Enhancement Fees vs. Increased Dues
September 20, 2010
Have you heard about enhancement fees? We’ve recently been getting confused calls from clients asking about them. Does our software do it? (YES) Are other clubs doing it? (YES) Do they work? (YES) How come green and yellow make blue? (NO IDEA) Enhancement fees are a hot topic and a dilemma: Do I increase my dues or do I charge an annual enhancement fee? The answer is…
First, let me explain what they are. (And no, it’s not why Bob has a smile on his face). Enhancement fees are annual fees charged to all members specifically to upgrade or enhance the facility.
So, why not just increase dues across the board? First, many members are comfortable with a one-time payment of $36 (for example) rather than a monthly increase of $3. This has become even more so as the number of low cost options in the marketplace increases.
Second, this sudden cash infusion can (and should) be used to improve your facility, buy new equipment, add new classes, etc. In an ideal world, members should see value for their money. And you should promote it. If you get a new treadmill with the money, have your front desk staff mention it to members at check-in. If you add some new weight equipment, put signs around the club.
If you add a new class, introduce the instructor and consider attaching a whole bunch of balloons to them.(Although maybe not. Too many helium balloons and they might get caught in the rafters.)
Third, enhancement fees give you a reason to talk AND ENGAGE your members. Craig Annis from Vanguard Key Club (http://www.vanguardkeyclubs.com/) has it right on. Craig’s clubs are completely unmanned, 24/7 clubs. (He franchises so if you are interested in speaking with him, go to his website). Craig first asks his members to suggest what new equipment they want to see. He then conducts a poll for members to vote on how they should spend the money. Craig smartly engages the member, gives them a sense of ownership, and rather than buying on his personal preference, he ends up with something that is high impact!
So what’s the downside…
The first and most obvious is it could awaken the sleeping giant…aka all the members who forgot they are members. They are more likely to notice a $36 charge than a smaller $3 increase.
Second, YOU WAKE THE SLEEPING GIANT.
Third, some owners have charged the enhancement fee, pocketed the money, and hoped nobody notices. This is a bad practice and be aware, members will often leave from this bad experience. So, the answer is, done correctly can create fantastic goodwill among your members and it’s worth evaluating. Done poorly? Well let’s just say you will need a lot of green and yellow crayons…cuz the results could make you BLUE
Get, Keep, and Know your members with MoSo
September 20th, 2010 2:31 pm