Why ‘Fixed Year’ memberships don’t work

If you are not part of a club which has a fixed year membership, this post won’t be very relevant to you, so you could skip it altogether – but let me first define what this phrase means…….

Fixed year memberships are a feature of UK tennis clubs – I’m not sure about other countries – and it means that the club’s year of membership runs for a fixed period, usually April to April. So if somebody wants to join in September, for example, the club will ‘pro rata’ the cost, meaning they will reduce the cost by the appropriate amount, but that person’s membership will only run until April.

Then, at the start of the new year (April in this case), all members will be prompted to renew for another year at the full price.

For comparison, the alternative is what we’ll call a ‘date of purchase’ membership – this means that each membership will run for a year from the date of purchase. So if somebody joins in September, they would renew in September.

So what is the problem with fixed year memberships?

I think the easiest way to describe the problem is to talk about the reasons clubs have for fixed year memberships, then talk about the problems. So here goes……….

It's a time saver

The idea is that the bulk of renewals are done in one hit, in April. But I see this as a negative. That’s a big job for somebody. I can remember many years ago when my club had fixed year memberships, it took months! Much better for people to join and renew as a steady trickle throughout the year, providing you have good systems like recurring direct debits, which we’ll talk about later.

There is lots of hassle involved, such as changing the membership prices throughout the year, which needs adding to the website and other marketing materials. Someone who joins half way through the year or later has to renew quite soon after that, meaning more admin for the club and the member. Also, that member has to make the decision to renew – why give them that decision earlier than necessary? They may decide that they are short of money, not using the club enough, the weather not good enough etc.

It provides financial security

The majority of the membership income comes in one hit, in April, although of course people can still join on a pro rata basis throughout the year. The idea here is that the club gets a good picture of it’s finances. Again, I don’t think this is the case – in fact, there is more risk – putting all your eggs in one basket. You’re asking your whole membership to make the decision at the same time as to whether they want to renew for another year. What if there is a major change in society, such as a recession or the current cost-of-living crisis? What if 25% of your membership decide not to renew? If memberships are spread throughout the year, there will still be trends where your membership is declining or increasing, but it will happen gradually and you’ll be able to spot it and do something about it.

It is simple for members to understand

A long time ago, when the majority of British tennis clubs had fixed year memberships, this may have been the case. Everyone knew that April was ‘renewals month’. They expected to get notification, they expected to renew. But now that it is not so common, it is not really simple at all. As mentioned above, the club has to come up with a pro rata price, communicate this to the prospective member, process their membership at this price, then communicate with them again in April to renew at the full price.

It seems far more simple for someone to join at the full price and then to understand that their membership will renew 12 months later.

So I believe that most of the benefits of having fixed year memberships don’t exist any more, but there are many negative aspects, such as:

  • Having to adjust the price of membership throughout the year.
  • Increasing the amount of communication needed with prospective members.
  • Increasing the barriers to joining.
  • The increased risk to your membership numbers by having the majority of people renew (or not) at one time.
  • The increased risk to your club’s finances for the same reasons as above.
  • The confusing message to prospective members.
  • The admin load of renewals happening in one big hit.

The alternative - 'date of purchase memberships'

At this point, you may be asking “what about monthly memberships?”. I wrote a Case Study about our tennis club membership systems which goes into lots of detail about introducing monthly memberships, getting our membership online, making our membership automatically recurring (whether annual or monthly). Please read that post – but for now, we are only looking at annual memberships, and your club may have a mix of monthly and annual memberships.

About'date of purchase memberships'

This simply means that any membership runs for a year from the date that it was purchased. And there is not much reason not to do it

Whichever system you use to manage your membership (Clubspark in the case of many British clubs, more advanced systems in some cases), you should be able to set this up. The process would usually involve setting up new categories of membership enabling all new members to join on a ‘date of purchase’ basis. This could happen immediately.

And then, you can usually move your existing members into this new category. the process will differ from system to system, but the principle is the same. Actually, your existing members will still all renew in April, so for a few years, the bulk of your members will still renew in April – but over time, memberships will start to spread out.

A word of warning

Moving to ‘date of purchase membership’ must be combined with introducing effective systems to manage membership – namely automatic, recurring membership. Otherwise it will be a big admin task. My opinion is that there is really no reason not to make all memberships automatically recurring by direct debit, whether they are monthly or annual. So there is very little admin involved. Any decent membership software should make that easy to set up. This is covered in more detail in this post.

Please comment below with any questions or thoughts on this subject. Or Contact Me if you’d like further help.

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