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. :-)

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.

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.

First e-learning program for golf course managers

Not so long time ago I wrote about golf course workers' salaries and benefits. From the study of Club Managers Association of Europe (CMAE) and Colt Mackenzie McNair turned out that 50% of those who are possessing senior  roles in European golf courses have no adequate education since they came from different industries. Now as more and more golf course managers are realizing that something has be changed and probably we reached the level of urgency (see theory of John Kotter), I was happy to read about an e-learning program for golf course managers initiated by European Golf Course Owners Association and Club Managers Association of Europe (+Hotelschool The Hague Performance Management BV). This 6-weeks long training covers the following areas:

• Strategic marketing for clubs (incl. market research, writing marketing plan etc.)
• Membership models and options, products and services for customer groups, strategies for attracting visitors
• Communications techniques for clubs, including internal and external
• Customer service standards, expectations and delivery
• F&B concepts and strategies, for in-house F&B teams and clubs with out-sourced catering contractors
• Managing F&B operations

I think 6 weeks is not enough to grasp the essence of each area. It should be at least 1-2 years program. From there press release (of course it was not social media optimized but rather in style of web 1.0) it is not clear whether which size of golf courses' management they are targeting. For whom it will provide the highest ROI. As part of Communication techniques they will teach new media. I guess it is going to be social media or even search engine marketing. To consider social media as "new media" is a joke and give such big attention to newsletters instead of to search engine marketing and mobile marketing is really sad

Belton Woods Golf Club is struggling on Facebook

Last weekend I read about a very bold and brave action of De Vere Hotels, Resorts & Venues (owner of Belton Woods Golf Club) by coming up with a flexible golf club membership model to stop the declining number of golf club membership. The essence of this model (the name of this model is The De Vere Club) is the following:

a golf player can join for ₤295 and then use the points purchased to enjoy 16 different De Vere golf courses at 11 venues. The points can be topped up at any time.A round will cost 6-7 points on average, so that’s plenty of golf covered by your golf club membership. To connect more people (I guess this is their motive) they created 4 months ago a brand page on Facebook for Belton Woods Golf Club.

To create a brand page or fan page on Facebook is not a big thing, rather what kind of content you provide to your "fans". And here I find many mistakes:

• no connection between Belton Woods brand page to De Vere official website
• missing important TABs like: Video/YouTube, Flickr, discussion, Reviews, Twitter. Just help those would like to make revenues from similar brand page: http://www.facebook.com/youtubetab;http://www.facebook.com/twittertab; http://www.facebook.com/blogtab.
• introduction is lacking about the golf course (ownership, whether I can use De Vere golf club membership card or not etc.)

A less high-class golf course, Edgewood Tahoe Golf Course made a better brand page on Facebook, by adding "reservation TAB, review and video TABs.

New golf club membership policy recquired

Once again there was an interesting article in Golf Monthly (June, 2010). The article talked about the challenges of golf courses how to retain golf club members and halt the negative trend. There was a survey in England, Scotland, Wales and Ireland about golf club membership trends between 2005-2009.

Wales suffered the most by losing almost 12.46% (from 69,764 to 61,070) of his golf club members, while Ireland loss was "only" 3.75%. I think in the current economic climate "pay-n-play" model is the most reasonable payment method. Less money is more secure than nothing. New comers will not necessarily would like to stick to one golf club for the sake of golf community.

There is no place to be surprised when many golf courses are still rigid and not willing to change his golf course membership pricing policy. At the very same time they do not come up with lucrative solutions to retain golf club members. Beside my harsh critics I can show a very positive one as well. From Oregon Golf Association, Eric Yaillen (Director of Marketing & Communication) turned to me after reading my post about  co-branded card  program for golf club members as part of a loyalty program. There are many options that are still open to stop the negative trend (e.g. affiliate marketing, loyalty card program etc.) .

Golf Salary & Benefits Study 2010

After a big break I am back. I hope you forgive me for such delay. Recently I came across with Club Managers Association of Europe (CMAE)and and executive recruitment specialist, Colt Mackenzie McNair's new findings about golf salaries and benefits study (2010). The survey focused on Golf Clubs and Resorts.

Here are the main findings of the study:

