Assignment Title: Private Membership Clubs

Course Title: Marketing – the Essentials and the

Professor: Carsten Buhl

Student Name

Student ID: S148479

The traditional, aristocratic pomp of private members’ clubs has seen a transformation over

the times, being replaced by a societal interest in high-tech spaces, modern architecture, and

give-and-take events for individuals to socialize and expand their network (Thomas, 2012).

New clubs no longer exclude people based on social status, ethnic background, or gender, but

will nonetheless keep their clientele exclusive by fixing expensive membership fees or

requesting a current member’s recommendation to join. Soho House, having first opened in

1995 in London, perfectly fits this mold, being a stylish, trendy hub that manages to remain

as exclusive as ever, all the while taking pride in providing an inclusive space of relaxation

and retreat for all likeminded individuals working in the creative industries. Indeed, the Soho

House website explains: “Unlike other members’ clubs, which often focus on wealth and

status, we aim to assemble communities of members that have something in common:

namely, a creative soul” (Burton, 2017). Soho House has also recently chosen to open a

venue in Copenhagen; as Nick Jones, founder of Soho House claims, “We look forward to

welcoming the interesting, talented and friendly people from the city’s creative scene to our

global membership” (Ritchie, 2022). The expansion of Soho House into Copenhagen has

proven to be purely strategic, as Denmark ranks 5 th in the Global Creativity Index with a high

score of 0.917 (Statista, 2015), but raises the question on what the target group of the club is

here in Copenhagen, and whether such a launch will be a success.

By segmenting, targeting and positioning (STP) itself onto the Danish market, Soho House

can easily establish what its target group is. Soho House stresses that its members are at the

heart of their operations (Soho House, 2022), which makes it a B2C company, as the

consumer always comes first. Besides from the evident geographic segmentation that would

be to position itself in Copenhagen, Soho House should focus on three other B2C

segmentation types: demographic, psychographic and behavioral. In terms of demographics,

‘Generation Z’ (aged below 25) and ‘Millennials’ (aged between 26 and 41). These two

categories represent Soho House’s fastest-growing demographic, underlining that the average

age of the club’s membership is gradually getting younger (Membership Collective Group

Inc, 2021). Soho House is after professionals working in arts-and media-related spheres; and

thankfully the club has a strong chance of targeting the right audience here in Copenhagen

and beyond, as in 2019, approximately 125,300 people were employed in the cultural sector

in Denmark (Statista, 2021); 3,179 of those having been educated at institutions in

Copenhagen (Statistics Denmark, 2019). Bearing in mind that Soho House’s membership

prices are rather hefty, an overview of the incomes of the target audience is necessary:

statistics show that chief executives, senior officials and legislators is the occupational group

in Denmark with the highest average monthly salaries, earning 106,000 DKK per month on

average in 2020. By comparison, the average monthly earnings of cultural professionals are

at approximately 49,931 DKK (Statista, 2020), raising concerns on whether the target

audience truly has the adequate disposable income to budget Soho House’s membership fees.

As for the psychographic segmentation, Soho House is targeting individuals that prioritize a

return to community in a post-pandemic society (Nordstrom, 2022), as well as being in a

space where they can “connect, grow, have fun, and make an impact” (Soho House, 2022).

By merely prioritizing members in the same age bracket and in similar professions whilst

launching in Copenhagen, Soho House will be able to respond to the psychographic needs of

its target group by guaranteeing an environment for them to mix with like-minded people of

similar interests. Finally, behavioral segmentation may prove to be the most important

strategy for Soho House to tackle as it launches in Copenhagen, especially in the context of

digitalization, as in 2020, Danes between the ages of 16 and 39 were the most active social

media users in the country (Statista, 2020). Indeed, Soho House must acknowledge that e-
advertising could be its strongest form of marketing in Denmark due to the accessibility and

convenience of social media amongst its target group.

