However, one task that managers should not worry about is membership renewals. Each year, many golf managers must invest a lot of resources to maintain existing memberships, as they often expire during this period. Every time the season ends, you run the risk of losing your most loyal customers. To combat this decline in membership, management must invest in campaigns that monopolize resources that could instead be devoted to acquiring new members, managing operations, training staff or optimizing sales.
That’s why automatic membership renewal can help you and, ideally, should be included in your modern golf club management software. When your memberships renew automatically, you make a tedious and costly task easier, allowing you to focus your efforts on strategies to grow your membership, not renewing existing members.
It's not about trapping inattentive customers.
From the outset, make it clear to your customers that auto-renewal is not about taking advantage of their forgetfulness. Customers should have the ability to opt out at any time they want. The goal is not to charge customers for a service they don’t want. The real benefits of auto-renewal are in the time savings and reduced retention costs and expected lifetime value.
Why is automatic renewal so interesting?
For your business, each customer has a calculable lifetime value. A rough qatar cell phone number estimate of your members’ lifetime value can be calculated by dividing the average annual revenue per member (AARM) by the subscription cancellation rate per year.
For example, let's say your average membership is worth $2,000 per year and the average percentage of players who churn each year is 3%. In this case, the lifetime value of a customer is $2,000/0.03 or about $67,000. So every time you sign a new member, you've just generated about $67,000.
Calculating the lifetime value of a non-member golfer is more difficult than calculating the lifetime value of a member because they don’t pay a fixed amount each year. However, tracking customer profiles and therefore their activity on your point of sale and tee sheet can help determine the average annual revenue you earn from public players. Customer lifetime value is intrinsically linked to the value of your business because the sum of all customer lifetime values equals the amount of revenue your business can expect to earn over its lifetime.
Increase lifetime value by focusing on your churn rate
If your member lifetime value is tied to your business value, you can increase this ratio by reducing churn without increasing membership fees.
In fact, in some cases, you may be able to increase the value of your business by offering lower membership rates, if it helps lower your subscription cancellation rate. Offering a discount to customers who opt in for auto-renewal is one example of a practice that can increase your revenue in the long run.
Reduce the cost of retaining your member base
Automatic membership renewal significantly reduces the time managers have to spend on member retention because they can focus on acquisition rather than retention. You don’t need to hire an entire sales team to make calls to renew all of your memberships.
Instead, have your team focus on the 25 customers who are at risk of churn while automatically renewing your top 25 customers in parallel.
Key points
As you can see, automatic renewal makes your life easier as a golf club manager. Instead of wasting your efforts on renewal calls, you will be able to focus on increasing the number of subscriptions to your golf course.