop Tennis Club, Martha’s Vineyard, MA, changed careers and has instructed at some of the most elite clubs in the nation following a career in research technology.

Empirically, we have found that female professionals over the same period make on average 18% more in take-home pay than their male counterparts at similar positions. This data, collected through clubs for which we have consulted, provides us with some interesting numbers. Across the same level of position, women instructors tend to be on approximately the same hourly rate. For example, a female head professional average hourly rate has been in the region of $44 per hour taking total take home, on-court pay divided by time spent on court. Their male counterparts are slightly higher at just above $46 per hour. However, female professionals are on the court more. They are booked for privates up to 15% more than their male counterparts, both at the same facility and then if extrapolated over total number of hours taught across our data. Therefore, in our studies, female professionals total on-court revenues are higher than their male colleagues.

Clubs and facilities have understood these numbers, whether consciously or unknowingly. In general, employers have rewarded female professionals with a higher salary or stipend as the facility finds it has a greater revenue stream from retained percentages in connection with female instructors. We found, that facilities tend to reimburse female professionals slightly higher in relation to the revenues retained by the facility being higher.

Harking back to the short supply of female instructors, female pros can also garner a higher salary. Founder of Cardio Tennis Michele Krause explains through her comments to USTA Florida that the fixed hourly rate of compensation is an old model and should be updated. We agree and believe that female professionals coming into the industry have the opportunity to flip that model on its head. With such a dearth of female instructors, women who teach tennis can ask for more in terms of compensation and packages. And, in fact, we have seen this across the board. And clubs and Directors of Tennis should think outside the box in terms of incentives and compensation to retain not only excellent female professionals, but all professionals. The era of a flat, hourly rate on court should be long gone.

Fixed employee costs to a club or facility are higher where women professionals are concerned. Women professionals cost on average 8% more than their male counterparts at the same position across our research. This cost includes not only on-court retained percentages and salary costs, but paid time off, maternity leave, and other benefits in kind, such as housing costs. Because there are so few female instructors, female professionals are able to negotiate with their employers with better leverage. This leverage results in contracts that are more beneficial to the female employee than the contracts of their male counterparts. With paternity leave becoming more prevalent, these ratios might change.

In conclusion, women instructors on the court at present are enjoying an era in which they can reap more due to the lack of female teaching pros in the industry. As the industry matures perhaps this situation will change, but as Trish Faulkner notes, she only expects 1 in 4 members of the USPTA to be women in three years.

In May, we will breakdown the five reasons having a female professional on staff is essential for any best-in-class program at any club or facility.

Please see the USTA Florida article concerning women in the teaching ranks here.

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An Elephant On The Tennis Court

A Personal Perspective from Ed Shanaphy

I have never liked “Tennis Moms”. In the industry we can pick them out a mile away at any tournament. These women usually wear tennis clothes to their child’s tournaments – seemingly ready to walk onto the court in their child’s place and beat to a pulp the young junior on the other side.  They have their 8 year old outfitted with a racquet bag that is bigger than Federer’s and have all those slogans on both their own and their child’s shirts – slogans like “Beat It” or “The Ball is in MY Court!” There was always an elephant on the court when I played as a junior – the Mom staring me down from just outside the fence. Thank God there was a fence, otherwise she might come on court and wallop me.

I grew up playing against kids who had their tennis moms clapping at my mistakes. They coached at each turnover and scowled at any close call I made against their child. Tennis Moms would glare at me if I happened to go for a shot and hit a winner against their “Little Joey” who was always taller than I, as I have always been vertically challenged. I remember some of these moms more vividly than I do their kids with whom I hit long, pushy, points deep into a third set – long before the idea of a third set tie-breaker was born.

They gave their little ones thermoses of gatorade with supplements mixed in. The thermoses were more like massive jugs hanging off a plastic handle that the juniors could barely get their hands around. The weight of the thermos needed two hands so the big racquet bag kept falling off the child’s shoulders as he walked next to me as I carried my single Maxply Fort and paper cup full of water to the battlefield we were assigned to. The Tennis Mom’s car, parked as close to the back fence as possible for viewing and access, was stocked with bananas and anti-cramping powders. The prematch program included dynamic stretching and index cards describing various strategies in hieroglyphics which I thought looked like advanced algebra. Math SATs were not my strongpoint.

It’s our tennis industry’s version of the hit television show Dance Moms. I never liked Tennis Moms. I still don’t like them. But now… I’m a Tennis Dad.

My daughter, age 9, went to play her fourth tournament this past weekend and I had to fight hard from becoming a Tennis Dad. I guess we’ve all gone through it, whether it’s on a baseball diamond, soccer field or football gridiron. But tennis seems to bring the worst of us parents out. Maybe because it’s singles at this age and there are no teammates or team coach to which we can shift blame.