When it comes to targeting, Soho House needs to establish a SWOT analysis of the

Copenhagen market. The internal strengths of the club are diverse, mainly being its

“exceptionally high service standards” and “strength of the brand and culture of creativity

and innovation” (Membership Collective Group, 2021), however various internal weaknesses

prevail too: Soho House seemingly has a reputation of failing to internally control its

financial reporting, as well as not keeping up to date with the digital boom, which could

majorly damage its reputation. Regarding the opportunities of the club, its first-mover

advantage launching into Denmark by already being an established institution, the tourist

attraction to Copenhagen, and its increasing follower count on Instagram, being currently at

over 1,000,000 are the most pivotal — nonetheless, Soho House’s core threats, such the rise

in the sustainability awareness of the customers, Denmark’s lack of local awareness in the

brand, and the potential of Soho House’s operating costs being higher than its membership

revenues, could be rather damaging to the organization.

The final step of the STP process is positioning. In order to strategically position itself and

target the right audience, Soho House must differentiate itself from its local rivals and appeal

to the local clientele. The club has already achieved this by adopting a somewhat ‘glocal’

strategy — all the while maintaining the exclusivity of the brand, Soho House Copenhagen is

set to be a reflection of the city in which it will be opening; the interior design is inspired by

the likes of Arne Jacobsen as it is said to be “furnished with Danish vintage pieces, specially

commissioned pieces from local Danish artists, and fabrics and materials from local

suppliers” (Business Wire, 2022). Wokeness and emphasis on fun also provide a unique

selling point, opposing to its local rival TheSocialHouse for example, a Copenhagen-based

members club that takes pride in granting a no-nonsense business environment for its clients
(TheSocialHouse, 2022). On another note, Denmark is the 5 th most attractive country in

Europe for digital agency professionals (Statista, 2021), showcasing the potential for Soho

House to adopt more digital marketing strategies. The club can do this by using digital

communication technologies such as databases, personalized website messages, chatbots,

customer services and so on to maximize its sales to existing customers and encourage the

continued usage of its online services, such as its newly-launched app, SH.APP (Sitecore,

2022), where members and non-members can connect with each other, accessing video

content and podcasts related to the brand. Indeed, a large chunk of Soho House’s target group

represent the 97% of households in Copenhagen that have access to the internet (Statistics

Denmark, 2021), further heightening the importance of other forms of e-marketing such as

direct mailing, introducing an online club newsletter, maintaining a strong presence on social

media platforms, and increasing online adverts (Private Club Marketing, 2022).

All in all, it would seem like Soho House’s target group in Copenhagen would be young

professionals, specifically in the 21-41 age range that work in the creative industries and that

have the willingness to contribute a part of their disposable income to finance the

membership fees that Soho House requires. The best bet to fully catch the attention of this

customer segment is through e-marketing and maintaining a heavy presence on all social

media platforms. Despite not having opened yet, Soho House Copenhagen already has 910

followers on its Instagram account, and the club has strategically provided two short videos

on the platform that explain the process to which a person can apply for a membership, as

well as the different membership types. This engenders transparent communication with the

consumer across all channels, and an overall speedier process at responding to the needs of

the clientele.
Question 2:

Soho House has already established a broad pricing scheme which varies depending on a

multitude of factors. There are two types of Soho House membership: access to one location,

or access to all the club’s sites around the world. Offering members reciprocal arrangements

with other Soho Houses in different locations is another excellent strategy to boost revenue,

heightening memberships as new members will feel encouraged to visit the other venues

(Ray, n.d.). For Soho House Copenhagen, the monthly membership rate is currently at 875

DKK, thus 10,500 DKK a year, and for access to every house across the world, the

membership is at 1,541.67 DKK a month, thus 18,500 DKK a year. One of the most essential

pricing strategies for Soho House would be to find methods to increase the number of people

willing to pay for the services that the club provides, and Soho House has gone out of its way

to introduce cheaper membership fee alternatives in order to appeal to a wider range of

customers. The “U27” membership, for instance, is a direct response to acknowledge the

potential of a younger audience, as all members aged 27 and below are able to pay a less

costly membership fee up until their 30th birthday: indeed, members of Soho House

Copenhagen in the “U27” category would only have to pay 333.33 DKK a month, a

staggering 62% decrease from the monthly membership fee paid members beyond that age

range. Those under 27 that would wish to have access to all houses would merely have to pay

708.33 DKK a month, which is still approximately 20% cheaper than what members over the

age of 27 would have to pay just to become a member of their local house (Soho House,

