Month: November 2018

Strategic Intelligence Overview: Part 3 of 3

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Top performing clubs around the world are finding newer, faster and more efficient ways to leverage business intelligence and create competitive advantages for their clubs. The first two articles in this three-part series included what business intelligence is and why it is important (see “Strategic Intelligence Part One,” September 2018) and how to use and implement business intelligence (see “Strategic Intelligence Part Two,” October 2018). The final article will identify desirable outcomes and key results for clubs that have leveraged data.

While the initial infrastructure set up does require an investment of time and money, business intelligence should be viewed as a tool to aid and support club leadership with sound decision making and strategy, not another chore to be completed. Informed decisions require a combination of competitor, market and operational data along with member feedback data. Many clubs use this information anecdotally and it hinders everyone from staying on the same page.

One of the most important benefits of utilizing a strategic intelligence process is the time and effort saved during board, committee and staff meetings due to reduced deliberation and off topic discussion. “It’s hard to argue with the facts,” stated Derek Johnston of Global Golf Advisors. “But those facts still need to be secured, analyzed and regularly prepared, which can be time consuming.”

Johnston shares that a Global Golf Advisors client recently had a breakthrough because of the information brought to light through its strategic intelligence process. “Club X had always raised annual dues by 2.5 percent each year but its bottom line was struggling due to labor and other cost increases. A historical trend analysis of key competitor clubs revealed that Club X’s competitors had been raising dues annually by an average of four percent for the past three years. In addition, member survey feedback identified high satisfaction in the Value for Money category. Armed with this data, Club X raised annual dues by five percent without backlash and is planning similar increases in the future as long as subsequent data supports it.”

Another client, Club Y, had recently completed a major renovation that included the addition of a fitness and racquet sports facility. The club was achieving member satisfaction ratings above comparable clubs but was struggling to recruit an ample amount of new members each year. According to Johnston, Club Y’s lead generation relied heavily on member referrals with minimal marketing effort beyond the current membership.

Using mapping, demographics and real estate trends to enhance marketing effectiveness, Club Y implemented a tracking process to identify the source of the prospective member lead along with the lead’s home address. This process exposed a significant disconnect. Leads that came from new members had a conversion rate of 17 percent over the past five years. Leads from tenured members were less than four percent. This data lead to healthy discussion and ultimately a new strategy for lead generation and membership sales.

When asked the question, “What does strategic intelligence success look like?” Johnston answers with “Readily available data in every board and management meeting that is analyzed and presented in a manner that improves the efficiency of the meetings, enables more focused discussions and results in a higher quality output. Ultimately strategic intelligence leads to a superior strategy and increased support for the decisions that club leaders make.”

This article was authored by GGA Partner Derek Johnston for the Private Club Advisor.

Key Benchmarking Standards in the Golf Industry

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How to Leverage the Information to Improve Operations

Benchmarking standards are commonplace in most industries. These standards are set and updated based on defined and evolving business models and shared information. The core objectives for creating and using benchmark standards are performance measurement and improvement. The golf industry has lagged other industries in the widespread adoption and use of benchmark standards.

The good news is that change has been brewing for years and is picking up speed. The NGCOA Canada is helping to lead the charge through its various benchmarking and performance tracking initiatives, including the Revenue Tracker and Rounds Played & Weather Reports, which provide comparisons of an individual course’s results to their competitive set, provincial and national averages along with Performance Intelligence which provides course specific benchmarks and feedback.

With the various categories of courses, and corresponding operating models (private, semi-private, resort, public, and municipal courses), executing benchmarking and performance tracking initiatives is no small feat.

In order to effectively use benchmarks, there needs to be standardization. This typically requires the use of Key Performance Indicators (“KPIs”) that enable meaningful comparison from business to business and across markets. The KPIs for each type of course are different.

As an owner or operator, this means you need to be recording, tracking and updating KPIs in a manner consistent with the industry (category) standard as a baseline starting point. Therein lies the greatest challenge the golf industry is set to overcome.

In recent years, it has become evident that benchmarks and KPIs have significantly helped golf course owners and operators measure and modify their operations to improve financial performance. Financial performance is not just net income, it includes managing the balance sheet (working capital and debt) and ensuring the maintenance of physical assets.

