Evaluate Membership Models for Your Club

Many traditional athletic clubs are membership-only. A members-only pickleball business model yields certainty of recurring revenue for the club but is generally the wrong price for many customers and does not discriminate between peak and non-peak hours. Some members will use the club a lot and get a consumer surplus. Others will use the club very little. A very profitable membership model may sometimes depend on "breakage," i.e., some members are not using the facility. Generally, membership-only models in pickleball are more common at very high-end clubs that seek to replicate an exclusive country club-like offering and can work in that context. Outside of the high-end country club style model, membership-only models need to find a way to balance the needs of the customers and the club.

Membership models range from on-demand only (no membership) to membership only. The vast majority of clubs will involve a mix of membership, programming, and on-demand bookings. There is no one answer to membership, but the common theme of effective and sustainable programs is that they deliver value to customers and profitability to the club owner. Membership provides club owners with recurring revenues with a high degree of certainty. There is a strong appeal to knowing you have a minimum amount of revenue booked for the month before it even starts. Usually, a club will offer court capacity to members at discounted rates in exchange for that certainty. If you want to charge high membership dues, you must either have excess demand for your capacity, deliver a lot of value to your members, or both.

A simple framework for evaluating membership is comparing all-in savings for members versus non-member rates. The table below shows three oversimplified scenarios (discounted court bookings and no other perks) to illustrate this framework.

When marketing memberships, it is important to define the value to your customers clearly. In Scenario 1 above, the club could market this membership by saying, "Want to play more than six hours of pickleball per month? Save money with a membership!"

It is important for club owners to right-size the number of memberships sold. While selling a lot of memberships is great for recurring revenue, if there is little capacity for those members to use, the members will be disappointed. Capping the number of memberships and creating a waitlist can effectively incentivize membership sign-ups and retention. Members will think twice about canceling if it means they go to the back of the waitlist line.

From a club standpoint, it is important to consider the amount of consumer surplus delivered to members and the opportunity cost of the court time members use. Club owners will generally be willing to offer a discount in exchange for more revenue certainty. Still, they will be particularly willing if the capacity used by members is not likely to be used by non-members. Creating memberships that offer discounts or free play during hours with lower utilization can be a fantastic win-win for customers and clubs alike. Consider using membership to balance demand across different hours and days of the week.

• Early Access to Bookings: Members typically have a longer booking horizon than non-members. This valuable perk should appeal to almost all pickleball club owners because members get to lock in their desired reservation times before non-members, and it doesn't involve a discount.

• Discounted Court Reservations: Members receive a discount on court bookings. In some cases, clubs will offer members free court reservations. We would counsel clubs to think hard about the implications of free reservations. Because a booking usually involves 2-4 players, free reservations can create a free rider problem, with non-members piggybacking on member perks. In addition, if reservations are free, members may reserve many slots they do not use. If offering free reservations, clubs should limit the number of reservations a member can hold at one time. Club owners should also consider limiting the number of free court reservations per month. Offering discounts on court reservations and free open play can effectively manage free rider issues.

• Discounted / Free Open Play: Pickleball is an inherently social sport. If you have the court capacity to offer regular open play, discounted or even free open play can be an excellent perk that delivers value to both the customer and the club. Attending an open play means not having to identify who you will play with in advance. It can also be a great way for customers to meet other like-minded players. Clubs can also create skill-based open plays, where players are bucketed by their DUPR rating, to match players with players of similar skill. Free open play is much less problematic than free court reservations because each participant signs up individually.

• Members Only Events: Creating events that require a membership to attend gives members an exclusive benefit and may encourage non-members to consider membership because they fear missing out.

• Members Only Swag: Similar to events that require membership, special member swag gives members an exclusive benefit that can be highly visible (shirts, hats, sweatshirts) and cause non-members to consider membership for fear of missing out.*

We encourage club owners to consider membership benefits that allow free court reservations, particularly unlimited ones. In addition to the detailed free rider problem, we have seen situations where customers hoard multiple reservations to retain the opportunity to play, effectively removing the capacity that paying customers might otherwise want. If offering free court time, club owners should limit the number of reservations a single customer can hold at any given time and institute penalties for repeat no-shows.