2022). The “U27” scheme is somewhat perfect, as it’s a way of signaling to newbies that

there is a benefit that is available only to them, and that they are getting a particularly good

value for making a purchase decision based on this limited supply. Another efficient pricing

strategy for Soho House would be to open its doors to non-members. Alas, the club has

implemented this strategy by introducing the ‘Soho Friends’ membership, a non-equity

discounted price of only 111.58 DKK a month, thus 1,041.44 DKK a year (Soho House,

2022). the latter is a very worthy method for the club to generate a higher profit, simply

because long waiting lists and high fees could otherwise keep potential clients from joining

the club and taking advantage of the additional sources of revenue within the venue such as

the bar, restaurant and spa (Ray, n.d.). Overall, Soho House’s membership prices are

relatively affordable for its new members, which is a worthy strategy to attract a younger

crowd but also to make more money, but these cheap fees raise alarms on how the club will

manage to reach a breakeven point, let alone a profit. Lowering initiation fees and loosening

admission requirements will lead to current members to question whether the club’s mission

is still to remain exclusive and high-end as when they initially joined — this heightens the

risk of alienating even more clients and the potential for complaints. But if there ever was a

time to encourage open, honest, and easy communication with its members in the wake of the

digital age, now would be the time.

Soho House takes pride in its exclusive private club business model — which essentially is

achieved by granting access to a limited supply which is in high demand among affluent

consumers, and can be obtained thanks to a subscription basis, the latter being put in place as

a strategy to channel customer loyalty (Exit Advisory Group, 2022). But the misfortune of

this pricing strategy is that there will only genuinely be two main sources of income: the

membership fees and the extra revenues made on location. Data highlights that the

Membership Collective Group made a total of 560,554 USD in membership, in-house and

other revenues for the fiscal year ended by January 2 nd, 2022, and that, in addition, the

membership waiting list reached an all-time high of 70,000 applicants, signaling that the

potential for profit is there (Membership Collective Group, 2022). The only other methods

Soho House would be able to use to popularize their Copenhagen venue further would be to
create events in the space once it opens to draw out the newbies, as well as consistently

promote Soho House Copenhagen on all platforms such as social media. Although these

various pricing strategies could generate a profit in the long run, they unfortunately come at a

hefty operating cost too — and MCG lost a total of 188,026 USD on its operation expenses,

as well as a net debt of 382,387 USD in the fiscal year ended by January 2, 2022, all very

concerning numbers.

Soho House needs to change its pricing strategy if it wishes to be a profitable business here in

Copenhagen. Thankfully, there are various solutions to turn pricing into a profit generator.

Soho House should retain its installment payment policy, rather than expecting its members

to pay an upfront annual fee. Offering installments is a far more inclusive way to establish a

pricing strategy as it will reach a greater number of potential members. Another important

strategy would be for Soho House to live up to its expectations, especially for its “U27”

members that will expect to be satisfied and well-treated after being delighted with the

discount for being below the age of 27 and joining an xciting, new private members’ club. In

addition, Soho House could truly take advantage of its strategic pricing standpoint in

Copenhagen by adding a deadline to its discounted membership fees perhaps — this could

create a sense of urgenc — combining limited accessibility to high-end resources with

cheaper pricing that is due to expire at some point will encourage non-members to register

speedily. Nonetheless, Soho House needs to keep its options simple. Its website already

offers four different types of memberships, each ranging in diverse prices depending on

whether a potential member is either aged below 27 or above; but the target group may get

overwhelmed with the excessive options and could get flustered balancing out the alternatives

of each. Soho House also needs to provide transparency into pricing data this means that by

making pricing data and advanced analytics powered by artificial intelligence more

accessible, sales representatives would be able to make much more efficient pricing
decisions. Another option would be for the club to further its understanding of what its

customers value. Indeed, the price of the membership truly reflects on what the member

thinks it is worth — if Soho House provides regular member insights, it would allow the

organization to quantify the value it creates but also understand its key in-house buying

factors. Regarding value, it would also be very beneficial to build perceived value, hence

offering some add-ons that don’t come at a price. Access to free publications or podcasts with

the SH.APP for example for the most loyal members. The next solution is for Soho House to

find ways to defend its membership fees, especially if they plan to increase the sum as its

waiting list and number of loyal members rises as well. Indeed, increasing its membership

fees by a very small percentage, gradually over time, rather than making a sudden increase is

