Duncan Bannatyne caused a bit of a furore in his recent book, Riding the Storm, when he claimed that discounting at some of his health clubs had brought in ‘problem members’.
Bannatyne said that dropping the monthly fees from £42 to £29 had devalued the brand and changed the atmosphere at the clubs. “More and more, people are trying it on, trying to sneak in a friend without paying, or making complaints in the hope of getting money back,” he said.
He added that his son-in-law, who’s one of his club managers, thinks his club no longer feels like a Bannatyne and is concerned about what long-time members might think.
However, Bannatyne also said that – although he was concerned that the discount was devaluing the brand – if the company didn’t adopt a strategy of discounting, it faced losing money by losing members or prospects to other clubs. Dropping the price had led to thousands of extra members, he observed.
So is that a trade-off worth making, or do clubs risk losing previously happy members – put off by the change in atmosphere in the club – as fast as they gain their new influx of ‘problem members’?
Isn’t it also unfair on existing members if they have to keep paying the old price? On the other hand, if their fee is also discounted, does the discount lose its marketing impact?
In the current economic climate, discounting can certainly make health clubs affordable to many more people who would greatly appreciate being able to join, and who would be valued members. But is this always the case? Does discounting bring problem members? Does it devalue the brand? Are there rules to follow to make it effective? Or should the industry be looking at different ways to boost membership and ensure existing prices are good value? We ask the experts....