PUBLIC, SEMI-PRIVATE AND RESORT FACILITIES

Public and semi-private golf course operations have a singular focus – maximizing the yield on a finite inventory of available tee times. As the market for golf continues to evolve, a focus on maximizing gross margin from non-golf related revenues will also become more important.

Some of the most important benchmarking standards for public and semi-private courses relate to rounds of golf, revenues per round, and labour and other expense ratios.

The following are a few examples of important KPIs by category:

Rounds and Revenue

Naturally, a key measure of performance is rounds played. Beyond revenue, rounds played, and average revenue per round, critical indicators required to understand performance include:

  1. Tee time utilization: rounds played compared to rounds available; and,
  2. Rounds played yield variance: how much does each round yield, on average, compared to the highest yielding round.

These indicators allow operators to quickly understand if their pricing model is effective, or if it needs to be adjusted to drive utilization and yield simultaneously higher. While each course and market are different, if your tee time utilization is below 40% and your average revenue per round yield is below 70% of your highest yielding round, significant adjustments should be considered to improve performance. A healthy course will typically run at a utilization rate of 50% to 65% of weather adjusted available tee times and average revenue per round as a percentage of peak revenue per round between 70% and 80%.

Other helpful metrics include utilization and yield statistics measured on a per round basis for other ancillary revenue sources such as carts, driving range, food and beverage, and merchandise. Resort properties will also measure green fee revenue per room, after adjusting for occupancy sales; and total rounds played by guests of the resort versus non-guest play.

Cost of Sales

The cost of sales metrics are generally more straightforward and easy to come by, with costs more consistently recorded and tracked. Generally, food and beverage cost of sales as a percentage of food and beverage revenue average between 26% and 36%, while merchandise cost of sales as a percentage of merchandise revenue average between 65% and 75%, depending on the mix of hard and soft goods sold.

Labour and Other Expenses

Labour expenses are the largest category of expenses for golf courses, generally ranging from 52% to 58% of total expenses.

Expense metrics which go beyond simple dollars and cents, are generally harder to come by due to the wide variety of operating models, departmental structures, and local market conditions for labour and other products and services.

That said, typical labour metrics include the following:

  1. Labour related costs as a percentage of revenues and costs. For instance, food and beverage labour expense as a percentage of food and beverage revenue generally averages between 38% and 50%.
  2. Full-time equivalents by department. According to the most recent NGCOA Canada Compensation & Benefits Report, the average full-time equivalent head count at public and semi-private facilities in Canada is 18.2.
  3. Actual key employee payroll and benefit costs. Public and semi-private facilities employ an average of 52 employees, with significant variances in the mix of staff (permanent, seasonal, full-time, and part-time) by region and type of facility – you are encouraged to consult the report for a detailed breakdown of compensation by key position.

Other operating expenses are typically evaluated against a unit of measure. For example, greens expense per maintainable acre and clubhouse expense per square foot.

Advertising expense is measured as a percentage of total revenue, as are other variable expenses such as bank charges and credit card fees. From a capital expenditure standpoint, public and semi-private golf courses should on average spend between 3% and 5% of total revenue on maintaining existing capital items.

PRIVATE MEMBER CLUBS

Private clubs sell and market more than just golf, they promote a lifestyle and social hub. Instinctively, not-for-profit private clubs focus on break-even operations, member satisfaction and maintaining assets.

In order for a private club to be successful, all aspects of the operation must meet members’ expectations, and as a result, measuring utilization and service levels of all club facilities is quite important. In addition, most people do not want to belong to a club that appears run down; as such, an important KPI is expected capital maintenance costs and the funding of those costs through entrance and capital maintenance fees. Below are a few examples of private club KPIs:

Revenue

The key focus from a revenue perspective is annual dues, maintaining a stable membership count, guest fees, power cart revenue, and food and beverage revenue. An example of important revenue KPIs for a private club are shown below:

  1. Full Member Equivalent: total annual dues divided by a full member’s annual due.
  2. Satisfaction, participation and utilization: critical statistics to measure and benchmark.
  3. Natural attrition rate from existing membership: typically average between 5% and 8% of total memberships.
  4. Membership Conversion Rate from Inquiries: generally average between 8% and 12% of qualified inquiries.
  5. Revenue per membership by department, source and membership type.
  6. Average guest rate (achieved) compared to the peak guest rate, typically averages between 65% and 75%.
  7. Average number of guest rounds per membership, typically ranges from 5 to 12.
  8. Average tournament patron rates, typically ranging from 80% to 90% of the peak guest rate.
  9. Rounds per membership, typically ranges from 35 to 48.
  10. Utilization of tee times by membership category.
  11. Golf Cart Utilization: golf cart usage as a percentage of total rounds, which typically ranges from 35% to 50% depending on walkability of the golf course.

Cost of Sales

Similar to public golf courses, cost of sales as a percentage of revenues are some of the more readily available metrics. Typically, food and beverage cost of sales run higher for private clubs, between 35% and 42% of food and beverage revenue, while merchandise cost of sales typically average 75% of merchandise revenue.

Labour and Other Expenses

From an expense perspective, most private clubs have excellent controls in place to keep expenses in line with the approved budget.

  1. Labour expense ratios as a percentage of total expenses are usually slightly higher at private clubs ranging from 55% to 62%.
  2. Full-time equivalents and headcounts are also typically higher at private clubs, averaging 48.3 FTEs and 101.9 employees.

All other KPIs related to expenses are generally based on a unit of measure of as a percentage of revenue. For most operations, controlling expenses is important; however, for private clubs this may not be as important as meeting member satisfaction. Defining what is important needs to be a ‘first step’ for each operator.

HOW DO YOU LEVERAGE KPIs?

A requirement for effectively using benchmark standards to improve your specific circumstances is the application of experience to compare and contrast your results with that of the standard, investigate discrepancies and develop focused improvement plans.

Most owners and operators want to be as efficient as possible without lowering their expected standard of excellence. The use of benchmarks allows operators to both measure performance and adjust operating procedures to improve performance and meet the goals of the club.

Although benchmarks are typically used to measure historical performance, they can be used to make alterations on a timely basis if reviewed appropriately and to provide direction for adjustments moving forward.

For example, certain utilization KPIs can be evaluated daily, weekly or monthly. For a public course operator, it is essential that their information system be ‘real time’, so KPIs can be calculated, and if needed, communication to the general public adjusted in a timely manner (yield management). The use of KPIs and benchmarks need to be part of the toolkit for management and the owner.

Furthermore, more sophisticated operators have set up specific dashboards with differing KPIs for different levels of management and/or ownership. The dashboards are produced on a periodic basis, either daily, weekly or monthly depending on the audience.

This information is then used to adjust operations on a timely basis or adjust marketing and communications to patrons in order to enhance utilization of the facility.

From a management perspective, KPIs and utilization statistics can be used to align labour costs with activity. In addition, some operators use KPIs to evaluate staff performance and determine bonus calculations.

The most important are KPIs that allow for timely revenue enhancement and service improvements that improve patron/member enjoyment. If you are not using KPIs, you are at a disadvantage and are missing a key tool in your management toolbelt.

STAY COMPETITIVE

In summary, benchmarking standards help each operator remain competitive within their market segment. KPIs can also become a motivating influence for staff and management. Simply tracking your results compared to budget is not good enough. Operators need more dynamic information which allow for the development and implementation of timely tactical solutions.

Industry benchmarks are key to a successful operation – without them your operation is at risk.

This article was penned by Derek Johnston for NGCOA Golf Business Canada. 

Budgeting 2019

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Budgeting for 2019 requires a broader-than-usual alertness to changing times and impacts on golf-oriented businesses. Newfound elasticity on revenue sources, such as dues and fees, will allow many to plan for revenue increases. That’s the good news. More sobering is the fact that most courses and clubs will strain to cover the rapidly accelerating costs of operations.

While it’s helpful to know that costs are rising, budget planners benefit even more from understanding the factors driving cost increases. Here are five cost areas where knowledge of underlying trends and timing will lead to accurate projections.

