PCC Drives Toward Goal

Pinnacle Country Club took a “mulligan” in 2003.

Northwest Arkansas’ oldest elite golf community, PCC replaced staff, diversified its membership program and gave its course bunkers a $400,000 facelift. The changes helped grow golf memberships 23.2 percent, total golf-related revenue 7 percent and the Rogers club get closer to breaking even than any time since its 1990 inception.

Nick Watson, PCC’s general manager since 2000, said revenues edged closer to the private club’s $6 million operating budget thanks to owner Red Hudson’s commitment to “absolutely do everything right.”

“These changes came out of Mr. Hudson’s purchase of the club and the direction he wanted to go,” Watson said. “Essentially, he said members will pay for a quality product so we need to give them one. He looked at me and said, ‘It matters not the storms you encounter Nick, but did you bring in the ship. Make it happen.'”

Hudson, the former CEO of Hudson Foods Inc. in Rogers, maintains a residence at PCC and is the club’s chairman. He bought PCC for an undisclosed sum in January 2002.

Golf industry averages indicate the employment life of a course manager is about 2.5 years per club. Watson said that’s probably too short, but somewhere around five or six years it can be easy to “settle in.”

Heading into 2003, former course superintendent Greg Jones had been in place for more than five years, club pro Mike Dunlap was in his seventh, and the average staff tenure was rising. Watson made wholesale changes and said new blood is has re-energized the club.

Todd Towery, formerly the assistant course superintendent at Southern Hills Country Club in Tulsa, became PCC’s new superintendent in March. Paul Eiserman, PCC’s new head golf professional, was recruited in April from St. Albans Country Club in St. Louis.

Gerald Becker, PCC’s executive chef, arrived in May from Millennium Hotel in St. Louis. The club is also searching for a new controller.

PCC has 930 members in several categories including 335 golfing members. There were 63 golf memberships added this summer alone, but the magic number needed to get the course in the black is 400. Patti Burcham, PCC’s membership director, said she expects to reach that goal by September.

“We are doing extremely well and should continue to experience steady growth,” Burcham said.

There’s excitement about the possibility of PCC hosting Northwest Arkansas’ first LPGA (Ladies Professional Golf Association) event in September, although that’s still in negotiations. Construction on the roads for the final 200-lot Phase II of Pinnacle Hills, the club’s residential component that connects the nearby Pinnacle Hills commercial development, also recently started.

Clear Strategy

PCC spent more than $80,000 on marketing in 2002, nearly three times the amount normally spent. Much of that was incentives, Watson said, but the added expense did generate more than 300 new members overall during 2002.

About $30,000 was spent for promotion this year. Changes in the membership offerings were also made. Previously, the corporate membership option required a $20,000 initiation fee per person. To have a corporate membership, two people, at $20,000 per person, had to join. Now, one person can join at $20,000 with the option for five more associate golfing members to join at $6,000 per person.

“It’s not a wildly creative or new thing,” Watson said. “but it had not happened to this club.”

Watson said all the changes are not simply preemptive strikes to deal with this spring’s expected opening of Clear Creek Golf Club in Johnson — an upscale project that will include 250 home sites on about 430 acres in Johnson. John Tyson, chairman and CEO of Tyson Foods Inc., is developing the new 18-hole golf community that will have initiation fees of $25,000 or $30,000 for a corporate membership.

Pinnacle’s monthly dues are about $350, but Clear Creek’s have not been set.

“We see Clear Creek bringing more high quality golf to the area, which in the end is good for us,” Watson said. “We want to be the pinnacle. We feel we are already the best club in the community and we want to remain there by offering our members the best service at the country club and by continuing to improve ourselves.”

Member Mix

PCC’s core clientele is still the executive set. But its average member age has dropped by about 10 years during the past two.

“We are seeing a shift of what members look for in a private club,” Burcham said. “More and more, members are looking for a private club they can feel comfortable in and bring the whole family to.”

Another new recruitment tool, a $10,000 junior membership option for people under age 35, is behind the younger trend. Watson said the club will focus on providing more day-to-day type facilities to keep it competitive including possibly an indoor tennis facility.

“We run a minimum of three businesses with tennis, golf and restaurants, and to a certain extent, every business that opens in those categories is a competition to us,” Watson said. “If an Arbys opens nearby and one member gets excited and says I love Arbys and goes and eats there, well, that is a meal they could have eaten at the club.”

The course will have to continue to upgrade itself over the next several years to stay in the game. PCC had its first bunkers renovation this year that added new, whiter sand that’s more playable and resistant to the elements.

Towery said a $1 million-$1.5 million irrigation system upgrade is next. Turf quality will be a focus and in about 10 years, the greens will also have to be revamped.

Shop Talk

Eiserman, the club pro, said since his arrival in March, he has been restructuring different areas of the golf operation. He manages all golf programs, staff and financial operations of the golf sector.

In the pro shop, Eiserman reduced inventory and prices and by the end of 2003 figures to grow retail sales 14.8 percent from 2002.

“Our sales were in the $270,000 range last year, and we were carrying an average of $160,000 in merchandise,” Eiserman said. “Now, we are carrying an average inventory of $110,000 and we are selling $310,000.”

Eiserman forecasts a merchandise turnover rate of 2.8 percent at the end of 2003. That’s a product of dividing 2003’s estimated $320,000 in sales by the average $110,000 in inventory.

“We put in a buying plan and we didn’t overbuy,” Eiserman said.

The pro-shop doubled its sales of hard goods, such as golf clubs, this year. Eiserman priced the items at wholesale plus 10 percent of the cost and shipping. He said members are buying because they believe that price is fair to help support the club. He’s also increased the stock of demo clubs for members to test and made himself available to listen.

“I spent a lot of time when I got here going out on tees, just talking to people and getting to know them,” Eiserman said. “You can’t wait for them to come to you.”

Eiserman has given around 270 golf lessons this year, a figure estimated to be about 10 times as much as has been done in the past. Rates for a 30 to 45-minute lesson start from $50 and vary depending on the age of the golfer and available discounts.

“I want to see the membership get full,” Eiserman said. “We made changes in the back of the house to our internal systems and structures to make us more time efficient to have more time to be with our members.”

Burcham, who has been with Pinnacle for 3.5 years, said that Pinnacle expects a certain amount of attrition in its membership due to the mobility of its kind of clientele.

“But I think our members have experienced a stronger sense of caring because the managers really do listen to their suggestions and concerns,” Burcham said. “They also respect the fact that we have to make sound business decisions, yet maintain high standards.”