Alternatives to the ever-unpopular club food & beverage minimum.
Membership has its privileges… plus a food and beverage minimum! On top of initiation fees, dues, capital assessments, operating assessments, and a plethora of “pay-to-play” fees, members are often required to spend or prepay a specified amount of money to support the exclusive dining scene at their club. Typically clubs charge, minimums per quarter or bi-annually. The amount can range from $50/week to $1500/year or more.
Would you say food and beverage minimums “encourage” or “force” greater member engagement and usage?
Is the F&B minimum viewed as a “price of exclusivity” or is it viewed as an “unpleasant tax” on membership?
Does the F&B minimum create a stronger “sense of community,” or does it “create animosity”?
Do F&B minimums foster the mindset that there are “dining members” and there are “non-dining members” at your club (those that meet their minimum and those that do not)?
The fact that we can look at F&B minimums in both a positive and negative light is a problem. From the management side F&B minimums are a positive, they create additional income. From the membership side F&B minimums are a negative; causing complaints, criticism, devaluation, forced usage, and even stress.
There must be a better way…
Consider this: Estimates suggest more than 50% of private club membership rosters include “at risk” members. These are members that are not very satisfied with their club. Each may have their individual reason for dissatisfaction; cannot get court time, do not have a locker, service is subpar, the bar does not stock their favorite wine or spirit, the dress code is a hassle, the parking lot is overcrowded, the food is haphazard…
Unbelievably, many “at risk” members are just looking for a reason to continue to complain. Or worse, looking for a reason to quit the club. Food & beverage minimums add insult to injury. They are a recurring source of dissatisfaction for many members, and you really need to consider changing the way you implement this unpopular member tax.
F&B minimums have been around for a long time, and your club, if it uses this subsidy technique will find it hard to wean itself off this “easy” money. However, considering how the club industry has changed; how the consumer has changed; how the business world has changed; and how the economy has changed, you should consider implementing a positive change at your club as well.
You have two options, move quickly, or migrate slowly away from the bad policy of F&B minimums. I am happy to explore both options with you more thoroughly so please do not hesitate to contact me so we can review how to best proceed. Remember, with F&B minimums the income you generate comes at the customers’ expense and drains value out of the membership experience/relationship. The worst part… it is a recurring negative in the members’ mind as they are confronted with it monthly, quarterly, or semi-annually. A continual source of member irritation, “Did I meet my minimum, or did I lose it?”
Causes of Member Dissatisfaction
Whenever a club saves money by delivering a bad customer experience
When a member feels mistreated, ignored, or coerced
When a club derives income from not providing a utilized or wanted service
Solutions to Member Dissatisfaction
Generate revenue from dues and your club’s core service/amenity usage fees
Add new service and amenity offerings that can increase revenue (ex. Private-VIP- Travel Club)
Stimulate and incentivize usage via member rewards (ex. Private-VIP- Loyalty & Rewards)
Implement member friendly fees and payment structures such as, a hospitality premium, annual spending contests, and capital improvement savings funds
In conclusion, I highly recommend you stop generating club revenue via member dissatisfaction techniques. Invest in member friendly strategies that will be more financially beneficial to your club and help make happy, satisfied members.
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About the Author: Eric Ruehlmann is a versatile business executive with over 25 years of service in the club management industry. Eric's knowledge and experience is broad having held advisory positions and worked on projects in a variety of fields such as; consumer research, loyalty & rewards, travel & leisure, and lifestyle products & services. Eric is currently focused on sharing his knowledge about travel clubs, and loyalty & reward programs with club managers and club board members. Eric Ruehlmann is the founder of Build A Better Club and a managing partner of Privat-VIP- Travel & Rewards.
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