During six round-robin matches, I refrained from making motions toward my daughter and I looked away when she gave me a thumbs up so as to not be accused of coaching. We all know what that can lead to after this year’s US Open. I stopped myself from putting my fist through the glass table each time she hit a ball on the fly that was destined to test the strength of the fence behind her.

My daughter played wonderfully well amid my frustration with her going for too big a first serve. Apples don’t fall far from the tree. And in the minds of all at the tournament she won her first tournament and was looking forward to receiving the trophy. But, alas, she she picked up the third place trophy as the young boy whom she had beaten and knew he had to win against Olivia looked startled as he picked up the first place trophy. Really? What does she have to do to win a tournament at this orange ball level.

For those of you who are not at the cutting edge of 9 year-old competitive tennis, the USTA in their wisdom has come up with a progression for our American youth. Our tiny tots (4 to 7 year olds generally) play with oversized red balls which travel through the air very slowly and bounce low on every surface – on clay they just thud. Then as you move into the the upper echelons of the junior ranks and start playing Level 9 beginner tournaments in Florida (some regions don’t have Level 9 but start at Level 7), tournaments are played on a shortened court with orange balls. These are tennis balls that are less compressed and squishy. They travel slower than the regular ball through the air and bounce so that a junior can keep the ball more easily in their hitting zone – which is around waist height. Even with heavy topspin, the ball stays low so that the junior can create a technically valid swing with a shortened racquet which is just 25 inches compared to a regular 27 inches.

The jury is still out on this progression which moves on to green balls which are just slightly less deflated (Tom Brady would love USTA junior tennis) than the regular yellow balls we all know. Finally, at age 11, one gets to play with normal balls in the month of their birthday. You can either age out of orange and green balls or you can qualify by winning and participating to move up through the progression. Olivia’s not being named the winner cost her three or four trophies in USTA ratings (you collect stars and trophies through the progression) and not even being a finalist, having finished third, hurt her progression efforts.

So after what I thought was a simple miscalculation by the Tournament Director, who is a great motivator and volunteers his time to run this local tournament, I stepped into his office and questioned his mathematics nicely. He said that the “TDM” doesn’t figure winners by cumulative games won through the 7 rounds. “Ed, I just feed the scores in to the computer,” said the Tournament Director. I looked quizically around for an old-fashioned round-robin chart or tournament bracket of some kind. “Oh?” I said. So, if you win you come in third I thought to myself. Tough to relate this to a 9 year old still looking for her first tournament win. Basically, you feed the scores into the computer… and the USTA computer says: Thou Shalt Not Win.

This is when the Tennis Dad in me came out. There’s no handicapping in soccer – you lose. There’s no handicapping in football – you lose. But in USTA Junior Tennis, if you win, you lose. As I drove home trying not to show my emotions and attempted to get my head around the cumulative game calculations (my math SAT lagged far behind my verbal SAT as I mentioned above), I felt for my daughter. Olivia’s feelings were evident: she had been cheated out of a trophy by the USTA and its computer. Upon slamming the car door in the driveway, I had already in my mind formulated an email to my good friend up at USTA Florida’s headquarters in Orlando. I’d be nice. I’m in the industry and I don’t like to burn bridges, even though I am now a Tennis Dad. The line has to be drawn. I’d ask gently if there is a weighting or handicapping of which I was unaware.

Well the short answer is yes, there is a weighting and it put my daughter in third place, which really didn’t help her pathway to progress out of orange ball and up to green ball. She hates orange ball. And this is the rub: Youth progressions are great. But, my argument would be, progressions can’t be right for every junior. Boys and girls mature at different times.

And kids grow at various times. My daughter is 9 (she turns 10 in February) and is not vertically challenged. She’s 5 foot 4 and weighs 108 lbs and uses the same racquet that Serena uses – no junior racquet for her. She looks me in the eye straight ahead when I ask her to clear her plate. Someday in 2020 she’s going to say “no” as she looks down at me. This weekend, she played an 8 year old who came up to her waist. She hits the ball as hard as I can. She practices with a 12 year old who is top 10 in the USA and just returned from Canada where she represented the USA on the court.

But there was a deeper meaning to this weekend’s events. It’s good discipline to go through a progression. It’s a learning experience, not only for my daughter Olivia, but for me, the new Tennis Dad, so I can take my learnings to my job and figure out how to explain handicapping to my daughter. This is a big principle of life to explain to a 9 year old, because as I drove home formulating that email in my mind, I could also foresee future questions. “Dad, why didn’t I get chosen for gifted when Chas was the last boy to make it even between boys and girls but his grades aren’t as good as mine?” Or later on in life…”Dad, why can’t I get into that college and when was affirmative action started?” Or, “Dad, can you explain to me what a quota is?” If you win, you lose. Life isn’t always fair. And if you are the best at something, you still might lose.

