Golf Business Monitor

How Groupon can increase golf course sales?

Among many of our everyday activities like buying is becoming social. In the 2011 Social Commerce study of the National Retail Federation turned out every 5th US customer is using Groupon. Groupon says golf courses are one of the active users of their services:

Some golf courses are already using Groupon to boost green fee sales, like Trent Golf Park Golf or Quail Chase Golf Course (you will not find on Quail Chase Golf Course's website the opportunity of Groupon offer).

Those who have already utilized Groupon's solution realized that people who are buying via Groupon they have a quite a good purchasing power and capability. Here are some highlights of Groupon's survey:

Beside selling green fees, I would use Groupon to promote:

• golf course membership registration and renewal
• pro shop (e.g. it pays off to you to buy your new Titleist golf club)
• event organizing (e.g. hold your conference in our golf course and get x%)
• hotel of the golf course
• golf training etc.

However you still have to figure out whether still beneficial to give 50% discount to those who are interested in your offer. You will have to calculate how many people can you attract and how many of those people will turn to be a loyal customer. In theory if your golf course and service is outstanding you can expect loyalty and more sales. Amen. :-)

Golf rocks tennis' TV audience in US

I was surprised to read in the latest edition of The Economist (June 11th 2011) that in US people prefer to watch golf over tennis. I started to check worldwide ranking of US tennis players where I had to realize that there is no US tennis player in the TOP5 in the ATP ranking (men). Although Rafael Nadal, Wiliams sisters and Roger Federer are playing very well it will not attract sufficent size of audience in the US. It is no brainer to say no advertiser will consider to sponsor such tournament where his brand cannot get sufficient exposure.

But why golf is getting bigger viewership in televisions? Why beneficial to sponsor a golf tournament in the US? Especially when we know golf is more expensive to broadcast than other sports (networks need an army of cameras covering an immense outdoor space) If we check from taxation point of view then it is easier to understand the situation (I still have not found on www.irs.com the right answer). Since Deane Beman (headed PGA Tour between 1974 and 1994) corporates can account for golf tournaments as charities. I cannot believe that the US Tax Authority can be fooled so easily. Such PGA Tour event sponsorship is arround 7-8 million USD, but at the end the exposure will worth up to 55 million USD. Thus the cost of 1 GRP is even cheaper (+ add quantity, agency and other special discounts that advertisers get)

Still why Americans prefer to watch golf? I have couple of answers:

1. More successful American players: Tiger Wood, Phil Mickelson, Bubba Watson, Jim Furyk etc.
   
2. Winning Ryder Cups
3. Our society is still chasing such nobel values of honesty, integrity, respect, confidence, responsibility, courtesy, preseverance etc what golf is standing for. Well, some of these values have not seen in the last to years from Tiger Woods, but these values that we really esteem.

The current business environment is/was not in favour of PGA Tour's business model thus total direct revenues fell from 486 million USD to 461 million USD between 2008 and 2010.

Titleist's mother company Acushnet is sold to Fila Korea

The Acushnet (owner of Titleist and FootJoy) Company saga started a year ago when they sold Cobra Golf to PUMA AG. In those days I thought Acushnet Company  is just restructuring and want to focus on golf balls and golf shoes. Now it seems to me that it was not enough to the owners of Acushnet Company, Fortune Brands. Unfortuantely this is in line with the declining number of US and European golf players.

The new owner Fila Korea is quite a new player in the golf industry. After the acquisition, Acushnet will remain as a standalone company through separate operation from Fila Korea. The good news is the fact that Asia Pacific represents over 30% of the world's total golf equipment spending, and that South Korean golfers are among the most passionate and organized in the game. The negibouring China is also a growing golf market. Therefore it is good that South Korea is so close to the Chinese golf market.

Although at present, golf is still recognized as a luxurious sport by most Chinese. According to the survey of National Golf Foundation, Shanghai, Beijing and Guangdong, the cities with the highest level of per capita consumption, have 40% of total 18-hole equivalents in China.

I hope that this Korean company will keep on investing in Titleist and Footjoy for our favour.

France selected to host 2018 Ryder Cup

What a big surprise! France was selected to host 2018 Ryder Cup. This is a great achievement to France, especially when we know who were the competitors (Germany, Spain, Portugal).

The games will be played on Le Golf National course near Paris. This is only the second time the biennial match between Europe and the United States will be played on mainland Europe. The first was in 1997, when the late Seve Ballesteros captained Europe to a single-point win at Valderrama in Spain.

There are three questions on my mind at this moment:

• How it will help to promote golf in France? 
• How it will promote France as a golf destination? 
• How much attention can get Ryder Cup in France where it is not as popular like in Spain, UK or USA?

US golfers' number close to edge of collapase

Gen Yesuda says in his article in Golfweek.com that for the third consecutive year, the number of golfers in the U.S. declined, falling 3.6 percent to 26.1 million in 2010, according to the National Golf Foundation.