Labor

The U.S. Department of Labor’s Employment Cost Index notes that wages and salaries for U.S. businesses increased 2.9 percent for the 12-month period ending in June 2018, following a 2.4 percent increase in June 2017. The cost of benefits rose 2.8 percent for the 12-month period ending in June 2018, after increasing 2.2 percent in June 2017. Employer costs for health benefits increased 1.6 percent for the same 12-month period.

Insurance

The costs associated with insuring golf facilities are increasing. Willis Towers Watson’s insurance industry semi-annual report (2018 Insurance Marketplace Realities) projects increases in insured categories more vulnerable to natural catastrophe impacts.

  • Property: Previous-loss history more than doubles premiums in most markets. Clubs located in markets exposed to catastrophic claims will increase as much as three times those of non-exposed clubs, while those clubs with catastrophic experience with losses may see increases from 15 to 20 percent.
  • Casualty: WTW projections indicate that rates for casualty insurance will increase less than 4 percent.
  • Auto Liability: For clubs with automobile insurance premiums, rates are expected to rise from 5 to 9 percent. Ongoing market challenges exist in this space, and two years of steady price increases have not kept pace with loss trends and adverse developments. Rates are expected to rise more steeply.
  • Cyber: Golf clubs are vulnerable to cyber-risk. The WTW study notes a 15-fold increase in two years with claims near $5 billion. Organizations without claims can forecast increase of 5 percent or less.

Healthcare

“Over the past nine years, employee out-of-pocket spending for a family of four increased 69 percent in the form of higher co-pays and higher deductibles, along with 105 percent employee premium contribution growth,” Keith Lemer, CEO of WellNet Healthcare, said in an interview with CNBC earlier this year, noting that over the same period a year earlier employer premium contributions increased 62 percent.” Lemer added, “In 2008 more than 8 percent of a family’s income was spent on health care. In 2015 (last available data) it rose to 12 percent. This means people are making less money today as a direct result of the cost of health care.”

Food

The costs of food consumed at home diverged a few years ago from the costs of food served away from home – in restaurants and clubs. The U.S. Department of Agriculture predicted grocery store price increases from 1 to 2 percent. Food consumed away from home is expected to increase from 2 to 3 percent. For menu planning purposes, be aware that beef and veal are projected to rise 2 to 3 percent, egg prices will increase 4 to 5 percent, while cereal and bakery prices will go up 3 to 4 percent. The USDA expects prices for fats, fruits and vegetables to drop.

Fuel

Large consumers of fuel and oil by-products, including golf courses, will see some relief in fuel-related costs in 2019, according to an August 2018 J.P. Morgan forecast. “While geopolitical tensions and lingering risks of large supply disruptions remain an upside risk, we think that prices will be corrected downwards towards end of the year and remain capped in 2019,” J.P. Morgan analyst Abhishek Deshpande wrote in the note reported by CNBC. This is important for golf where oil prices and those of oil by-products, including fertilizer, have direct budgetary impacts. For budgeting purposes, managers should watch oil futures. One can expect higher gas prices about six weeks after an increase in oil futures.

GGA’s Henry DeLozier penned this article for Golf Course Industry Magazine.

The ‘Tiger Effect’

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The ‘Tiger Effect’ and How to Leverage the Influence of Tiger Woods on Millennial Golf Interest

On the eve of this year’s Masters Tournament CBS sportscaster Jim Nantz said, “This might be the most anticipated Masters any of us has seen in our lifetime.” And for good reason: the hype surrounding the return of modern golf’s greatest icon to battle it out against a plethora of ‘new age’ stars. Ironically, many of these rising stars say they found their passion and motivation for the game as a direct result of idolizing Tiger’s dominance in the late 1990’s and early 2000’s.

Fast forward to the 2018 Tour Championship, which concluded in storybook fashion with Tiger claiming his 80th career victory and his first in over five years. NBC announced the PGA Tour’s season finale drew a 5.21 overnight rating, the highest of any non-major championship this year. That number is also up a whopping 206 percent over last year’s event, all the while competing for ratings against NFL Sunday.

