Not-So-Rude Initiations

Some tasteful approaches to setting and selling dues and fees, without hitting members and guests between the eyes.

by Joe Barks (editor@clubandresortbusiness.com)
November 2006
 

Summing It Up • Club managers often have difficulty being direct about dues and fees because it goes against their hospitality training for making members and guests comfortable. • More clubs are finding that offering a package of options can help soften the sell and yield better insights into what does, and doesn’t, make membership attractive. • Trial memberships and refund availability can also help in getting people to test the waters. • Guard against the mindset that perceives dues to be a higher barrier than they may actually be.

There are certainly plenty of parents with well-beyond-college-age children who might disagree, but eventually, most adults hit a point in their life where they find asking for money unpleasant. Similarly, managers in a service industry like hospitality—where the focus is on member and guest comfort—may be hesitant to bring up the subject of dues and fees, either when they have to be presented, sold and assessed for the first time, or when they must be increased.

Even in the most privileged club environments, where money is literally no object to many members, some managers step around the need to communicate about rates and prices like they’ve been dropped from a tray in the dining room. They either try to hide or obscure what’s being charged, or frame everything in an apologetic tone. In all cases, they only end up shortchanging themselves, and their properties, by earning less buy-in and generating negative reactions.

There are some techniques, though, that can help make it easier to broach, and sell, the subject. If you’re not a “Here’s what it’s gonna cost ya, take it or leave it” type, see if these approaches might help when it comes time to ask for the check:

• Run the Options. Presenting people with choices is one of the best ways to soften the appearance of a hard sell. More properties are choosing to go the “column A or column B” route, offering packages with different services and fees. Presented properly, this approach can be used as a way to conduct “focus groups in progress” and on-the-spot market research to help determine what’s really attractive to potential members. Offering a package of options can also make it easier to follow up with those prospects who come to look at your property, but don’t end up joining. Recontacting them about their decision can be used as an opportunity to go over the various choices that were presented to them, to help you gain insight into what they find most (and least) attractive about your dues and rates structures. And in this way, you can gently probe into what it might take to get them to sign up.

• Put It to a Test. Whether they’re called trial, temporary, seasonal or guest memberships, they continue to gain favor as a good way to encourage potential members to test the waters without too much trauma about getting soaked. Even private clubs have found they have more latitude to offer these trials than is often thought. Some of these trials are being offered as special seasonal memberships for a flat fee over an entire three- or six-month period. Others are structured as dues paid on a month-to-month basis with a limit on how long the trial can be extended. One thing to be sensitive about when going this route, however, is a possible backlash from existing members who may resent the “deals” that the “interlopers” are getting.

• Provide a Safety Net. Programs have been devised with money-back guarantees and contingency clauses that can give new members an opportunity to change their minds and receive full or partial refunds if they prefer. In some cases, these arrangements involve waiting periods where the refunds will only be generated after enough other new members join—an approach that can actually help you add some very motivated “salespeople” to your marketing team. There is also initiation-fee insurance that clubs can take out for themselves (see “Or Your Money Back...” C&RB, January 2006, p. 12), to help provide assurance to prospective members who are afraid to make a commitment because of the possibility of moving or being transferred.

• Pump Up the Value. Before looking at any of these options, however, clubs are cautioned against selling themselves short. There is still a school of thought that programs of these types cheapen your offer. Club consultants say that many clubs and resorts need to confront an “intellectual obstacle” when it comes to dues and fees, to overcome the mindset that the cash outlay will be more of a barrier than it really is. Remember, the higher the fee you can collect—in the form of the upfront initiation fee in particular—the deeper the commitment will be from the members who do decide to take the plunge. After all, the best clubs with the strongest membership figures, not to mention the longest waiting lists, are usually in that situation for a reason.