Stumbling Blocks

For waste elimination to work properly, club operations have to be carefully scrutinized. The risk with budgeting is that it becomes an insular affair, with managers locking themselves in their offices to progressively tweak columns of figures until the chief accountant gives an all clear.

Waste elimination requires that safeguards be in place to ensure the value proposition is not compromised: Cut waste, not costs. Waste elimination may lead some people to look for shortcuts and chances to dupe customers. This could be absent-minded or devious; in either case, it needs to be quickly dealt with. If you have a juice bar, filling glasses only three-quarters full when you used to fill to the brim is not cutting waste; it is cutting value, and conning members and guests.

Waste elimination can also be used to deliver more value to members and raise satisfaction levels. Do members feel they got fair value for their membership fee? If yes, you are likely to keep their business; if no, you are likely to lose them. Some facilities operate along the lines of making money from members who pay and never show up. That is unlikely to be a sustainable business practice, as competitors will emerge who will ensure their members get their money’s worth.

Would you have the courage to put up a poster in your club, or send a letter to each of your members, that states, “Did you get what you expected, what you paid for and what you wanted from us?” Cut waste on all sides.

If you have a racquetball-playing member who joins and never comes because you converted your courts, you have a year of his money, but you lose a decade of referrals. To reduce waste instead of costs, make sure you knowwhat your members’ needs and expectations are right from the start.