Pricing to Attract New Members to Your Golf Club


Pricing to Attract New Members to Your Golf Club

The key issue with setting any price is simply value. Specifically, it is the prospective member’s perception of the value your golf club offers him. Before settling on your pricing, stop and look at the world around you, it is a far better indicator of what people will pay for goods and services rather than simply a comparison to those golf clubs around you.

Think About This:

Most luxury car models like BMW, Mercedes, and Lexus have sticker prices starting at $70,000 and that frequently go up over $100,000 and that’s for a product that won’t be in the member’s driveway four years from now and will be worth a tiny fraction of what they paid when it moves to another owner.

Most couples spend over $7,000 on a seven-day cruise when all is said and done.

Two seats to an NFL team with just eight regular season home games are $3,000 and there are 66,000 people there! (These are just average club seats on the ten-yard line!)

Golf memberships are actually an extraordinary value compared to most forms of sport and entertainment. The key is in how effective you are in communicating that value. To a large extent, the price is immaterial especially if we are talking about a few thousand dollars up or down.

Your job, of course, is to communicate that value to your members and prospects and I would not be above occasionally making comparisons like this in your club newsletter to reiterate the value of membership on an ongoing basis. Few golf clubs if any put any effort into constantly reselling their membership and it’s a huge mistake. This does not have to be “in your face” sales, but just subtle hints on the website quotes from members about the great friendships they have developed at the club, etc.

All things being equal it makes VERY little difference at MOST golf clubs whether your monthly dues are $195 or $289, $330 or $395, $525 or $625. Whatever they are, it must be enough with a reasonable amount of members to run the place at the standards you have set. It’s that simple!

The real question is NOT THE PRICE because, in reality, the PRICE must be at LEAST what it MUST be to operate the golf club. If it is to be more than that, you should simply decide what that amount should be!

The real KEY is in HOW the membership offer is packaged, how the value is communicated and whether the initiation fee is priced right.

Initiation Fee or No Initiation Fee?

There is a growing trend among many golf clubs to reduce or even eliminate initiation fees in an attempt to attract more members, but the truth of the matter is it’s a faulty and desperate strategy.

We are in favor of initiation fees if for no other reason that the very fact you have them allows for some negotiation or wiggle room when needed. Meaning you can’t give away a $5,000 initiation to add value to the transaction if you are not charging one in the first place, now can you?

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Typical Initiation Ranges

Here are some typical initiation fees and the normal categories they would fall into:

• Low end $1000-$4999

• High Low End $5000-$9999

• Mid end $10,0000 – 19,9999

• High mid end $20,000-$29,999

• Mid High End $30,000-$49,9999

• High End $50,000-$100,000

• Super High End over $100,000

As I am sure you are aware initiation fees vary tremendously from club to club and very often the “Best” as in oldest and most famous golf clubs do not have a particularly high initiation or dues.

How Should You Determine Your Initiation Fee?

All things being equal there are really only two ways to help you set your fees. The first based on the golf club’s income goals the second based on social goals. Meaning you should base your initiation fee on either how much you want the club to make from it, or hold if it’s refundable or:

The fee should be based on the social economic profile of the people you are trying to attract to the golf club. This, of course, is nowhere near as good an indicator of membership compatibility as it used to be!

The key to how much you can charge is based on both the prestige your club has in the community and the value that it is perceived to deliver. There is very little difference to most affluent people between say $17,000 and $23,000, especially if it’s a product or service they want. What happens to the initiation fee should they leave or move for any reason is a key factor; for even affluent people do not want to waste their money!

What Happens to My Initiation Fee?

What happened to a member’s initiation fee tends to be of far greater concern than the actual amount of the fee!

Does the initiation fee:

• Simple go away i.e. is a fee used to operate the club
• Get returned in full upon the member leaving
• Get partially returned
• Grow or shrink in value based on current membership pricing or even the open market?
• Get refunded by only on a scale matched by incoming new members
• Or some other combination of the above

How these questions are answered can have a far bigger impact on attracting new members than lowering or raising the fees themselves. Obviously, a full refund upon leaving is the most desirable response, with the whole fee disappearing, the least desirable. Some clubs even change initiation fees based on whether or not the fee is refundable. With a lower priced initiation fee being lost, while if they opt for a large fee it is refundable.

Another common practice is to have the membership fee refundable over a period of time so that people staying say ten years will get all of their money back while people staying five years might only be entitled to a 50% refund!

The more flexible your initiation fee return policy, the easier it will be to sell memberships, especially with the highly transient nature of today’s workforce; so choose your options with care!

Initiation Deposits

Initiation deposits might be considered in lieu of initiation fees as they provide a source of cash flow and are treated as a long-term liability versus income. With these, a plan for repayment must be included as part of the membership agreement.

In the next article, I will show you how to use the Initiation fee as part of an irresistible offer to attract an astonishing amount of new members; for now, let’s review.

To Summarize

Golf Membership Sales

The Membership Sales Success System is a complete A-Z of everything you and your staff need to know to increase your membership sales.

Think your club’s pricing through from scratch. There is no quicker way to make money and no surer way to go broke than through pricing. Many clubs have unrealistically low pricing that fails to support operations or increase dues with inflation. Others are off the map at the higher end of the spectrum; the key is to aim for the maximum dues your market will bare, which if the value is clearly communicated, will almost certainly be more than you are charging today!

All The Best,

Andrew Wood
Legendary Marketing
Direct: 352-266-2099


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