• A degree-level education or professional qualification was not a prerequisite of a senior role and only 50% had either of these. It seems to me that time stopped in the golf industry in the last 60-70 years or we are not in such a bad condition if we can afford such luxury. By reading Colt Mackenzie McNair's job positions I had different impression...
• Salaries reflected the caliber and experience of the respondents. 40% of the respondents said their earnings excessed 60,000 Euros annually. Both in UK and Ireland the bonus schemes were almost the  same and it was not unusual to have bonuses above 10,000 Euros.  In these countries the  basic salary was much lower unlike in Germany or in Scandinavia. The question and challenge of every employer to find the right ratio of  basic salary and bonuses. Do we consider the market situations and economic climate? Or whether the employee will be able to earn satisfyingly?
• Amongst other employees, Golf Course Managers (green-keepers) earned the highest salaries, with a third paid in excess of 50,000 Euros per annual. 
• Cca. 60% of Club House Managers/F&B Managers/Stewards and Membership Managers/Administrators earned less than 30,000 Euros annual.
• On average, over 90% of golf clubs perceived a need for training staff. Scandinavian golf courses received much more trainings than their British partners. This finding proves me that there are managers who do not recognize the importance of on-the-job trainings (also as part of a motivation system).Do you know that it is cheaper to retain qualified employees than find somebody to replace them? 
• Nearly 75% of the golf clubs (who participated in the survey) had a gross annual revenue under 2 million Euros. The situation is even worse in the US, where golf course revenues (median) fell by 5.1%. 
• Surprisingly 2009 was stronger than 2008 for many golf clubs in Europe from membership and visitors fee. At the same time in the US it fell by 4.6%.
• In spite of these sad facts staffing levels has not changed between 2008 and 2009. One in 5 increased their numbers of employees in this period. How is it possible? I am sure it has not happened in CEE region.

Virtual golf course or an added value service?

Thursday I had a great day. I got involved in an interesting initiative of Business Golf International. As companies and not just golf courses are highly motivated to come up with ideas, solutions that will motivate potential customers to spend more money (even if they have not planned) and give them reason for repurchase and brand loyalty. The George-based Business Golf International and the world largest airline, Delta Airlines developed a new loyalty program schema, International Links Golf Club for SkyMiles members. This will be launched 1 March, 2010.

They promise to give access to 300 US golf courses and many others around the world. Here some of the big names: Doral in Miami, The K Club in Ireland, Trump National in Los Angeles, Son Anten Golf Resort, Valencia, Spain etc. Hopefully the Hungarian golf course Old Lake Golf Club will also join. :)

Well, they have not reinvented the wheel, because we can find many similar initiative with similar interests. As we know 2009 was not an ideal year for the golf tourism industry.

Singapore Airlines and American Express are offering access to Platinum Golf Card holders to 30 golf courses in Singapore and around the world. Last year golf tourism in Asia is bucked the global recession and gave the region a much needed boost.

What is more interesting, as it is more complex: Air France-KLM's FlyingBlueGolf program (with 850 destinations). They thought about golf players' life and their needs, such as car rental, community, tee time arrangement plus their website serves as social networking portal: www.flyingbluegolf.com.

Emirates' loyalty program Skywards Golf Fee Card is even more impressive. They offer to members up to 50% reduction on green fees at more than 2,300 golf courses in 112 countries.

My concern is, how many of us are joining such loyalty programs and do we maximize our credit points that we earned with flying with certain airline?  Those people who are traveling with their golf clubs, they must be ardent golf players. What is the ratio of ardent golf players among golf players? Last year the round of play declined even more which makes such offer less attractive and motivating.

In general airlines have the following rule regarding golf club equipments: you can take one item of golfing equipment is accepted as part of a customer's free baggage allowance. This means 14 golf clubs and 12 golf balls and 1 pair of golf shoes. Fore more information: http://www.theworldofgolf.com/travel.asp

Ryder Cup results on your mobile

I am getting more excited as the next Ryder Cup is getting closer (1st - 3rd October 2010) and this time I am really because it will held in Wales in Celtic Manor Resort. I hope my boss let me go on vacation in those days. I am also preparing to a worse case scenario. So I looked for some kind of mobile solution to be able to follow up the Cup. But first let's see what is going on in the mobile applications' market:

The market for mobile applications hasn't reached mainstream adoption just yet, but is poised to hit the $9 billion mark by 2011; device makers, service providers, and software vendors all may contribute. The market, which is expected to reach $3.8 billion this year, is set for double-digit annual uptake into 2011; the company predicts that U.S. annual growth rates for mobile apps will stretch from 20 percent to 37 percent from 2006 to 2011.

Those who would think that a mobile application is merely a new gadget or hype they are wrong. We should think about mobile application beyond as an individual results tracking solution and tournaments' results (e.g. eGolfScore.com, iGolfSystem.com, thecaddie.com), but also to extend relationship with golf course members (e.g. tee time booking). It can bring new color in golf course member communication. It is a way to engage golf course members and give more control over tee time booking management, membership renewal/subscription. This can be very attractive for private golf courses where discretion is crucial.

US golf courses' revenues are sharply falling in 2009

As it was expected golf courses' revenues declined significantly not just because of the economic climate, but also the stubborn attitude of golf course owners and managers. These golf course managers should understand that as a result of macroeconomic forces they must locate new opportunities for growth and increase productivity (e.g. new payment models, second-hand balls, co-branded cards, affiliate program, artificial truffgrass, up-to-date irrigation system etc.). John Kotter says in his book, Leading Change, that managers, leaders will not make changes until they feel urgency to do so. I hope the figures of US PGA will motivate them to start thinking about changes:

 

These changes not necessarily should come overnight or to be big, rather systematic. I would say we should create short term, tangible wins.