Customer or debtor? Are we treating renewals and membership fees as an opportunity?

29 June 2022

The team at National Office have recently uncovered an audio recording from the Clubs New Zealand Conference and AGM, 1999.  The audio is of a keynote presentation from Steve Parker, expert in marketing and associated matters, and a well established “clubby”.   This wasn’t the first time Steve spoke at a Clubs New Zealand event and it certainly was not the last, but what is striking about this particular, 23-year-old piece of audio is that it is 100% relevant to clubs today.

During the presentation, Steve talks about value in a customer; understanding the customer mix, membership value, exceeding customer expectations – always, why we use market research in this business and database marketing.  About halfway through the presentation, he gets to membership subscriptions and in particular renewals time.

“Renewals, typically what we do in clubs with renewals, and let’s call this Australia, rather than New Zealand, as I am not totally familiar with what happens here, but in Australia we send you a bill, and we usually send it to you around Christmas time, so we are getting everything as smart as possible, aren’t we?  We send you a bill, and say if you don’t renew your membership, you won’t be a member, and we send it to you at Christmas time just when you need a bill like a hole in the head.  And then, if you don’t renew your membership, then we send you a shitty letter, and we say listen, if you don’t renew your membership you’re out, you’re gone, finished, don’t want to know about you…”

It is fair to say, he is not to far off the mark with what happens here in New Zealand, even today.  What we should be doing, instead of sending a bill, is sending an invitation to renewal.  It might not seem much on the face of it, but there is a big difference between a bill and an invitation.  We should be saying to members “we invite you to renew your membership and to come on down and spend your money in the club, please”.  We should be kind about it, and we should be treating our members like proper customers, and not an electricity account.  No one likes getting bills, but we do like getting invitations.

When you send out your invitations to renew, do you take the opportunity to tell members about the services and facilities and entertainment you have on offer?  If not, why not?

With the continual battle to get bums on seats, you need to take advantage of every opportunity that you get, to invite and entice your members to spend their dollars with you and to let them know, that there is value in their membership.

Your membership fee plays an important role in creating loyalty and perceived value.  In recent years we have seen clubs move to introduce low-cost membership, sometimes as low as $5.  The aim here is simple, get people to sign up.  But what we have learnt is that more members, doesn’t necessarily = bums on seats, and if a year later we are simply sending a bill for renewal, we often never see that member again.

We need to demonstrate to members that their membership holds value, and we do that by highlighting all the benefits they can choose to take advantage of by being a member.  You will find that when you list all those benefits of belonging, the perceived value is undoubtably going to be higher, than whatever dollar value the member has paid for their annual sub.

In addition to reflecting the value your members will receive from belonging to your club your membership fees must be cost based. As a member of Clubs New Zealand, you pay an annual capitation fee of $4.20 +GST per member, your membership fee should reflect this and any other association fees you pay on a capitation basis, for example:

As capitation fees are paid by members, you can set aside the portion allocated to association fees as it is received from the member.

Your club belonging to Clubs New Zealand benefits your members, therefore you should be highlighting that a portion of their sub covers the Clubs New Zealand membership, and what benefits that gives them i.e., reciprocal visiting rights, participation in Clubs New Zealand Sporting Events, access to the Clubs New Zealand Mobile App and a club that belongs to a network of over 300 clubs across the country.

Your renewal process and membership fee should not be viewed as a chore or token; it serves a real purpose in enticing members back, establishing value and covering costs.  A number of clubs have advised us that they now outline the breakdown of the annual membership subscription on their application forms and at renewal which has had very positive feedback from members.

There is no quick fix solution to bringing people into the club, but rather club committees and managers need to understand and adapt to the needs of its members and the community, the adage of “we’ve done it like that always, so we will continue to do it like that” is serving no one. The fact that a 23-year-old piece of audio still rings true today, means that we still have a lot of work to do.  Clubs must think differently, treat members like proper customers and identify the benefits and services that you are providing to ensure that belonging to the club continues to be of value to existing members, while at the same time attracting new members and ensuring that your club, is the place of choice for them to spend their dollars.