Billing
Monthly Dues Members
The most successful clubs put 70 percent or more of their members on monthly billing plans. On average, a person on monthly billing will remain a member for 18 to 24 months compared to paid-in-full members whose renewal rate is only 40 percent! Banks like this for resale value or new capital financing.
Checks or Credit Cards
A key decision: Should we accept all forms of payment or only the most profitable? The monthly billing ratio for most clubs is 65 percent debit/credit card, 35 percent ACH. This stems from the convenience of carrying a card versus a check, and because of reward programs and the ability to easily dispute charges.
Increased credit card usage may simply be the cost of doing business these days. But, remember: individuals are less likely to change checking accounts, saving staff time and effort to get updated credit card information, and saving the club merchant fees.
To prevent loss of your secure data, and possible reputation damage, be sure that you and your billing and software provider are PCI-DSS compliant.
Club-Management Software
Inputting data, tracking statistics and running the billing helps forecast revenue, project cash flow, and grow the dues line.
Know the capabilities of your software and use it to show how many EFT, paid-in-full members, cancels, expires, average dues, tenure, attrition, etc. there are. It should be cost-effective, simple-to-use and able to be fully integrated. Using one vendor to provide software, hardware and billing services, along with follow-up work on delinquent accounts, allows operators to relax and do what they do best, run their club.
House Accounts
Allow members to keep “cash on hand” for products or services. With a house account, they can take it off what they’ve already paid in and the information is stored in the software or captured later via EFT. There are pros and cons for either method, but the bottom line is members will spend more money if it’s easy.
Member Referral Benefit
Offer $5 off a member’s monthly fee for each person they refer who joins. The benefit stays in effect as long as both people keep their membership account in good standing. Club software allows tracking of all referrals and automatically adjusts the EFT. If the referred member leaves, the software will recognize that and adjust accordingly. The reward is an increase in a member’s length of stay.
Employee Time Clock
Stop wasting payroll dollars on someone adding up time cards. Take advantage of your software and assign a scan card to each employee to clock in/out.
Point-of-Sale
Sell and redeem gift cards, packages for personal training, tanning, childcare and/or punch cards. Manage inventory and analyze profit margins. Track all income and services. Generate trainer commission reports, outstanding balances, available sessions, credit availability and deferred revenue (liability) on the prepaid members.
Annual Maintenance Fee
Charge an annual fee and collect it via EFT – typically $20 to $50, depending on average dues and demographics. Use it towards improvements or equipment. Charge it the same month each year, applicable to all members.
Web Joins & Online Purchasing
Utilize your Web site to allow prospects to join online, book court time, lessons, appointments or personal training. It’s a form of marketing that can’t be ignored in today’s marketplace.
Receivables Management
Immediate follow up on returns is key: send a letter out within 24 to 48 hours with follow-up phone calls to recover unpaid dues and capture new billing information. Members who are dealt with properly respond positively and provide the revised information when asked.
Check your billing provider for help managing delinquent accounts. This service should be optional and free. Never pay per-account or activator fees. They may keep the service fee that’s billed to the member and the club gets 100 percent of its dues. If the account is never collected upon, the club pays nothing. This keeps the pressure on the service provider to do their job and recover potentially lost revenue.
Bottom Line
The bottom line – you need the freedom to work on your business as well as in it. Strong, well-developed revenue generators can provide financial stability and the profitability needed to achieve that freedom.
Great article. Having a business, your own business really needs your love and focus to be successful.