February 1, 2014

Retention Rate Vs. Churn Rate

Simply put, your “retention rate” is the percentage of golfers (members) who commit their loyalty to your golf course by renewing their membership (annual pass, punch card, etc.) and your “churn rate” is the percentage of those golfers who try the membership (annual pass, punch card, etc.) but choose not to renew their commitment to the golf course.

One thing I have learned in the past 30 years of growing businesses is that “numbers never lie”. If your course has a high churn-rate, then you are the proverbial “hamster on a wheel”. As long as you are driving in new business, your course experiences success; but once you run out of gas, lose key personnel, etc. your course’s revenue comes to a grinding halt. This is, of course, why retaining golfers/members is so important.

Another good reason for retaining golfers/members, data proves, it costs on average six (6) times the revenue to acquire a new golfer/member than it does to retain an existing golfer/member.  The challenge for most golf properties is they are already working with a diminishing number of rounds, golfers and/or members. But yet, when presented with the opportunity of drastically increasing membership and/or rounds they find every excuse in the world why it just doesn’t fit their business model. If you are hemorrhaging rounds and golfers, you might want to re-think your business model.

I am amazed when clients say, “Our course can’t service more than X golfers.” The amazement comes because the people normally telling me this are the courses that are losing rounds and golfers/members faster than you can yell…fore.  Sometimes, I think it is just some members of the staff worrying they might have to work harder for the same pay. What they are failing to see is, if the course doesn’t acquire and retain golfers they might not have a job at all. Besides, if they would just think about their happiest times at the course, I am sure it will be when the place was rockin’.

The goal is to have a surplus of golfers/members who affords you the luxury of building the ideal business model. Focus on massively increasing rounds and golfers/members because there is always going to be a churn-rate associated to any business with a membership model, loyalty program, etc. Set your goals a little higher and you just might finally be busy enough to earn a return on your investment; because let’s face it…it would be nice to have to worry about too many rounds for a change.

MMC®, is a performance-based, data-driven golf marketing company that hits ‘em straight.

Thank you for partnering with MMC® in growing the game, your golf course and your golf career.


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