How to calculate member lifetime value for a club or paid community

Member lifetime value is annual margin per member divided by annual churn, plus any joining fee. A golf club paying the CMAA median US$8,850 in dues, at the 4.3% median attrition, works out at a 23-year lifetime and about US$180,000 per member. That is too long to trust, so cap the horizon: at 10 years, about US$77,400.

At a glance

• The formula: member lifetime value (LTV) = (annual dues × dues margin + annual in-club spend × spend margin) × expected tenure + joining fee. Expected tenure = 1 ÷ churn rate, capped.
• The trap: at low churn, 1 ÷ churn gives absurd lifetimes. 4.3% annual churn implies 23.3 years. Below 10% churn, the horizon cap you choose sets LTV, not the churn rate.
• The asset: a worked golf club calculation end to end, a churn-to-lifetime threshold table, and the same method applied to a monthly paid community and a business network.
• The spending rule: the First-Year Payback Rule. Pay no more to acquire a member than the margin you expect from them in their first 12 months, unless your own cohort data proves they stay.
• Public inputs used: the Club Management Association of America (CMAA) 2022 Finance and Operations Report, 2021 data from 440 clubs. Every other input is a labelled assumption.

How do I calculate member lifetime value for my club?

To calculate member lifetime value for a club, you need five inputs, and three of them come from your own accounts:

1. Annual dues per member, for one membership category at a time. Mixing junior, social and full members averages away the answer.
2. Dues margin: the share of dues left after the costs that rise with each extra member.
3. Annual in-club spend per member (food, drink, events, pro shop) and the margin on it, which is far lower than on dues.
4. Annual churn: members who left during the year ÷ members at the start of the year.
5. Joining fee actually collected, net of any refund owed when the member leaves.

Then: annual margin per member × expected tenure + joining fee. A club member’s lifetime value is a margin figure, not a revenue figure; using dues revenue overstates it by whatever your costs are.

Worked example: lifetime value of a golf club member

This example uses the CMAA medians for golf and country clubs where they exist and labelled assumptions where they do not. CMAA does not publish per-member clubhouse spend, so we derive a rough figure from its revenue mix: across all responding clubs, dues were 49.5% of operating revenue and food, beverage and social events 24.7%, about half as much. That ratio covers all club types and is an approximation, not a golf measurement.

Initiation fees vary too widely to put a median in the table; our page on what country clubs charge to join lists published fees and the refundable structures that change what a club actually keeps. If your fee is refundable on resale, add only the non-refundable part.

Why does 4.3% churn give a 23-year member lifetime, and should I believe it?

Expected tenure of 1 ÷ churn assumes every member faces the same leaving rate every year, forever. At 4.3% that is 23.3 years, which outlasts most boards, most clubhouse refits and many members’ playing lives. Two things make it unreliable. A median attrition rate from one year (CMAA’s is 2021 data) is not a constant. And new members usually leave faster than long-standing ones, so the average hides a high early exit rate.

The fix is a cohort count from your own records. Take everyone who joined in one year, five or more years ago, and count how many are still members at each anniversary. That curve is your real tenure. Until you have it, cap the horizon. For a club with low churn, the horizon cap you choose decides member lifetime value more than the churn rate does.

How do I calculate lifetime value for a paid community or monthly membership?

For a paid community or business network billed monthly, use monthly churn and monthly margin: lifetime value = monthly margin ÷ monthly churn, capped in months. We use a 36-month cap here. Every input below is an assumption to replace with your own; we know of no public benchmark for community churn with a disclosed method.

The last column uses expected paid months in year one: (1 − (1 − monthly churn)¹²) ÷ monthly churn. At 8% that is 7.9 months, not 12. For how peer groups price and fill seats, see our guide to lead generation for business clubs and masterminds.

How much can I afford to pay to acquire one member?

A club can afford to pay up to the margin a new member returns before the money is needed back. We use the First-Year Payback Rule: pay no more to acquire a member than the margin you expect from that member in their first 12 months, plus any non-refundable joining fee. On the golf example that ceiling is US$7,742 plus the fee; on the US$99 community at 8% churn it is US$704. It is a break-even ceiling, not a budget: our guide to what a US country club can afford to pay per new member uses a stricter planning cap of 10% of a household’s first-year revenue.

The rule is deliberately cautious. Lifetime value tells you a member is worth far more than their first year, but it is a forecast, and the first year is the part you can check within twelve months. Once your own cohort data shows members really do stay, you can pay against two or three years of margin instead. The same ceiling applies to any acquisition price: advertising, a referral reward, a commission, or a fee per booked appointment or per join. Our comparison of lead generation agencies for US business clubs shows how different providers charge, which you can test against your own ceiling.

Five mistakes that inflate a club’s member lifetime value

1. Averaging the tenure of current members. Everyone in the room has stayed; the people who left in year one are not in the sample. This survivorship bias makes tenure look years longer than it is.
2. Using revenue instead of margin. Dues revenue is not what a member is worth; the cost of serving them comes out first.
3. Treating clubhouse spend like dues. Food and drink revenue carries a much thinner margin. In the worked example it adds US$4,416 of revenue but only US$662 of margin.
4. Blending categories. A junior, a social member and a full family member have different dues, churn and spend. Calculate each one separately.
5. Counting refundable joining fees. A fee you must return on resale is a deposit, not lifetime value.

What does calculating member lifetime value yourself cost?

Doing this properly yourself is a one-off project of roughly one to three days for a club with clean records: export join and leave dates by category, count cohorts, pull dues and spend by member from the point-of-sale system, and agree margins with the treasurer. The tooling is a spreadsheet. The hard part is data: many clubs cannot link bar spend to a member number, and leave dates are often recorded as the renewal date rather than the day someone decided to go. Rerun it every year, because one year of churn is a sample, not a law. For what to do with the result, the private members club business model shows how dues and in-club spend split a club’s revenue and contribution.

Frequently asked questions

What is the formula for member lifetime value?

Member lifetime value = annual margin per member × expected tenure in years + any non-refundable joining fee. Expected tenure is 1 ÷ annual churn, capped at a horizon you can defend, such as 10 years. For a monthly membership, use monthly margin and monthly churn instead.

What is a normal churn rate for a golf or country club?

The CMAA 2022 Finance and Operations Report executive summary gives a median member attrition rate of 4.3% for golf and country clubs, 3.3% for city and athletic clubs and 3.7% for yacht clubs, based on 2021 data from 440 responding clubs. It is a single year, so check it against your own leavers.

Should lifetime value use revenue or profit?

Profit, or more precisely contribution margin: revenue minus the costs that rise with each extra member. Using revenue overstates what a member is worth, and it overstates clubhouse spend most, because food and drink margins are much thinner than dues margins.

How long should I cap member lifetime at?

Cap it at the shortest of three things: the period your own cohort records cover, the period before a major capital project or fee change, and 10 years. At low churn the cap decides the answer, so state it next to the result.

How do I calculate lifetime value for a paid online community?

Divide monthly margin per member by monthly churn and cap the result in months. On our labelled assumptions, a US$99-a-month community with 90% margin and 8% monthly churn gives 12.5 months and about US$1,114 per member.