Why you should run your club like an airline!
“Whether you are running a golf, tennis, bowls, indoor cricket or any other kind of facilities-based club you should be practicing yield management”
Yield management is a concept synonymous with the airlines but what is it exactly?
Simply put, even though every seat in the airplane has a fixed and equal cost (divide the cost of running the airline every month by the number of seats multiplied by the number of flights per month), not every seat has the same value to your customers.
Furthermore, the difference in making a profit or loss is not in filling the seats when the demand is high but rather filling the seats that would otherwise go empty if they were all priced the same.
“Companies who implement Yield Management increase their turnovers by between 3% and 11%, sometimes doubling their profits.”
Airlines do this by promoting the least popular flights at the lowest prices and, critically, unlike hotels, they incentivize early booking allowing the last few seats on an unpopular flight to be maximized rather than given away cheaply.
Every booking time you have for your course, courts or facilities can be thought of in exactly the same way and divided into:
- Peak Periods
- Non-Peak Periods
Ironically, focusing on these non-peak periods will be the key to your financial success as a club.
BUT HOW DO I DO THAT?
It’s easier than you think. You already have a database of clients past and present (or you should have) which you may or may not be communicating with. The question is:
IS THERE A STRATEGY BEHIND YOUR COMMUNICATIONS?
If you already talking to your database – GOOD!
If you are offering them, specials – EVEN BETTER!
But if you are not working to a revenue plan then you are shooting in the dark.
“An effective yield management strategy combined with strong communications and marketing strategy is the difference between the airlines that are household names today and the ones on the pile of failures through the decades”
HOW DO I FIX THIS?
- Divide your booking calendar into as many logical periods as you can.
- Then decide on a pricing strategy for those periods
- You can even have an early bird price for the first bookings and increase the price as that period fills up
Then it’s time to market to your existing customer base by creating a program of regular communication of special offers for off-peak periods and watch your profits start to soar as empty periods become full and your whole club picks up on that atmosphere of always being pumping!
If you would like help getting yield management into place contact us for a free consultation.
If you would like to run a test to see if this really can work for your club check out our Newsletter Special Offer.