Market Dominance Case Study: Owning a (Large) Consulting Niche

mcmahon-good180I’ve talked a lot recently about the advantages of being the Go-To in your chosen market and have offered up a couple of high-profile examples. But there are plenty of examples in specialty markets the average person isn’t exposed to. An example is McMahon Group in St. Louis, the Go-To for private club strategic planning and consulting, and I experienced the power of their Go-To status while playing the role of buyer.

thinkstockphotos-628711134I was once helping a premiere private club that was falling prey to the same tough trends impacting all private clubs across the U.S., if not the world – an aging membership, flat membership numbers that would decline if the club didn’t change, and less-than-optimal utilization of club facilities and programs – despite this being a club that was highly respected. I was on the long-term planning committee tasked with addressing this problem. One of our first steps was to seek out a firm that could help us conduct a member survey and determine a plan of action based on the results. In this situation, you can imagine how price sensitive the club was. However, results were more important. We could have sought out a generic market research firm. Afterall, how hard is it to put together a bunch of questions about how and why members use club facilities and what they felt was missing from the member experience? Heck, we could have done it with a free online survey tool.

We weren’t just after a survey, though. We were after a long-term plan that would improve the club’s future. We needed expertise. As it happens, there is an entire sub-specialty of private club market researchers and consultants we could turn to. Who knew? The club leadership agreed that it made perfect sense to hire a firm that understands the unique issues and trends impacting private clubs, even if it was going to cost a little more. We knew that member feedback and input was just one piece of what the club ultimately needed, and we wanted a firm that could help us ask the right questions, interpret the feedback appropriately and guide us toward best actions.

thinkstockphotos-512814378Then it became a matter of selecting the firm. The private club sector, like most industries, is a tight community at the upper leadership levels. Just like any industry, club managers all belong to one leading professional association, see each other at meetings, read the same publications, network with each other, and progress from club to club as they climb their career ladders. As a result, the general manager already knew of the top three consultants in the business, telling us that one, in particular, was the Go-To; so we interviewed all three. Two were impressive – they had great credentials, stellar reputations, and “trusted partner” status with their clients; had done many similar projects; obviously had deep expertise in this specific area; and offered strong teams. The cost of their services was also extremely reasonable and competitive. We knew they could each do a great job.

thinkstockphotos-77739477The third firm, McMahon Group, was all of that and much more.  In addition to the above, it was the thought leader in the field. McMahon didn’t just serve the industry; it led the industry by proactively investing in, conducting and sharing private club trends research, not just on where the industry had been and where it currently was, but also on where it was going. When we had lunch to interview the company’s president, Frank Vain, he humored us by listening to our litany of the club’s challenges and problems; but he could have told them to us himself, because they were no different from what he saw at every club McMahon Group works with.  He was finishing our sentences. And further, he laid out the trajectory we were on. Most of all, he prescribed the solutions right then and there – told us exactly what we needed to do.

In talking to Frank, it was clear that McMahon Group lived, ate, and breathed private club trends and operational excellence best practices. This is all it does. It knows everything going on in the industry. It knows all of the key players.  At its own expense, it studies and watches the trends on everyone’s behalf and warns the industry of what’s coming on the horizon. McMahon has taken spiritual “ownership” for understanding and solving the industry’s most pressing problems. And when you hear it talk about the industry, you can tell this company cares.

In the end, we hired McMahon, even though it was about twice as expensive as the other options. The reason is that we felt the club would get great value and an accelerated
path to results – we knew McMahon would not just execute a survey to tell us what the members wanted but would help the club quickly take the optimal actions as a result. We weren’t buying market research services – we were buying a treasure trove of expertise, experience and wisdom. It would help the club solve the problem – and fast.

That’s exactly what happened. We did the survey. It told us precisely what Frank had told us it would at lunch that day (yes, we could have saved a lot of money by letting him just give us the answers…but we needed to hear it from the members). The action plan ended up being exactly what he had prescribed during that same conversation. As a result, membership growth and club utilization have soared. The Club has since been thriving and doing better than ever, even through the “Great Recession,” when many clubs suffered badly.

The private club sector might sound like a small, limited market for a company like McMahon Group to target, but it’s about a $26 billion market consisting of 14,000 clubs in the U.S. alone.  McMahon doesn’t have to capture much of that market to have a great business. And by capturing the top end of that market and charging a premium price for premium value, McMahon has built quite a profitable business with a reputation that precedes it. It is, indeed, the Go-To in its space.

Give some thought as to what your company can do to establish this kind of reputation and make this kind of contribution to individual customers and your industry as a whole.

2 thoughts on “Market Dominance Case Study: Owning a (Large) Consulting Niche

  1. Pingback: Infographic: Anatomy of Content Marketing | Be the Go-To, Not a Me-Too

  2. Pingback: Part 5 of What a Go-To Does Differently: Evangelizes | Be the Go-To, Not a Me-Too

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