Country Club Cuts Costs for Health Insurance and Food

Like many a country club operating in the current economy, costs for this Mid Atlantic client are increasing even as membership is decreasing. Efforts to cut costs while maintaining high-quality member services is a tough balancing act.

On one hand, members may leave if dues, fees and prices increase to offset financial pressures in other areas.

On the other hand, if costs are not addressed, quality and service can suffer, putting services and member retention at further risk.The country club’s General Manager and Executive Chef turned to Expense To Profit (ETP) to help find ways to cut costs without sacrificing service or quality ─ a hallmark of ETP’s consulting expertise.

The many amenities of the high-end country club include golf, tennis, swimming and fitness as well as casual and formal dining and catering for private events.

How ETP analyzes, evaluates information

The first expense ETP evaluated was Health Insurance. While negotiating with the existing provider an increase of 5% was negotiated to a 7% reduction. ETP then turned to the market to find competitive alternatives to the existing health insurance offering. A competitive offering was brought to the client without increasing deductibles or employee co-pays for a 22% reduction in premiums. The result was a switch to a better offering costing the Club less.

The second expense category reviewed was food services. Using ETPs methodologies and a proprietary suite of tools, our Consultants created a market basket with the top 80% of the clients spend. The market basket contained dry groceries, dairy products, refrigerated goods,frozen goods, beverages, meats and seafood, non-food items, and produce.

ETP evaluated suppliers on more than price. Also used were criteria important to the client,including product and service quality, delivery windows, payment terms, incentives and online ordering.

Bottom line: The incumbent Produce supplier cut prices nearly 10% and a new provider reduced prices for all other goods by more than 22% for overall savings of close to 19%.