Joakim Sabel is the CEO and part owner of Svenska TopTee AB in Sweden which operates four golf clubs. At TopTee he has introduced age structured pricing extending up to 35 years old with considerable success. He explained the details to Glyn Pritchard.
Sabel started in golf as a caddie and then turned pro with four years as a tournament professional, before becoming the head pro for Stockholm Golf Club from 1993 to 1999. In 2000 he co-founded TopTee with Mats Gabrielsson and Olle Reimers.
The TopTee group has about 8,000 members at its four clubs: Brollsta Golf, Stockholm, 27 holes, opened in 2001; Strandtorp GC, Halmstad, nine holes, opened in 2003; International GC, Stockholm, 18 holes opened in 2006; and Kungsangen Golf & Country Club, 36 holes, opened in 1993 and bought by TopTee in 2010.
Nearly a third of TopTee’s membership is now under 30, but at one point there were less than 100 members in their twenties as Sabel explains. “In Sweden your parents pay for your golf membership up until you’re 21 and then you’re expected to pay for yourself. Of course this is the age when you start to incur the major expenses in life for necessities like an apartment, a car and education fees, so golf gets cut. We needed a strategy to reverse that trend and keep the twenty-somethings involved with golf.”
Sabel decided to take a radical step to keep the young adults as members. “We halved the membership fee for that group, in fact it’s almost a third of our top Diamond membership package.” The under thirties now pay 3,000 Swedish Krona (SEK) a year (about £234) which entitles them to play on all four courses in the group. The only restriction is that they cannot play Kungsangen on weekends before 2.00pm.
The strategy paid-off as Sabel confirms. “There was a lot of ‘word-of-mouth’ interest and we also approached large companies that had a young workforce profile with the new offer. We also got a lot of internet and social media discussion going. As a result in the first year we got 1,000 memberships in the new category which we called ‘3,000 under 30’.”
In fact the scheme has been so successful that Sabel has extended the idea to the 30 up to 35 age bracket. “This year we have introduced a SEK 4,000 membership rate for this group, once again to keep them in the game. This is the age group that are rising in their careers and want to use golf for business as well as personal reasons. That means they are drawing in guests with green fee revenue. After that, I think at 35 you have either got a confirmed interest in golf and an income to support a full membership, or you don’t and never will.”
Sabel is not concerned about competitors copying the idea. “The point is that people who drop-out of golf when they enter adulthood are lost to the game anyway, so it’s better that we all try to keep them involved with golf until they are earning their full career potential. We’ve already held onto 1,000 that would probably have stopped playing with many never returning to golf. As it is the ones we have held onto are spending in the bars and restaurants, buying stuff from the pro shop and bringing friends who pay guest fees.”
Focusing on juniors is senseless says Sabel unless you can keep them in the game. “There’s not much point in investing in juniors if you lose them when they’re 22. Then you’re in a situation when they return to golf as virtual beginners when they’re 45 to 50, so you have lost over 20 years of potential revenue from these individuals.”
There has been a limited amount of negative reaction from older members who are paying full annual fees, Sabel admits. “What we say to them is that if we don’t generate some income from the younger age groups, your fees will have to go up. If you don’t want higher fees, we need more members!”
Could age structured pricing work in Britain? “I don’t see why not. The economics are similar. I think it’s a ridiculous idea that you pay next to nothing when you’re a junior one minute and then you pay as much as a man or woman who has reached the peak of their career, just as you are starting out in life and have all these huge expenses and very little income.”
Leaderboard takes a lead in structured pricing
One UK golf group already offering structured membership pricing for young adults is Leaderboard. Dale Hill Hotel & Golf Club in East Sussex is part of the Leaderboard group and Carl Rundgren, the general manager at Dale Hill explains the thinking behind the pricing scheme.
“We provide a pathway for the teenage players that encourages them through affordability. Juniors up to the age of 19 are free now if they know or are related to a member. We have then introduced three categories of intermediate membership up to the age of 34. They progress from free junior to intermediate category one, paying a reduced membership fee of £300 until they are 25. Then they pay £600 until they are 29 as intermediate two players progressing to intermediate three and paying £900 until they are 34. We then offer them a flex-membership or a full membership with all the facilities.
“That pathway means that they don’t have to jump from junior to full member. And that makes it affordable because you’re not going from very little cost or free to £1,400 with nothing in between. That pathway keeps the juniors with us in the club through early adulthood.”