Today was easy: “Dad, why didn’t I win when I had the most games?” Tomorrows are going to be more difficult for both of us. But the USTA helped me start this process. I worked hard at my answers this weekend so I could be trusted in the future. I discussed golf handicaps. I told her that playing one more orange ball tournament will help her topspin control. I showed her how her results over the weekend had moved her Universal Tennis Rating in a positive way – something that those colleges in the future will be looking at when she, God willing, hopefully applies. She nodded and took it all in. She agreed to play again at the USTA National Tennis Center in another orange ball tournament. I was happy that I had succeeded as a new, kindler, gentler Tennis Dad. It was then that she walloped me as she walked away to play with her Ipad: “Dad, why didn’t I win the last two tournaments when I came in second and third?” She has a memory like an elephant.

Ed Shanaphy is President of BeyondTheBaselines.com and has played and taught tennis competitively around the world, but is now, more importantly, a Tennis Dad.

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Continuing Education For Your Fitness and Tennis Professional Staff

The gym and tennis court can be a microcosm of life. Issues that we see in life are dealt with by making firm decisions. To be your personal best in the gym, one must be disciplined and make a clear decision to “stay the course” and improve. Same holds true on the tennis court. And same holds true for the professionals in the gym and on the court.

As a professional in the gym or on the court, these environments can become claustrophobic and lonely. A professional can find themselves almost hermit-like at a club or facility. The fitness center or tennis court fencing can be a cave where a professional hides every day from the real world… the horizon… and expansion through education.

Slowly, clubs and facilities are moving toward the idea of offering continuing education funds within departmental budgets. This has been a long time coming. Most contracts throughout the tennis and fitness industry do not cover the costs for employees or contractors to further education in their respective fields. Sometimes, the Director of Tennis or Fitness does have a line item in the budget for departmental continuing education, but far too often does this line item go back year after year used only for the Director or even completely untouched as budgetary constraints get tighter and tighter.

But continuing education really should be a requirement, if only to expose your facility’s professionals to new ideas, programming, and possible new hires.

In terms of fitness, we have found that Sara Kooperman is a leader in continuing education. Back when we were just starting Beyond The Baselines, a local personal trainer mentioned that SCWfit.com was a great source for fitness education. We looked and we liked. We’ve recommended their personal trainer certification for those new to the industry along with their Mania, a conference that tours the nation with fitness industry experts sharing their knowledge and experience, and sometimes selling the newest fad.

TRX TrainingTRX was just such a fad about a dozen years ago when it first arrived on the scene at SCW’s Mania… but now it’s a household and gym staple. We’ve worked closely with TRX (https://www.trxtraining.com) to enrich the country club fitness industry with their suspension training. TRX offers its own certification and education programming as well, rich in programming ideas.

Michele Krause, creator and owner of Cardio Tennis (http://www.cardiotennis.com), brought TRX on to the Cardio Tennis scene years ago and we have recommended that TRX be a part of this cross pollination at several clubs. It brings the fitness center to the tennis court and we’ve seen tennis players hit the gym for the first time after such a class on the court. We’ve added a fitness pro to tennis clinics across many clubs and found that this cross-fertilization is a fantastic way to boost club revenues. Michele is a leading proponent of continuing education and tours the globe providing teaching and instructional experience in tennis and fitness.

Tennis has so much in the way of further education for its professionals. From the United States Professional Tennis Association (https://uspta.com) and the Professional Tennis Registry (https://www.ptrtennis.org) through to the USTA, there are thousands of ways to gain credits while expanding a professional’s links within the industry. Just a simple “Drill Share” session on a court at one of the annual conferences can lead to a major change for a club’s membership on the courts the next summer.

For decades, industry professionals have been on both sides of the continuing education argument. Some say that the cost to them personally to belong to the National Academy of Sports Medicine or other such certifying association and to carry their insurance and to attend continuing education events is just too much for them to bear. We’ve heard it on the tennis side too: The cost of the USPTA or PTR (which provides liability insurance with its yearly dues) and then the cost of the conference just adds up to too much. Recently, the USPTA, like many of the fitness organizations, has added a continuing education requirement in order to retain professional certification from them. The moans from professionals across the industry were heard, but after the initial storm, it appears that the requirement has been met by the vast majority of their professionals. And there are strong reasons to maintain this requirement.

Jason Gilbert, who is USTA Florida’s Director of Competitive Tennis, also works with the USPTA on furthering the education of those professionals new to the industry with the Under 30 Initiative and liaises closely with the USPTA. He cites the number of young pros who leave the industry too soon and believes, rightly, that the lack of support and education after certification is a leading cause. The pros are hollowed out and lonely teaching hour after hour “caged” on a court and don’t find the support or education needed to “stay the course.”

As a community, it is our belief at Beyond The Baselines to help educate boards and committees so that they believe that continuing education of their professionals should not only be a requirement, but a favorable development for their staff at every level in the gym and on the court. If that education helps to expand programming and participation at the club or facility, it’s a valuable and inexpensive method of adding both member satisfaction and club revenue.