Written By Martin Watson – ROAR MEDIA ….
A good friend of mine in the club industry said an interesting thing to me a couple of years ago; He had been talking to the manager of a large venue, promoting the benefits of the product he was representing, which would almost certainly see potential membership growth. The manager listened to his pitch and turned it down, saying that his club didn’t need any more members.
I listened to my friend’s story with a degree of disbelief – surely there must have been a further comment which explained this rather odd statement? But no, his manager had simply said that he thought the club had enough members already, and didn’t need any more. It’s a little like hearing Westpac say that they don’t want any more customers.
As an industry consultant for 25 years, I saw no logic in what my friend’s sales prospect had said, and here’s why: A good sized membership database is the first sign of a healthy club.
Two of the first questions I ask when I sit down with a prospective client, are “how many members the club has and how many poker machines“. Over the years I’ve used an approximate rule of thumb that tells me there should be 100 members for each poker machine on the floor, so that for a club with 250 machines, you’d reasonably expect to find a membership database totaling at least 25,000.
As I said, the foregoing is an approximate measure. The smaller the poker machine installation is, the more I like to see the ratio increase, so that if your club carries 60 pokies on the floor, I’d like to see perhaps 200 members per machine, giving a well padded database of 12,000 members.
Why though? There are many reasons why membership growth is important to a venue but let’s consider a few of them: the more members you have, the more people there are out in your community, who are aware of your club – this is a good thing. Each member is an advocate or salesperson for ‘their’ club, so having ten thousand people out there, talking about your venue, is better than having two thousand, or even six thousand! Word of mouth marketing is the most powerful marketing tool there is. So if each one of those ten thousand speaks to one other person, that’s twenty thousand consumers out there, aware of how great you are!
Then there’s the demographic spread that a larger membership database brings with it. Typically a club database can be divided into gender, age group, ethnicity, work status, marital status, location and any other number of useful segments. If the economic climate is such that it hits one group hard, then you still have other bankable groups using your venue. The more members you have and the greater the diversity, the better you will survive a downturn.
Growing membership also indicates that people are actually aware of your existence. Many clubs I have consulted with over the past couple of decades, take the view that everyone knows they exist. My research with many of these venues then shows that whilst many local residents may know you exist, they don’t know what you do, what you offer, or whether they are entitled to become members – especially so in the case of trade unions clubs, specific ethnic clubs, or clubs with a perceived political affiliation.
That’s the good news, the bad news is that many residents living within your catchment area actually don’t know you exist at all! True. Consider that on average, every year in urban areas, 25% of residents change address. They move within your catchment area, they may move into it, they may move out of it. Growing your membership is all about letting people know you exist, reminding them repeatedly what you do, and ensuring that your offering will appeal to them.
And then there’s renewals. Most clubs see a substantial drop off in membership every year at renewals time. There are many reasons for this, and some are beyond the club’s control, for example, moving away, changed financial circumstances, ageing, change in mobility, change in partnership status, all of which will see these members fail to renew.
However, making an effort to retain members at renewals, makes the job of ongoing membership growth easier. If you are only losing 12% of your members at renewals, rather than 30%, then you have a good base on which to build for the coming year.
Recruiting a new member, shows that your club has engaged with someone new. It also brings the possibility of another consumer who just may turn out to be a club regular, spending a decent sum of money through the year.
About four years ago a client looked at my growth strategy and told me that he was only interested in recruiting big-spending members. I asked him whether, if I brought ten people in off the street, lined them up and asked him to pick the big spenders, he’d be able to do it. His answer was of course, a grudging ‘no’. I then argued that by bringing all ten consumers in as new members, we stood a good chance of scooping the big spenders, as well as those who may start off small, but who may also at some stage become the big spenders he was looking for! If one in every hundred is a big spender, then membership growth will statistically capture more of them, as well as seeing a busier venue, with more members to communicate with.
And that’s an important note to finish on: databases allow you communicate efficiently and directly with the people on them. That’s why every website you visit and every store you go into, wants your information, they want to market direct to you. Databases have an intrinsic value because they allow you to sell to people who are receptive to your messages, because they have already bought-in to the concept of your offering. Growing membership empowers your communications ability to a greater number of receptive consumers.
Give Martin Watson a call on 02 9402 0627 to get him to look at your club’s marketing or check out roarmedia.com.au