In the realm of golf club management, the handling of flexible membership categories poses significant challenges and expenses. This article examines the financial benefits of outsourcing flexible membership management to PlayMoreGolf, a leading membership management company. It compares this approach to the traditional in-house method.
Flexible memberships offer members the ability to enjoy golf club benefits without committing to a full-time membership. This category appeals to those who seek flexibility in their golfing schedules and financial commitments. However, the administrative burden associated with managing these memberships can be substantial.
One of the primary expenses clubs must contend with is the cost of acquiring new members. This involves marketing efforts, prospecting, and various promotional activities aimed at attracting potential members. Financing these acquisition efforts can be a significant drain on club resources.
Marketing can be outsourced to an agency at £500 per month plus VAT, totaling £7,200 annually inc VAT. With flexible membership equating to 30% of the time spent this is a cost of £2,160 per annum. This doesn’t include actual advertising spend. A digital advertising budget of £150 per month dedicated solely to flexible memberships results in an additional £1,800 annually. This amounts to £3,960 inc VAT annually for marketing efforts dedicated to flexible memberships.
Assuming a joiner rate of 3 members per month (36 members annually) this equates to a cost of acquisition of £110 per member. In contrast, PlayMoreGolf offers a fixed success fee of £58.8 plus VAT per member (£70.56 inc VAT). Thus, equates to a saving of approximately £40 per member just in marketing prior to all other aspects of member acquisition, from initial prospecting to final sign-up. By leveraging PlayMoreGolf’s expertise and established methods, clubs can reduce or eliminate the need for extensive marketing campaigns and focus on enhancing member experiences.
Managing memberships in-house requires a dedicated team to handle prospecting, signing up members, and renewals. With the assumption that one person manages all tasks at a salary of £28,000 per annum – £31,360 inclusive of National Insurance. 30% of their time is devoted to flexible memberships, the cost dedicated to flexible memberships would be £9,408 annually.
PlayMoreGolf professionals take on the responsibilities of prospecting, signing up members, and managing renewals, thereby eliminating the need for such roles within the club.
The costs associated with prospecting new members include salaries for staff dedicated to this task, often involving outreach and follow-up activities. Signing up members involves further administrative work, processing applications, and ensuring all necessary documentation is completed.
Renewals are another critical aspect requiring attention and resources. Ensuring members renew their memberships involves administrative tasks, communication, and follow-up. All these tasks require dedicated personnel and incur salary costs.
Effective customer service is essential for maintaining member satisfaction and retention. Managing customer service in-house requires hiring and training staff to handle inquiries, resolve issues, and ensure members receive the support they need. This adds another layer of salary expenses to the club’s budget.
PlayMoreGolf offers comprehensive customer service as part of their membership management package. By outsourcing this function, clubs can eliminate the need for a dedicated customer service team. Furthermore, your club will benefit from PlayMoreGolf’s expertise in handling member inquiries and concerns efficiently.
To better understand the cost-effectiveness of PlayMoreGolf, let’s compare the financial implications of both approaches.
In-House Management
When managing memberships in-house, golf clubs need to invest their own capital in marketing costs and staff salaries without certainty of success. This means the cost of acquisition can increase. And the quoted costs do not factor in existing members renewing or customer service costs. Therefore, the results shown are conservative and carry the risk of increasing costs.
PlayMoreGolf Management
By outsourcing to PlayMoreGolf, clubs can transfer all risk associated with member acquisition, renewal, and customer service to PlayMoreGolf, which charges based on results. This fixed cost structure ensures predictability and efficiency.
Assuming a joiner rate of 3 members per month (36 members annually), the annual cost with PlayMoreGolf would be £2,540.16 inclusive of VAT.
Compared to the in-house approach, which costs £3,960 for marketing. In addition, £9,408 for staff salaries dedicated to flexible memberships. Clubs will incur a total of £13,368 annually. By using PlayMoreGolf, clubs could save up to £10,827.84 annually in cash terms once all taxes are considered of. Marketing alone is £1,440.
Often the response to this conclusion is that these costs can be offset by charging a higher fee for an in-house run scheme and therefore managing in-house is more effective. Having set out the incremental cost of managing an in-house scheme at a rate of 3 new members a month, this equates to an additional £300 in subscription per member to cover costs.
If a PMG membership is £375 per year of which £300 is the membership to the club and the £75 is Flexi points for a member, after acquisition costs using PMG a club receives £220 before receipt of Flexi revenue. This means the club receives upwards of £257.5 per membership of the equivalent of 14% commission. For a club to deliver the equivalent in-house would mean a club has to raise its prices to £520 to be cost effective (a 73% increase in subs £520 from £300) to break even, excluding the fact that a club also receives Flexi revenue.
So, if a club rises its prices to £400 from £375 and takes the scheme in house, on average a club will be on average £120 worse off per membership at a sales rate of 3 memberships per month.
Outsourcing the management of flexible membership categories to PlayMoreGolf offers significant financial advantages compared to traditional in-house management. By leveraging PlayMoreGolf’s expertise, clubs can reduce costs associated with member acquisition, staff salaries for prospecting, sign-up, renewals, and customer service. The fixed success fee of £58.8 plus VAT per member simplifies budgeting and ensures a predictable expense structure.
In conclusion, PlayMoreGolf provides a cost-effective solution for golf clubs seeking to optimize their flexible membership management. By outsourcing to PlayMoreGolf, clubs can focus on enhancing member experiences and improving overall operations, ultimately leading to greater member satisfaction and retention.