more profitable — many members when joining a private club already expect incremental

increases; but they are much easier to just go with if they slightly increase. Several other

pricing strategies could be implemented in-house, and these refer to providing on-the-job

training with workshops with senior staff in order to sustainably enhance the club’s pricing

scheme by training employees to negotiate it amongst themselves and build confidence in it

and themselves (Jubas et al., 2015). Finally, one of the most decent ways of achieving a

profitable pricing strategy would be to put in place “showcase offering” (Max, 2019). This

means that Soho House should promote its most expensive membership package as much as

possible, but consistently advertise it as the one with the most beneficial and financial value

by comparing it to the seemingly lesser-good cheaper alternatives which provide less

advantages and may not be as worth it.

The pricing strategy for Soho House may be difficult to implement at the start, but with the

right intentions, the club could successfully launch in Denmark and reach a profit if it focuses

on reducing its membership fees and focusing on the members as much as possible, valuing

their needs and wants first. In addition, a solution needs to be made regarding the club’s
expensive operating expenses; perhaps a stronger reliance on digital media and e-commerce

would be a way to reduce its workforce and spend less money on in-person events that could

be costly.

Question 3:

Soho House must remember that cultural sensitivity can prevent the club from damaging its

brand reputation, as well as its consequential decrease in brand equity. When launching in

Copenhagen, it is important that Soho House maintains its standardization policy of

promoting its single, coherent brand image, all the while preventing a negative reaction from

the locals if it shies away a little too much from the local needs. In all fairness, Soho House

has seemed to adopt some forms of adaptation to its implementation strategy in Denmark as

well, as it has made a consistent effort to decorate the interiors of its Copenhagen venue with

art pieces and furniture inspired by local artists. Nick Jones, founder of Soho House, proudly

stated: “I can’t wait to welcome interesting, talented and kind people from its vibrant

creative scene to our global membership.” (Ritchie, 2022), underlining that Soho House is

making an adamant effort to respect, acknowledge and honor the cultural heritage of

Denmark as well as emphasize the importance of its people in shaping the future of the brand.

Another relevant element to the Danish culture is the strong threshold that “hygge’ has one

the lifestyles of the locals, referring to the ambiance of coziness, community and good vibes

that resonates within the country and especially Copenhagen (VisitDenmark, 2022). Indeed,

Soho House Copenhagen has a “Customs Room”, a dedicated area providing a “relaxed,

laptop-friendly space during the day” (Thomas, 2022) — the kind of atmosphere that

perfectly resonates with the “hygge” vibe of Copenhagen and beyond.

It is necessary to note that any given age group may think and act the same — this rule also

applies for occupations and income levels — hence, when drawing its attention an audience

of individuals that are both “Generation Z” and “Millennials”, Soho House must
acknowledge that their target clientele will more or less have the similar cultural upbringings,

habits and ways-of-life seeing as they collectively grew up in Denmark. Furthermore, they

are almost guaranteed to have the same tastes, hobbies and aspirations in life, seeing as the

club is targeting members that work specifically in the arts and media. Fortunately for Soho

House, the culture in Denmark is similar to the United Kingdom’s, being low-context. This

means that in the workforce, the work ethic is considered to be task-oriented, with a strong

focus on individualism and individual achievement amongst employees. To achieve

employee satisfaction, it would be a relevant idea for a manager at Soho House Copenhagen

to employ a factual, logical and rule-oriented approach to the work process in order to fully

reach to the Danish employees, as well as planning tasks that are based on an explicit basis,

in which exchange of knowledge can be perceived as transferable. In other words, messages

are meant to be specific and straight-to-the-point — hence this rule should also apply in Soho

House’s e-marketing plan when promoting its new venue to the Danish market.

All in all, Soho House needs to reject its strong hierarchical workforce structure when

launching in Denmark, instead prioritizing a more easygoing, laid-back, and egalitarian

approach to its business plan, especially in terms of its workforce. In addition, to properly

comply with the ways-of-life of the locals, Soho House can properly obtain this goal by

implementing a mix of adaptation and standardization strategies whilst launching in

Copenhagen, ensuring to promote the general “wokeness” of the club as much as possible,

strongly maintaining a focus on reflecting the beauty of Denmark in the interiors of its

Copenhagen venue.
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