Michael Swan: Let your members pay by direct debit
15th November, 2011 by Alistair Dunsmuir
Michael Swan, the head of Direct Debit Management Services at Premium Credit, told GCMA delegates that they cannot ignore the financial trauma that is sweeping Europe and has hit other parts of the world.
“One effect of the economic situation is that it has completely changed the buying behaviour of typical golf club members, along with all other types of consumers,” he said.
“You cannot rely on customers anymore to keep spending their money on your product. Buyers are more discriminatory today than they have ever been before – to the extent that they are prepared to abandon a product completely if they find what they perceive to be a better alternative.”
Mr Swan pointed out that golf clubs need not just be concerned about other golf clubs taking their market share – but other industries taking it as well. “When I worked for the drinks trade in the 1990s in the USA we found market trends showing that the trade was spending less and less every year on certain alcoholic beverages,” he said. “And when we analysed our competitors we discovered they were having the same results. It turned out that consumers were buying our drinks less due to the rise in the cafe culture.
“It’s a pertinent message for golf today – loyalty is fickle and you, as golf club managers, have to think about what you can do to attract members.”
For Mr Swan, one way to recruit and retain members is to reduce the barriers to entry of a club, in particular by providing flexible finance options so that they can pay by monthly direct debit rather than in one annual lump sum.
Swan’s organisation, Premium Credit, owns the Fairway Credit brand, a finance facility that enables golf club members to pay subscriptions by direct debit instalments while the club receives full payment of the subscriptions up front, which is used by hundreds of golf clubs in the UK and Ireland.
The service, which is free to clubs that receive 100 per cent of the fees at the outset, enables clubs to maintain cash flow and minimise the administration burden when collecting fees.
“The way it works is easy,” said Mr Swan. “The member completes and signs an application form, including the direct debit instruction. The form is returned to the club for authorisation and onward transmission, and we then conduct a credit assessment. If it’s approved, we set the agreement up and send it, along with confirmation of when the first payment will be collected as well as payment schedule details, to the member to sign. No further agreements need to be signed by your renewing members – any new subs are notified to us by using your Fee Plan Online and we write to all members to advise them of the new payment schedules in advance of the first collection.
“We also provide the flexibility so that you can choose the payment option that is most appropriate for your members, and our business managers provide dedicated support throughout.”
Mr Swan added that there are considerable advantages for managers to use this. “Collecting the money in-house can be a huge admin burden as well as inefficient. Plus you need to be proactive in managing problem payers.
“This is not necessary with Fairway Credit, which reduces the time you will need to spend on this topic, and removes the compliance burden on your club. Plus every golf club that uses Fairway Credit earns commission, which can be increased by deferring settlement. As well as the convenience of paying by direct debit and the fact that it is a cost effective way to spread costs, this facility could also benefit new members to your club, as it allows them to reduce the financial impact of a large joining fee.”
After his speech, Mr Swan presented a cheque for £5,000 to John Dinsdale, captain of the GCMA, to invest in the GCMA’s new, interactive website, as part of the company’s sponsorship of the association. “This is a very welcome investment,” said Mr Dinsdale. “The GCMA is most grateful.”