The slide, from 27.1 million golfers in 2009, wasn’t unexpected in light of the heavy toll the recession has had on the sport and the economy in general.

The decline has not started in 2009, but even earlier we saw signs that something went wrong. At the same time I would not use the economic climeate as an exemption. This is just one reason among the others (+golf equipments' (golf clubs, golf balls, golf trainings etc.) prices went up). Couple of signs shown us that the way we are managing golf club membership (namely golf club membership policy) is not in favour of golf courses and golf industry itself. We also saw how such emblematic company like Acushnet Company  (manufacturer of Titleist, Scotty Cameron etc.) and Ping are struggling to be profitable.

Almost a year ago I warned people that the current golf club membership policy does not fit to the current business environment and not in favour to recruit new players to golf sport. People do not like those old-fashioned rules of golf courses of the 20th century. They expect openness, transparency and flexibility. To be a golf club member should not be a privilege but something like a fan of a Facebook page.

Here are some findings of National Golf Foundation:

• The number of “core” golfers (eight or more rounds annually) dropped to 14.8 million – down 3.6 percent from 15.3 million in 2009.

• “Occasional” golfers suffered a similar decline: a drop of 3.7 percent to 11.3 million from 11.8 million in 2009.

• The number of rounds played in 2010 was 475 million, down 2.3 percent from 486 million in the previous year. (By comparison, rounds played in 2000 and 2005 was 518 million and 500 million, respectively.)

The participation study defines a golfer as a person, age 6 or older, who plays at least one round of golf in a given year. Its results are “derived from a multi-sport study of 40,000 Americans, executed in conjunction with the Sporting Goods Manufacturers Association,” the NGF stated.

What happened to Titleist's parent company?

In May 2010 I wrote that Titleist's parent company Acushnet is selling Cobra Golf to Puma AG. The Acushnet saga is still not over. In those days I said OK, fine Cobra Golf is underperforming and they cannot finance the losses that Cobra Golf generates.

Today they came out with the following announcement that I received by e-mail as a loyal Team Titleist member:

"Fortune Brands (the parent company of Acushnet Company) announced that its board of directors has approved in principle a plan to separate the company's three businesses in order to maximize long-term value for shareholders.

As part of this plan, the Acushnet Company (which includes both the Titleist and FootJoy brands) could be sold or spun off into an independent, publicly-traded company."

What went wrong in the golf industry and at this prestigeous golf equipment company? Oversupply? Overestimating the potential growth? Whatever it is  we can expect the fall of Acushnet. The possible new companies will have dire problems to save their market position and bargaining power against retailers and golf courses.

Golf participation in Europe 2010

Those who are familiar with the golf industry they know that KPMG prepares from year to year a survey about golf course development and golf participation trends. 2010 is not an exception. ;) Since the last decade of the 20th century the pace of golf course building and participation is much slower that worsen in the past five years. Last year there was in fact a 4% decrease in the number of golfers in Europe's largest golf market: UK&Ireland.

 
KPMG tries to keep up the illusion that it is still lucrative to invest in golf industry. He does not mention the current economic climate that recently hit Ireland. Ireland is now asking for EU financial help, just like Greece, Spain and Portugal. You can imagine what will be next year when you try to play in Spain and Portugal...prices will reach the sky and people will abandon this lovely sport.

KPMG also forget to mention other curcial factors that I mention in my previous post, namely golf course owners' lack of relevant management knowledge and education.

Two other interesting facts from this survey: in Germany is the highest ratio of female golf players. In Turkey is the highest ratio of junior golfers.

Ireland's stumbling golf tourism marketing - part 2

As I promised in my previous post I will keep on analyzing Golf Ireland's Facebook communication. If I have to give KPIs for a Facebook brand page the following would be:

• Clear Community Expectations: what the brand (in our case Golf Ireland) is expecting from the FANs + what FANs can expect from the brand. I think this page meets the expectations: OK.
• Provide Cohesive Branding: the branding of the page is in line with the offline communication.
• Be up to date: well the last post was published this Tuesday, but in general the page does not tell too much about Irish golf championships, golf courses and competitions.
• Live Authenticity: we men of the street would like to connect to real people and the same behavior applies to Facebook brand pages as well. What I like in social media is that it humanizes brands, companies. Golf Ireland is does not move into this  direction. :-(
• Participate in Dialogue: well the page has only 50 fans, 3 comments, 4 "LIKE"s since 20 July 2010. So there is no much we can expect but they do not respond to these few comments.
• Enable Peer-to-Peer Interactions: it is still early to talk about it, but the benefit of enabling P2P communication is indispensable. 
• Foster Advocacy: I cannot highlight enough the importance of Word of Mouth (WOM). I think it is one of the biggest achievement what a brand can achieve in social media. 
• Solicit a Call-to-Action: this is one of the 2 great traits of this brand page by requesting to tell a golf story that happened with us in Ireland.

