Is free Membership Management Software really free?
We do more than our bit to help sports clubs save money and not pay more than they should for sports club membership software. Whether they’ve chosen to go ahead with Coacha or haven’t decided yet, we always warn them to keep an eye on ‘other’ costs when researching. This is because we’ve found that many software providers aren’t entirely transparent with their fees.
When speaking to new users, they usually tell us which other software they’re trialing alongside Coacha. The software usually ranges from totally (seemingly) free to software with a fixed (or tiered) price. From our experience, after conducting more thorough research, they usually settle on the software that’s paid for; and we wondered why.
So, we’re here to ask the question, 'Is ‘free’ membership management software really free?'.
When it comes down to it, sports clubs are just like any other business; in order to succeed and keep thriving, it’s important to manage budget properly. So, when it comes down to using a free piece of software vs paying for it, choosing the free software is a given…right? Not really…
Whilst there may be some software out there that’s genuinely free to use, with the majority of software that we’ve come across, the word ‘free’ has just been used as a marketing tactic. The surprises then come arrive once you’re on board; additional costs, limited members; you name it, we’ve seen it. Users think they’re signing up to free software, then they end up paying more than they’d first anticipated further down the line.
With paid-for software, most of the time, you know what you’re getting. It completely depends on the type of sports club management software you’re looking at, but with Coacha, transparency is key. And if you find software that isn’t initially transparent about their fees, it’s worth questioning as to why.
This is where most sports club membership software providers make their money. Their software is marked as ‘free to use’, however they’re not. The transaction fees associated with the payment processor they integrate with (such as Stripe) are usually marked up so that the software provider is making money from your club’s transactions. Instead of making one lump sum per month, they’re making a % on every single payment you receive from your members.
Also, in some circumstances, in order to use their software, you have to put your finances through the system as part of a contract.
Many club owners don’t do the math because 3-5% seems like a small number. However, when you actually do the workings out, it can cost you thousands of dollars extra per year.
We believe that there are two types of paid-for software with regards to transaction fees:
• Those that mark up their transaction fees
The paid-for software providers who also mark up their transaction fees are essentially the worst of the lot. Not only are they receiving a set fee every month, but they’re also earning regular income from the fees your members are paying to your club.
• Those that don’t mark up their transaction fees
With software providers such as Coacha, where transaction fees are not marked up and are set at the rate of the payment processor, you’re paying the smallest possible fee per transaction. We’ll always work this way because we believe in giving back to sport. We’ll never penalize you financially due to the amount of members you have.
Many clubs don’t initially want to pay any fees at all. But they soon realize the time Coacha and Stripe saves them each month. Afterwards, they tell us it’s just a small price to pay for the convenience of the system.
In our experience, when compared with ‘free’ software with marked up transaction fees, paid-for software ends up being much cheaper per year. We’ve made some examples which you can find here.
Many ‘free’ pieces of software are cleverly marketed as being free of charge. However, they will often have a tiered structure, so you may need to start paying more as your club grows. This price may be even more expensive than the paid-for software you were initially considering. So now you’re back to square one. Plus, there is usually more than one tier. So, you can expect for your subscription to be bumped up further when your club hits the next milestone. It’s a slippery slope really.
It’s important to look out for tiered pricing structures in paid-for software too. Take note of what you can afford, what the next payment bracket is and how soon you’re likely to get there.
It’s a good idea to find a piece of software like Coacha, which charges one standard, flat rate for unlimited use of its features. You can then be assured that you won’t be penalized for adding members to your club and know what you’re getting yourself into before you go ahead.
Some ‘free’ software providers have more subtle ways of charging your club. These can include setup fees and deposits. Some even insist on putting your finances through their system because they charge an additional transaction fee - this is how they make their money.
We have recently been made aware of one software provider in particular who really have gone to the next level. This provider states that in order to use their software, despite them advertizing as having no setup fees, you must:
• Pay a deposit of the equivalent of 0.5% of your organization’s annual revenue. The deposit is then only refundable when your organization has gone live (on the agreed date) and you have taken 50% of your estimated annual transaction volume. It has to be within 12 months of setup and 90% of the transactions must be put through their system.
• If you’re found not to be using their system (via Paypal/Gocardless plus added fees) for at least 90% of your transactions, your account could be suspended and deleted.
We wish we could have filmed our team’s reaction when these terms were read out to them. We work so incredibly hard to be transparent and give back to sport, that we can’t believe it when we come across costs/terms such as these.
Obviously, it’s important to be wary of these sorts of ‘other’ costs from paid-for software as well. It’s always worth asking the question, ‘Please can you tell me all fees associated with using your software?’.
Whilst doing your research, it’s a good idea to note which software is and isn’t transparent about costs on their website. This will give a good indication of who’s charging more than they should be.
Coacha have always been incredibly transparent about their fees because we have nothing to hide. We charge a set monthly fee which (considering the extensive, unlimited feature-sets included in the subscription) is incredible value for money. There are no other fees which are paid to Coacha. The other fees you pay will be transaction fees to Stripe or purchasing credits with Textlocal in order to integrate with their SMS service.
Ever heard of the saying, ‘you get what you pay for’? Well that’s especially true with software. Free software is all well and good until it doesn’t do what you need it to do. Features may not be as well-executed as they could be; the software may not have everything you need; or it may not be designed for your specific type of club.
You may be under the impression that the software you’re interested in is free, but when it comes down to it, only some features may be. Meaning you may need to spend money on upgrading your package.
Make sure you analyze the software’s features and how well they work for you before going any further.
As we’re sure you’re aware, the world of sports club membership software is incredibly niche. There are so many different types of software our there that it can sometimes take months to narrow down your favorite.
The good thing about using ‘paid for’ software, is that their features tend to be higher quality and therefore fit your needs better.
It’s still important to check for any features that may only be accessible in the higher packages.
Using a system like Coacha is ideal as it can be used for any type of sport/pastime club. It was designed for complete flexibility with whatever type of club you have, so you also know it’s easy to use. Plus, as Coacha charges one set price for completely unlimited access, you can guarantee no ultimatum of paying more to access the crucial features.
So when it comes down to the question of this article, 'is free membership management software really free?', it's really down to the unique software provider and their fees. But you should remember that having no monthly/yearly usage fee doesn't neccessarily mean that the software is free to use. You should consider transaction fees and 'other' costs in comparison with other software before you make a final decision.
If you'd like to try a free trial of Coacha or simply have some questions to ask our team, please be sure to get in touch and we'll be happy to help.