The Experience Paradox

The F&B operation is losing money. The board gets concerned. Costs need to come down. So you start cutting: cheaper ingredients, less staff training, thinner napkins, reduce portions, delay equipment replacements.

The numbers improve slightly. For a quarter, maybe two.

Then members start using the facilities less. The food isn’t quite what it was. Service is slower. The staff seem disengaged. The experience has degraded just enough that people choose to eat at home, or go elsewhere. Revenue drops further. So you cut more.

And here’s what I see at board meetings: “We’re losing money hand over fist and the food’s terrible at the same time.”

That’s the trap. The experience paradox.

Here’s what’s actually happening: you’ve never actually decided what your F&B operation is for.

Is it a profit centre? Or is it a member service?

You need to pick one.

But here’s the critical part: whichever you choose, you have to start with experience.

Let me explain what I mean.

If it’s a profit centre - if you’re running this as a business - then treat it like a business. Price it properly. Take your cost, multiply it by four, achieve your 70% GP. Staff it professionally. Buy quality ingredients. Invest in proper equipment, good glassware, decent napkins, quality cutlery.

You’re there to make a profit, yes. But you still need to deliver an experience that people value. Every successful restaurant in the world does this. They’re profit-driven businesses, but they start with a clear experience they want to deliver, then price it to make that experience profitable.

The value proposition is honest: this is what you’re getting, this is what it costs, this is the experience we’re delivering.

If it’s a member service - if this is an amenity, part of what membership provides - then understand what your members expect. Be very clear about what that service looks like. What are your opening hours? What quality threshold are you setting? What products are you buying? What experience should members receive?

And then exceed those expectations. Don’t cut to try to make it profitable. Fund it properly through dues or assessments. Staff it generously. Invest in the quality and touchpoints that make it feel like excellent service.

You’re still starting with experience - you’re defining what “great service to our members” actually looks like, then building the operation and the funding model to deliver it.

Either way, experience comes first.

The problem, the trap that kills clubs, is when you start with the finances instead.

You look at the P&L. You see losses. So you start trying to make the numbers work by cutting costs.

But you haven’t defined what experience you’re trying to deliver. You haven’t decided whether you’re a profit centre or a member service. So you end up with this impossible combination:

Member discounts but poor quality.

Extended opening hours but disengaged staff.

Service expectations but budget constraints.

You’re trying to offer a service to your members, but you’re also trying to make it profitable. You have downward pressure on pricing, member discounts, expectations of availability and quality - but you’re cutting costs to try to hit financial targets.

What ends up giving? The experience.

You end up with neither a great service to your members nor a profitable business. The quality’s mediocre. The staff are stretched too thin or not properly trained. Members aren’t getting what they expect. The atmosphere feels off.

And you’re still losing money.

You’ve sacrificed experience trying to thread an impossible needle, and now you have the worst of both worlds.

The solution starts with experience.

Not with the P&L. Not with “how do we make this break even?” Not with cost cutting.

Start with: what experience are we trying to create?

Be specific. Is it accessible and casual? Is it high-end and refined? What are the touchpoints that matter to your members? The quality of ingredients? The service style? The atmosphere? The consistency?

Define that experience clearly.

Then decide: are we a profit centre or a member service?

If you’re a profit centre, price the experience to be profitable. Be honest about what it costs to deliver quality. Treat it like a business that needs to generate returns.

If you’re a member service, fund the experience properly. Accept that it will cost money. Build it into dues. Stop asking it to be profitable.

But don’t start with the money and work backward.

Because when you start with the financials and try to work backward to experience, you end up cutting. You end up with cheaper napkins, inferior ingredients, understaffed shifts, equipment that barely works, servers who are rushed and stressed.

You end up with an experience that doesn’t meet expectations.

And then members stop coming. And your financial problem gets worse, not better.

This is the experience paradox: the only way to solve the financial problem is to stop starting with the finances.

Start with experience. Define it clearly. Build it properly. Then price it or fund it in a way that makes the numbers work.

If you’re a business, be an excellent business with clear value and proper pricing.

If you’re a member service, be an excellent member service with proper funding and no apologies.

But you have to choose. You have to be clear about what you’re building.

And you have to start with experience.

Because if you don’t define what you are, if you don’t start with experience, you’ll live in constant chaos. Constant complaints. Constant losses.

The clubs that get this right? They’re clear about their identity. They build excellent experiences. And the finances follow.

The clubs that don’t? They’re stuck in the middle, cutting their way to mediocrity.

What are you building?

Quick one — if you’ve not done this yet, my scorecard helps you spot gaps across guest experience, costs, and day-to-day ops. Takes a few minutes and you’ll get a proper report at the end.