The sweet spot: Finding the best scale of membership fee increases

Imagine finding yourself in a tricky situation where your current income is no longer enough to cover your expenses. Perhaps your main sponsor pulled out, or the electricity bill has tripled since last year.

In this situation, you may consider raising membership fees to cover the shortfall. But this can be a tough decision because you surely don't want to charge members too much and risk making them angry or losing them.

So, this leads to the million-dollar question: How much can you crank up the fee without stepping on your members' toes?

The average limit is not necessarily your golden limit

Our latest data uncovers the secret to striking the perfect balance when increasing membership fees. And spoiler alert:

But wait a minute before you bump up the fee. Because we can't guarantee that your club will triumph with an 8% increase. After all, we are only talking about averages.

And not all clubs have the same potential for raising membership fees, as this is influenced by different key factors. One of them is how members feel about a possible fee increase based on characteristics like NPS or age.

So, how can you make this fresh data about the scale of the fee increase work for your club?

Prioritize members to achieve the highest possible tipping point

Our data shows that members generally are willing to pay quite a lot extra before they find the increase too much and decide to leave the club. And this information is a keystone if you want to increase the fees as much as possible.

Let's dive into the numbers and see why.

How many members will stay when increasing the membership fee by 4% or 8%.

If you increase your membership fee by 4%, it might not seem like a big deal. And in fact, nearly 70% of your members think the same. These members will stay despite the small price change.

In contrast, an 8% increase might sound like a lot. And as the graph shows, more of your members agree. In this situation, fewer members will definitely stay.

But the more aggressive approach doesn't necessarily mean losing more golfers. And this is why.

% of members who might leave when increasing the membership fee by 4% or 8%.

When doubling the scale of the increase, we see a 10% difference in people who are in two minds about their decision. So, a slight increase of 4%? Fine. An increase of 8%? Give me a second. The doubt kicks in more heavily at the higher price change.

But eventually, this doubt can be your key to success.

But this success is not easy to achieve. First of all, effective communication with your members is essential in this matter. But it's not just about telling them what's happening - you also need to take the time to listen to their feedback and concerns.

And this leads over to the member experience. If your club doesn't offer a great atmosphere, fantastic service, and tasty food, why would members be willing to pay more to be there? By prioritizing both communication and member experience, you can maximize your potential for a fee increase and see the returns you're looking for when going for a high fee hike.

Doing the increase wrong can lead to frightening results

By now, you've learned about your club's potential and whether your members are likely to stay or waver when you raise their membership fees by a certain scale. But let's face it. There's a less exciting aspect to this topic.

Because how many members will downgrade their membership or even leave if they have to pay more for their current memberships?

Also, some members or guests might not find the pricier membership worth it. If those members decide to stay anyway, they will most likely downgrade their membership, for example, from a full-time membership to a flexible membership with restricted playing rights.

Retaining flex members at the club is, of course, better than them quitting, but you still miss out on the potential to maintain them as standard members.

% of members who claim to downgrade or leave the club.

The interesting part is that the number of members who say they'll leave or downgrade their membership remains the same whether you increase the fee by 4% or 8%. But there's still a risk that more members will join them.

CxM experts can aim for double-digit percentage increases

So, while a high rise of 8% on average may have the same output as a lower increase, it won't benefit you if you can't convince the members in doubt to stay.

But what does actually happen if you are knee-deep in utility bills and feel the urgency to raise the fee intensely?

In short, once you cross the 8% threshold, members might feel like the increase is too steep, and they may start looking elsewhere for their golfing needs. But of course, this all depends on your club's work with member experience before the increase and how well you can convince your members to stick around.

Let's say your club is a CxM powerhouse with great relationships with your members. In that case, you might be able to pull off a double-digit increase and actually benefit from it. And if you're excellent at damage control, you can minimize the fallout from cancellations.