How Shooting Ranges Are Shaping the Shooting Sports Industry with Membership Program Technology
The decision to offer a membership program is easy; what the program will offer the enrollee, how ensure profit gains and how to manage the many components of the membership is not always as apparent. Configured properly and managed with s single software solution, a membership program will have an immediate impact on the income potential of the range. More importantly, a well-executed membership program will foster customer loyalty, and in turn, will generate a constant, predictable revenue stream in an otherwise inconsistent firearms retail environment.
Balancing Incentives and Profitability
Discounting is a typical method to motivate customers to enroll in a membership and is an obvious choice when selecting incentives to build value in a membership offering. Reasonable price discounting will increase appeal in the membership, but taken too far, discounting can be counter-productive, as the gains of additional transactions can be quickly washed away with low profit margins on sold products. When choosing products and discount percentages, it is very important to balance profit concerns against increased traffic and other sales metrics, such as Items Per Transaction, Transaction Count, and Sell Rate.
Having the correct mix of product types that qualify for a discount is not merely a matter of offing everything in the store at a discount. Apparel is a good choice for discounting, as it tends to have high margins and is consistently and reliably available. Conversely, it is advised that items that are subject to availability fluctuations be avoided. As an example, when ammunition was in short supply, shooting ranges who had offered ammo discounts has part of the membership benefit package found themselves unnecessarily discounting the hard-to-get products. In store services can also be included as a qualifying purchase for discounting. Reduced fees for Class/Course enrollment and Gunsmithing services not only provide value for members but will increase visibility in other potential profit centers within your store. Free range use for the member is a standard membership offering and should be adopted but think twice about including ‘free guest passes’ as an incentive. Often, guest passes are used by the member themselves when their membership expires and discourages immediate re-application, lowering retention rates.
Pricing Challenges and Software Solutions
Pricing and billing options should also be considered when assembling membership packages. Clearly, membership pricing decisions must align with shooter demographics and local competitor(s) pricing, though this does NOT necessarily mean you have to undercut another range’s price. Customers will make a buying decision based on value, which is not exclusively based on price alone. Additional services and access to amenities, as well as the overall shooter/shopping experience, may warrant a higher premium in the eyes of a customer. Don’t give away memberships for the sake of having a lower price, you will only manage to put your competitors out of business – right before you go under as well.
Not only does the price influence the sell-ability of a membership, it also has a direct effect on the bottom line. The initiation fees collected from membership enrollees can be realized as ‘pure profit’, though it is more accurate to view money collected from membership sales, in part, as an offset to discounting and costs of operating the range.
If high membership fees are creating buying objections, billing options may be leveraged to alleviate buyers’ reservations to purchasing or upgrading a membership. Allowing enrollees to pay monthly, opposed to annually, will make purchasing a membership much easier for customer. For many, a $25 monthly fee is far more psychologically and financially palatable than a handing over a $300 lump-sum. Though monthly billing/payment options for members will realize a notable increase in enrollment, it should be noted, without the use of software capable of capturing recurring fees, it may not be practical to offer this service.
Delivering Membership Services with Technology
Prior to implementing a membership program, set out to find means of delivering benefits to customers in a predictable and scalable way. Ideally, the Point of Sale software will handle all the aspects of managing the newly created membership program. Member management, dues/fees collection, and discount application will be far easier – and accurate – if executed within a single platform, as opposed to trying to coordinate multiple standalone systems and processes.
Once a final draft of benefits has been reached, be clear in communicating to potential customers exactly what they receive for enrolling in a membership, particularly when multiple tiers are available. Provide in-store and online clients with a thoughtfully designed presentation of the incentives and pricing of each membership level. If comparing each membership level side-by-side proves to be difficult to effectively present, the memberships are too complicated and may need to be reconsidered. Purchasing and enrollment needs to be equally as easy to understand and achieve for customers and should be handled with technology and software.
In today’s market, it is imperative to provide clientele the ability to enroll online, particularly from a smartphone, to reach the broadest base of potential customers.
Simply emulating what other ranges have created for membership programs may due if the only objective is to create a program for the sake of creating a program. However, the me-too method fails to differentiate your range from others and may not align well with your unique product set, available resources, and current software capabilities. From concept to implantation, the process of creating a Membership Program should always be done in a meaningful and intentional way. Don’t leave the success of your membership program – or the future of your business – to chance. Visit Orchid Advisors and Retail Technology Group at SHOT Show 2019, booth # 3117, to learn more about shooting range and membership management.