Date: March 22, 2017
Author: Paul Vardy

Membership retention: Look after new members

It is well established that membership subscriptions are the biggest determinant of the financial health of a club.  Food and beverage may be a big revenue earner (and a vital service)  but this income is saddled with cost, leaving minor nett benefit.  Green fee income is an increasing component of income, but in many clubs will remain only in the category of “nice little earner”.   Membership subscriptions are the true performance indicator for a club.

Membership retention and membership acquisition (or recruitment) are the two membership management strategies for all clubs to work on, in order to maintain and improve the health of the club.

The commercial world suggests it is easier to retain a customer than to find a new one and the club world would agree.

In the days when clubs charged sizeable entrance fees, new members contributed to building capital reserves.   For this reason a certain level of churn for a club was quite lucrative.  But the reality is that in the modern era, few clubs demand entrance fees and even fewer clubs have waiting lists.   Rise to the stage “membership retention”; we want to talk about you as today is your day in the sun! 

But how much do we know about membership retention and where does this fit in the overall strategy of our clubs?

Focus on the issue

The results of the Club Health Check tool analysis in mid-2015 showed that of 150 clubs completing the survey to that point,remarkably 33% of clubs didn’t find out why their members left and 39% said they only sometimes found out.  For such an important impact on club financial health, this was surprising.  In defence of clubs, one could argue that in a large number of cases, clubs know that the reasons are uncontrollable.  Members may leave because of old age, health or relocation and clubs may see little need for enquiry. 

Even taking these factors into account, there can be significant numbers of members who leave a club that may have been able to be kept.  When an able bodied member says they just don’t have the time, what they are really saying is that the club does not provide enough value to them to make them stay.  The simple equation goes like this:  Value = Experience – Cost.  The ability of a club to create a great member experience at the right price is a key component the perception of value and success in retention.

It stands to reason that when members leave and can’t be replaced, it is the loss of many potential years of revenue to the club.  It would seem highly beneficial for any club to make the effort to find out why these people leave and put in place programs and products aimed at retaining the “at risk” members.  5-steps-to-follow up-on-resigned-members.

Attrition rates in Australia

The 2014 Golf Participation Report highlighted that the average attrition rate for clubs with fewer than 250 members (approx. 70% of all clubs) was 20.5%.  This suggests that a club needs to replace the equivalent of its entire membership every 5 years.   That requires a lot of work attracting and inducting new members each year in order to maintain numbers.  Clubs with more than1,000 members are at the lower end of the average attrition rate at 6.5%. (approx. 15 years average replacement).

If 70% of our clubs could improve their attrition rate by 5%, the impact could be stabilisation and growth of club membership that could lead to all sorts of possibilities.  

So, what are some retention strategies?

Clubs should seek to establish:
1) a clear sense of  the members who are leaving or at high risk of leaving; and
2) which of these members are leaving for reasons other than old age, health and relocation; and
3) actions within the club’s control to prevent attrition.

Research undertaken by Dr. Heath McDonald in 2010 and published in the Journal of Sport Management can help us understand more about membership attrition.  The study looked closely at churn rates as applied to season ticket holders (STH) of two Australian Football League clubs.

As with golf clubs, football club churn rates for STH often exceeded 20%, putting them in the same category as the volatile consumer goods such as insurance and mobile phone plans.   Dr McDonald was surprised with the findings.   Aren’t football clubs all about team/fan allegiance, tribal loyalty, passion and reflective of the supporter’s core values?  Surely football teams should outdo the consumer goods that could be replaced at will with similar choices.

The study interviewed 4,500 STH between two clubs.  It found that the combination of both new and low attending STH are over five times more likely to churn than long-term STH who were frequent attendees.  This was consistent with research by Ahmad and Buttle (2002) that the largest proportion of customer defections comes from the ranks of the most recent customers.

When segmenting STH purely on their length of membership, the results were profound.

Renewal Rates by Years of Membership – Combined STH’s of two AFL Clubs

 Years as a member







 Did not re-join







Table 1.

The study revealed a 33% churn after the first year which reduced considerably with each passing year of membership until the 4th and 5th years where it stabilised.  (Table 1.)

This revealed the opportunity to see membership in a new light.  The clubs in question saw the need to segment their members based on tenure of membership and create strategies to engage new members and deliver value.   Resources were put into developing a new member nurture program to track the activities of new members, show new members how much the club values them and to listen to their needs.  The results have seen reductions in member attrition in the vulnerable first years of membership.

The findings suggested that if a club can retain a new member for the first 3-4 years, the chances of them leaving reduce significantly to levels of the longer term “rusted on” members. 

Implications for golf clubs

Clubs may do well to undertake their own analysis of member records and find out the correlation between churn rates of members in Y1 to Y4 compared to the members who have been at the club for five years or more.

Any significant deviation may provide a case to allocate greater resources to membership retention efforts to the “high risk” new members.

In the next article we’ll look at the issue of frequency of use (product consumption) and the vital  impact it has on membership retention.

Paul Vardy
Club Support Manager
Golf Australia