08
December
2022
It's the great dilemma: how should a club price its membership fees for the next season? Industry expert Simon Jones explores the variables that can affect the decision. A question that presents itself every year, and a decision that normally comes down to inflation, cost of operation, capital spent on facilities and so on. This year is no different but looking through the lens of incredible economic pressures makes this is a significant decision and one that will have a bearing on the future of some golf clubs. Clubs must decide the level of increase in fees when CPI is over 10%, increases in utilities have gone through the roof, coupled with the living wage increase and staff shortages having an increase on the daily operational costs, and all this whilst trying to balance the massive impact the cost-of-living crisis is having on your member. The member does have a choice and will have to balance their own lifestyle. When assessing the 'at risk member', you might find the recent upturn in new subscriptions are those that are in this category, along with our core membership base whose own pockets are being squeezed. Will members downgrade, or perhaps move to a points based option? Do they take some time out and pay a green fee as and when they want to? All questions that are real to most clubs today, and all outcomes that will impact subscription revenue and place additional operational risk to a club. Yes, it is a dilemma, one that nobody has a definitive answer to. However, you run your golf club and you have to make decisions that are unique to your club, therefore this is not a one size fits all answer. Golf is a fragmented industry with a wide variety of clubs from low volume and high priced, to clubs that have a relatively low price and a high volume, and everything that sits in between. Regardless of the style of club you run, the question is still the same - how do we set our price for the next golfing year? Strategic Thinking The answer lies in what your strategy is. Do you look at the renewal as a once-a-year thumb in the air or is it a considered decision based on core factors and actions that are monitored and implemented throughout the year? I regularly get asked, "what % should we increase our fees by?", but this is the wrong question. You have to look at your membership in detail, looking at each category's value, the balance of fees, usage of category, the quality of the product, the competition and your target audience. Along with what do you provide to your members throughout the year - do you give them “value” for their subscriptions? To look in more detail at these points: Category Value: What each membership category is worthIdentify the financial significance of the membership baseEnables assessment of value difference between each categoryEnables a strategic opportunity to level up rates or increase one category more than... Please LOGIN to read the full article.
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