Tiger’s impact on the growth of the game has been well documented over the years. Tour earnings increased at 10x the rate of inflation when comparing 1985 to 2010. No one has ever moved the needle in his or her sport more than Tiger Woods. His presence in only a handful of events this year has brought measurable spikes in TV Ratings and tournament attendance. More importantly, for club managers, another byproduct of the ‘Tiger Effect’ is an increase in golf participation levels (defined by the NGF as people age 6+ who played golf on a golf course).

Let’s examine the trend in US golf participation since Tiger burst onto the scene in 1996 with his first victory and began capturing the attention of the golfing world. Since that time, there seems to be an unavoidable lagging correlation between Tiger’s ‘presence’ (number of starts and number of wins) and the golf participation trend. As an example, the two-year time period between 1999 and 2000: it is widely regarded as the height of Tiger’s dominance and included 17 wins and 4 major championships. The lagging effect on golf participation was an increase from 26 million to 31 million golfers in the US over the next three years. Jump ahead to 2008, when Tiger’s first major injury-riddled season limited him to 6 starts and golf participation began a declining trend that was then amplified with the economic downturn and Tiger’s hiatus for ‘off-the-course’ indiscretions. As the economy has recovered in recent years, we find ourselves returning to the level of participation in the mid-90s, the pre-Tiger era.

What that may infer is the jump from 25 million to 30 million has a lot to do with the ‘Tiger Effect’. While we likely won’t experience the same participation rise as we experienced at the height of his dominance, past history suggests that the more we see the red shirt on Sunday afternoons, the more latent golfers will flock to the links. According to the NGF, non-golfers interested in playing golf was 12.8 million in 2017, up from 11.9 million in 2016 and double what it was five years ago. The estimated number who say they are at least ‘somewhat interested’ in taking up golf was 40.6 million, and well over a third of that number (15.2 million) were Millennials (18- to 34-year-olds), which made up the largest single age group of non-golfers who expressed interest in playing golf.

As a Millennial, I can vouch for the declining interest I witnessed in my peer group post-2008. Ten years have passed, and as Tiger tapped in for victory to win the 2018 Tour Championship, my social media feed was flooded with excitement from friends and colleagues who have been on hiatus from the game but are still fans and players at heart. I can’t help but believe that Tiger’s return to the top of golf will provide a ‘kick’ that many latent Millennials need to get the golfing itch back, and with it the decision to become club members again.

To all club managers out there watching your membership continue to increase in age while the club struggles to attract new Millennial members to join, I urge you to promote aggressively this winter and take advantage of the current momentum and excitement among the Millennial audience. It may just be the best opportunity in a decade to attract an audience that is crucial to regenerating the membership pipeline at your Club.

Tactics to consider:

  • Organize a ‘golf pool’ for each major championship in 2019 and extend the invitation via social media channels. Encourage members to invite their friends to participate and to visit the Club on the ‘Major Sunday’ for a viewing party social event.
  • Consider adding team events/competitions for younger members, specifically in the spring. Again, scheduling these events surrounding major championships can spike interest in latent Millennials who become most engaged during these weekends.
  • Be sure the pro shop has Nike/Tiger apparel in the pro shop or club-branded ‘red shirts’ of its own. Perhaps consider a discount sale on all ‘Tiger’ related merchandise in advance of the Masters Tournament next spring.
  • Golf simulators resonate strongly with the Millennial audience, reminding them of their days playing the iconic ‘Tiger Woods EA Sports’ video game as a child. If your club has simulators available for use in the winter, allow guests of members to pay-for-use and accumulate credits towards their entrance fee if they decide to join in the Spring.

This article was authored by Ben Hopkinson, GGA Senior Associate and research-and-insights specialist. 

Executive Search: Head Professional at Earl Grey Golf Club

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HEAD PROFESSIONAL
EARL GREY GOLF CLUB

Earl Grey Golf Club:

Following and respecting the traditions of the past while providing facilities and improvements for future generations.

History:
Earl Grey was founded in 1919 by Major Duncan Stuart, a practicing city lawyer, who organized a group of people interested in playing golf. The original course, which consisted of five holes, was located on land leased from the C.P.R., south of and adjacent to the Earl Grey Public School in the Mount Royal district. The Club moved on two occasions, and in 1932, a twenty-year lease was negotiated with the City of Calgary for the present site.

