Can discounts attract new members?
It’s a question that gets asked a lot at clubs and membership organisations. Should you offer a discount to encourage new people to join?
There are certainly success stories out there. However, reduced fees can cause an admin headache if you don’t have the right solution in place. And let’s not forget the potential loss of revenue when you could have charged the full membership fee.
To help you decide whether offering discounts is the right thing to do at your organisation, we spoke to the members of our Facebook Community Groups to get their thoughts.
How much to discount by
This is the most important aspect of discounting. Too low and it won’t have the desired impact. Too high and you could be damaging your bottom line.
Everyone we spoke to offered discounts as a percentage of the full membership fee, rather than an exact amount. Typically, the discount ranged from 5% to 20%.
Discounting by a percentage is useful if you have a varied fee structure. For example, if you have different fees for different age groups. A percentage discount can remain the same across the board, making it simpler to communicate to potential members.
Types of discounts
There are many types of discounts you could offer, depending on who the recipient is, their profession, or whether they have an existing connection with your club. Let’s look at some in more detail:
This type of discount doesn’t tend to be promoted. Instead, it’s offered at the point of sign-up. For example, Tanya Pinchin Hodgson, Swim Teacher at Felixton College Pool, says: “I give discounts to families with more than one kid, or if the parent asks.”
Another informal discount is reducing or waiving fees for low-income families, although it’s best to do this on a case-by-case basis.
Informal discounts give you the flexibility to offer them when you chose to – you’re not obliged to honour a specific promotion. However, they are less impactful as you’re relying on people already wanting to sign up.
You also run the risk of creating a bad atmosphere at your club if members find out you’ve offered discounts to some people but not others.
NHS / Military
These are common discounts, given to people who work in the armed forces or health service. The percentage off is usually 10–20%.
A discount on membership fees is just one of the rewards you could offer people who volunteer at your club. This type of discount can encourage existing members to become more involved.
Saffron Walden PSG FC offers a volunteer discount. Sharon Heinrich, Club Secretary, explains: “This season, we have offered a 10% discount for players whose parents volunteer at the club (coaches, kit managers, committee, PR etc).”
Discounts for siblings of existing members is very common, but one that provoked the most discussion when we spoke to our Communities.
Many people find sibling discounts to be a good way to increase their membership base. Elena Savastano Thompson, Manager at Gymnastics City says: “It’s great!! Sometimes the parents are only signing their 5-year-old up then notice we have a discount and sign both kids up!”
However, this promotion might not be as straightforward as you think. Paul Hurd, Director at Gymnastic Britannia explains: “The trouble is you’re not able to just say sibling discounts. A lot of families have stepchildren, sometimes foster children etc, so the only way you can do it is by saying children that live at the same address to cover all aspects.”
Commonly used by gymnastics clubs, members who attend multiple sessions – in particular those who are part of a squad – might be offered a sliding scale discount. For example, the more hours / sessions a member attends, the cheaper the unit cost (so if 1 hour costs £20/month, 2 hours would be £35 rather than £40, and so forth).
While this discount strategy is likely to appeal to the member / customer, it’s important to consider the longer-term impact it could have on the profitability of a club’s classes – as the revenue gained from each session would steadily decrease, while outgoings (such as staffing) would remain the same.
Things to consider when offering discounts
Loss of revenue
An obvious downside to offering discounts is that you’re reducing the amount of money coming into your club. This needs careful consideration, especially when the impact of the pandemic and lockdowns are still being felt.
“We used to offer 5% but since COVID we just can’t do it,” says Karen Cheesman, Centre Manager at Faversham Community Gymnastics & Activity Centre.
Kevin Woolcott, Director at Haverhill Gymnastics also agrees that discounts can have a negative impact: “From a financial business model, why would you offer discounts? Most clubs have a waiting list and can fill the places at the going rates… Clubs need to remain viable so offering a service for free would have a financial impact.”
However, Kevin also says if your model supports offering families a discount and it fits your policies, then it’s worthwhile considering it.
Admin and financial planning
When we asked gymnastics club owners what challenges they had when offering sibling discounts, the cost to the club was the biggest concern. However, a close second was the amount of admin required to manage who is paying what.
Emma Baker, Treasurer at Sherwood Oaks Gymnastics Academy, says: “I like the idea but in reality it would make my life really difficult as the person who sorts the fees each month.”
Sibling discounts can also make financial planning difficult if membership is costed per player. Alton Gymnastics Club had this issue. Head Coach and Manager Joanna Claire Foley explains: “We phased out and got rid of [sibling discounts] in 2020 – it was not economically viable to offer and it makes financial planning impossible as you plan for numbers then get siblings so it all gets thrown out.”
Our tips for offering discounts
There’s no straightforward answer as to whether you should offer discounts or not. As Paul at Gymnastic Britannia says: “At the end of the day, you have to look at what costs you have… and make a decision based on your club’s situation.”
However, if discounts are financially viable for you, here are our tips for getting the most out of them:
- Decide what’s more valuable to you right now. For example, is it new members or increased engagement from your existing membership base? If it’s the latter, consider offering a discount that existing members can take advantage of, or offer a discount on membership fees as a reward for volunteering
- Consider using an admin management system like LoveAdmin. Within the platform, you can easily apply and manage different types of discounts, including offer codes. Learn more about the features of LoveAdmin here
- Discounts don’t have to be applied to your membership fees, especially if it will complicate your financial planning. If you have products, services, or on-site facilities like a tea van or café, you could offer discounts here instead
- Run promotions for a limited period of time. It could be seasonal or tied to a particular event. The benefit is that you don’t have to offer a discount all the time. But be aware some potential members may wait until a promotion starts before signing up
If you have any advice or questions about discounts, get in touch on social media or join the conversation in our Facebook Community Groups.
Read more articles like this
Ready for a closer look?
Discover for yourself how LoveAdmin can make your life so much simpler and easier. Just click on the link below to see how we can help move your organisation forward.