As the bottom line, Golf Ireland's Facebook brand page is almost dead and boring. They should think about content that motivates people express their feelings, thoughts + invite others to join. 

Finally, here is cool Irish golf course, Old Head Golf Links (Kinsale):http://oldhead.com/golf/course-overview/.

Redesigning golf club scrubs

When I am visiting new golf courses I am always looking for something unique (beside the design of the golf course). I am sure that some small tools like golf club scrub always look almost the same.

So I say let`s start to decorate our golf club scrub. James Keyser`s solution is really lovely a friendly.

Ireland's stumbling golf tourism marketing - part 1

According to United Nations World Tourism Organization (UNWTO) the expected rebound of international tourism (arrivals, receipts, expenditure) is measurable. This recovery started according to UNWTO in Q4 of 2009. However this positive change will be seen mainly in South-East Asia, South Asia, North-East Asia and in the Middle East.  In Western Europe there will only +3% growth/change in comparison to the same period of the year (H1).

But what is happening in Ireland? The Irish economy is in recession since 2008 and it will stay there also this year, although the forecasted drop back will be much smaller than in 2009 ( -7.6%) "only" -0.5%. Some analysts say that the Irish budget deficit can reach this year to 20%. If this figures are not dashing than here come some KPMG research data: in 2009 in GB & Ireland region the number of round played decreased by 3% + operational costs increased at 43% of the golf courses they surveyed. The CEO of Club Managers Association of Europe (CMAE) Jerry Kilby says in the last 18 months there is a declining trend among young generations in golf club membership and the less frequency of play by casual golfers.

In light of these dire facts Fáilte Ireland (National Tourism Development Authority of Ireland) launched a massive image campaign (in spring 2010; including print media, online media and radio) to boost golf tourism and to show Ireland as an attractive golf playing country. Nice bunch of people from different organizations came together (Carr Golf, Killeen House Hotel, Helen's Bay G.C., Killarney G&F Club, NITB, Tourism Ireland, Fáilte Ireland) in March 2010. They looked for ideas how to position Ireland Golf to win, attract more golf tourists over such countries like Spain, Portugal, Turkey and South Africa (...always the sun....do you remember this song?) and give potential golf tourists reasons to prefer  playing golf in Ireland. Hmm..well, really challenging job I must admit.

The golf weather is not in favour of Ireland (but it is not so pleasant to play in hot weather (30 Celsius +) either. The accessibility of Ireland is not so easy (only by air and sea). What is their communication strategy of their image campaign? They claim  Golf Ireland's  USP (unique sales proposition) is "Inspiring Golf & Genuine Engagement on & off the Golf course". Their insight (I have not found any reference to any kind of market research) what golf tourists are expecting from Ireland is "an authentic golf challenge with stimulating shared experiences &moments" (like from any other golf tourism destination country). I put in italic the phrase shared experiences, because it says to me that they started to grasp that social media is really important in tourism communication. The brand personality Golf Ireland was defined as friendly, welcoming, unassuming, infectious. Are they serious? Is Ireland the only golf country that can claim these values?? I am not sure. The bottom line was: tagline = Time to Play. They think it is  unique to Ireland (LOL).

In their presentation I could not find answers to my following questions (based on P.O.S.T. method):

1. People: Who they want to reach? Why should we target them? What is the number of potential golf tourists?
2. Objectives: what do you want get out of this campaign? what would you consider as a successful campaign? More number of rounds on golf courses or booked rooms on golf courses and hotels? etc.
3. Strategy: how we will reach our objectives??
4. Tools: What technology should we use? What tools would make sense to help carry out out our strategy and reach our objectives?

Since the target audience was not defined and these unknown people media habit is unknown it is questionable the usage of print media and radio. To utilize Irish tradition of storytelling is a great idea (I guess every nation has such tradition, but never mind) as we are collecting information and ideas via social media. It was great to read that Golf Ireland wants to utilize such social media channels as YouTube, Flickr, Facebook. But how about golf social networking sites such as TheGolfSpace.com, MyCrazycaddie.com, iGolf.to, Golf-finder.net, Golfbuzz.com or GolfSn.com (there are many many more)? They also missed some well-known tourism social media portals such as Tripadvisor.com, Gusto.com, Wayn.com and MyTripBook.com...

From the very same document it does not turn out how they would:

• Define social media channels + who are the ideal social media channels?
• develop content for social media?
• participate in dialogs?
• foster advocacy?
• solicit call to action? etc.

In my next post I will give you answers how Golf Ireland could maximize Facebook. Till then here is Golf Ireland's Facebook page (http://www.facebook.com/#!/pages/Golf-Ireland-Time-to-Play/103509856365026?v=wall&ref=ts). So far they have only 20 fans/"LIKE":