Rejuvenation and Transition:
Improvements were made to the courses and clubhouse over the years leading to a transition to the current club designed to meet member expectations for the entire family. In anticipation of celebrating its 100th anniversary in 2019, the Club is conducting a facility wide rejuvenation. This started in 2015 with the development of a new state of the art Maintenance facility, the renovation of the 9-hole Par 3 Course in 2016, and now the renovation and renewal of the 18-hole Championship Course, Driving Range, parking lots and the build of a new Clubhouse and Professional Shop in 2018. With the addition of two HD Golf Simulators and a SAM Puttlab located in the Professional Shop, Earl Grey is positioned to be a leader in the industry. A new club and power cart storage facility is set to open in the spring of 2019.

There is little doubt that Earl Grey will continue as one of Calgary’s premiere family Golf Clubs and a choice of many for years to come. The new Head Professional has an opportunity to be a part of the Club’s exciting future.

The Position:
We are looking for a Head Professional reporting to the General Manager to oversee the Golf Operations of the Club. The Head Professional will deliver a consistently excellent member experience within the existing financial framework. The Head Professional will balance innovation with tradition as the history of the club is highly valued by Shareholders and members of the club. The anticipated start date is in January 2019.

The Head Professional will be responsible for the following:

  • The consistent delivery of a member experience commensurate with specified member expectations.
  • The supervision of the Golf Operation and Golf Operation Staff
  • Recruitment, training, development, performance management and leadership of Golf Operations staff
  • Preparation of the Golf operating and capital budgets.
  • Golf Operations Staff who report directly to the Head Professional and are responsible for the day-to-day activities and processes. Although the Head Professional will rely on the Staff to operate the daily activities, the Head Professional will be responsible for overall performance metrics and service.
  • Working with the Golf Operations staff, management team and various member committees, to develop and implement merchandising programs, club tournaments, leagues, coaching and lesson programs and outside events.
  • Purchasing, merchandising, sales and marketing, inventory management, and financial performance of all aspects of the Pro Shop.
  • Representation of the Club to members, staff and external agencies. The Head Professional is engaged in new member recruitment.

The initial key areas of focus for the Head Professional will be:

  • To complete the transition to the new Club facilities to maximize member use and benefit from renovation of the golf courses together with the new clubhouse in preparation for the Club’s 100 Anniversary Celebrations in 2019.
  • To maximize the Club’s primary revenue sources of membership recruitment and retention.
  • To understand the Club’s mission, vision and evolving culture though interaction with members of all categories. This will be essential in building and executing plans and services to deliver the member experience model.
  • To work with the General Manager in reviewing and potentially enhancing the current Club Strategic Plan.

Candidate Profile:
The Head Professional reports to the General Manager. Given the leading role this individual will play in achieving the strategic objectives of Earl Grey Golf Club, it is essential that the successful candidate possess the following core competencies, experience and attributes:

  • Class A member of the PGA of Canada with Head Professional experience preferred
  • Highly visible leader with friendly and outgoing personality, and focus on member service
  • An out of the box thinker determined to be innovative in the modern world of golf operations
  • A leadership style that lends itself to being the ‘face of the golf experience’.
  • An ability to work collaboratively with the active volunteer base at the club to achieve results
  • An understanding of a private member owned club culture
  • A demonstrated ability to manage all aspects of the Professional Shop retail business
  • Demonstrated ability to recruit, hire, train and motivate Golf Operations staff
  • Accountable for the implementation of the annual Golf Operations budget, monthly reporting and budget creation
  • Proficient instructor well versed in the latest club fitting and teaching technologies
  • Proven leadership, management and organizational skills
  • Excellent communication skills and the ability to work closely with the Management Team
  • Ability to organize and oversee annual golf event fixtures and programs including participation in the internal marketing and administration of the events and programs
  • Familiarity with Jonas software an asset
  • Ability to implement, enforce and maintain all policies, programs and plans as established and communicated through the General Manager
  • Ability to market, schedule and manage any external competitions and events
  • Provide support for prospective member sales, new member integration and membership retention programs
  • Maintain and promote a well-respected and professional image within the Club, the industry and community
  • A keen interest in continuous learning and professional development in the industry
  • A dynamic leader with the ability to build strong teams by motivation and leading by example. Has the ability to provide direction and expectations, performance feedback and recognition that leads to positive outcomes;
  • A self-starter and results oriented work style combined with excellent communication and interpersonal skills with all the Club’s stakeholders;

Compensation:
The Club will offer an attractive compensation package, commensurate with experience, which will include a competitive base salary and benefits.

