A big decision with big advantages

Seasonal or Annual Membership. Which should I choose?

It’s an age-old story for membership organisations whether they should operate with a seasonal or annual membership. Having worked with hundreds of membership organisations, we at GoMembership have seen them all and can offer our insight into why both methods have their benefits and which we believe is the choice of the future.

What is a Seasonal Membership?

A seasonal membership is one that starts and ends on a selected date. This is a very common membership in the sports industry because sport tends to be a seasonal activity and the playing season is aligned to the membership duration.

Seasonal Membership Advantages

  • This has the natural benefit that your members will know when the season starts, especially the competitive members who will be sure to purchase their membership in time for competition.

  • Having a set date for renewals also provides the financial benefit of expecting your revenue to arrive at a certain point of the year. This can help you internally to plan your budgets for the upcoming year, most importantly knowing the minimum amount of monies available through to the next season.

  • Psychologically members are likely to be looking forward to the new season and therefore be very happy to pay the annual fees in anticipation.

  • Our final key benefit to note, particularly to the member is that you can offer a pro-rata on the price of the membership. If the member is only buying it for 3 months, you have the option to only charge for 3 months.

Seasonal Membership Disadvantages

  • It may come as a surprise that there are actually a number of disadvantages to seasonal memberships, some of which you may not have considered.

  • A seasonal membership that aligns to a competition season can actually ignite negative emotions from a member. It creates a perception that the member ‘must have’ the membership in order to enjoy their sport, rather than the will of the member to ‘want’ the membership.

  • Seasonal memberships can also be quite inconvenient for a member. For example, a member who joins the season late and is not offered a pro-rata price on the membership may form the opinion that they are paying more for less, an opinion that nobody wants their customers to have.

  • Further, where a season is aligned to year end, you may face the challenge of the Christmas overspend! Many members may be reluctant to re-buy a membership directly after the costly Christmas period. This may be helped however with early membership renewal reminders encouraging the member to renew before they splash out on all the Christmas presents.

  • The final disadvantage we’ll raise is that a seasonal membership is more complicated to setup and understand than an annual membership. A seasonal membership may require a range of rules to accommodate start and end dates, pro-rata discounts and renewal windows, it may also have an impact on insurance when members renew late.

What is an Annual Membership?

An annual membership is one that starts on the date of purchase and lasts for the full year regardless of when it is purchased. This type of membership, from what we have seen, is becoming more common in the sports industry and is certainly the most popular amongst our non-sporting customers.

Annual Membership Advantages

  • The annual membership has the benefit of simplicity, it starts from the moment it is purchased and ends in a years’ time. There is no need for any discounting (unless you’re having a sale), no confusion around the benefits that come with the membership and from the sporting context, the member can purchase it at the most convenient time for them and be safe in the knowledge they will be covered by any insurance that comes with it for the entire season.

  • An annual membership also makes it easy to add value to your membership each year by introducing new and improved benefits. These can clearly ‘kick-in’ following the annual renewal, removing any confusion around what the member is entitled to and when. 

Annual Membership Disadvantages

  • The biggest disadvantage to an annual membership comes if you are converting from an existing seasonal membership setup. You as an organisation, may be used to receiving your revenue at a particular time of year and an annual membership could encourage this to become spread wider across the year.

  • You may also need to adapt the way you report on your membership numbers as you may currently be expecting the bulk of renewals at the start of the season, which may not be the case with an annual membership.

So, who wins?

Fortunately, GoMembership is well equipped to deal with both the seasonal and annual membership types. We have many customers successfully using both methods and we will continue to see membership organisations selecting each method for their own reasons.

We believe that simplicity should always win. Keeping a membership as simple to understand as possible will make it easier for your members to understand and increase the chance of retaining them year on year.

The final thought

No matter which method you choose, if you are a multi-teared organisation, you must consider the consequences for all parties. If, as a National Governing Organisation, you have a seasonal membership and all the clubs affiliated to you have an annual membership, there will be a misalignment in membership dates and members may have to make several transactions throughout the year to be retained as a member.

If you are able to align yourself with the clubs and with the Regions/States/Counties then you will be able to take maximum benefit from the integrated approach GoMembership offers. This allows the member to make a single transaction to cover all membership types for the same duration. They can even take it a step further and pay by subscription, meaning their membership will auto-renew each year without them having to lift a finger. A quick win when it comes to member retention!

 

Written by Owain Fitzsimmons, Head of Marketing at GoMembership.

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