Inquiries:
IMPORTANT: Interested candidates should submit resumes along with a detailed cover letter which addresses the qualifications and describes your alignment/experience with the prescribed position by Monday, November 26th, 2018. Those documents must be saved and emailed in Word or PDF format (save as “Last Name, First Name EG Resume” and “Last Name, First Name, EG Cover Letter”) respectively to: execsearch@globalgolfadvisors.com.

George Pinches
Director
Global Golf Advisors Inc.

For more information on Earl Grey Golf Club: www.earlgreygolfclub.com

On Message

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As a business, it’s important to step back at times and ask yourself the question: who am I talking to?

When it comes to local marketing, clubs can easily get caught up in getting their message out without really being aware of who they are aiming to reach. Sadly, this can amount to hurling words into the abyss in the hope that they will find someone relevant.

The fact is, it’s impossible to craft a truly compelling message if you don’t know who you are talking to. The key to effective messaging is targeting, and the key to targeting is thorough market research.

Internal Market Knowledge

Knowing your market starts with knowing your own club.

The first step in this discovery process is to build a clear picture of your current club members. Better understanding who and where your club is right now will help you to visualize who and where it could be the future, as well as tuning you in to areas of opportunity that exist around you.

This type of information from your members can be sourced from surveys, focus groups, suggestion/comment boxes, informal meetings with management or staff, or operational metrics tracked as part of a broader business plan.

What insights should you be looking for?

Member/Customer Information

  • Demographic profiles (age, gender, family composition, ethnicity, income level, other club memberships, political leanings, religious affiliations, etc.)
  • Home addresses (zip codes, secondary homes, distance from work, school districts)
  • Contact information (names of family members, email addresses, phone numbers, social media habits)

How Members Use the Club

  • Rounds played by segment and month/week/day/hour
  • Revenue by type
  • Amenity utilization metrics (fitness, dining, tennis, event attendance, etc.)

Understanding the habits, preferences, lifestyles, wants, and needs of existing members is invaluable, because it will enable your club to identify and target individuals with similar profiles to existing members.

This is the “low-hanging fruit” for clubs, and it is the first place you should invest your energies. If you have successfully sold to people of a certain demographic in the past, then there is a good chance you will have success selling to similar prospects in future. People are also prone to associate and identify with likeminded individuals, so these prospects will be drawn to your club if they see that they can relate to your existing members.

The next step is to use this data to build a picture of who is missing from your club. What market segments are you not connecting with? Is it female golfers, Millennials, fathers with young children?

Understanding who is missing at your club will teach you a lot about where your messaging may be letting you down. Depending on the demographic around your club, you may find that some of these missing segments are on your doorstep, and it is just a case of reaching out to them in the right way.

External Market Knowledge

Once you have learned all you can from within your club, it’s time to turn your eyes outward: who are your neighbors and who are your competitors?

What data should you be looking to gather?

Demographic/Psychographic Information

  • Demographic and income data
  • Details on lifestyle groups in your area (psychographics)

Supply/Demand Data

  • List of all competitors in your market area
  • Summary of service and amenity offerings at each
  • Collect data to quantify demand (golf participation rates, studies, visitor information etc.)

Local Market Data

  • Demographics on public websites like governmental or municipal agencies
  • Customer and demographic mapping through Google
  • Comprehensive reports available through sites like Tactician or Environics

Putting a ‘face’ to local market areas will provide pertinent insight to help define your targeted message. If the profile of certain local market areas doesn’t match that of club members, then you may be faced with making bigger changes to your messaging than you expected. Armed with this information you can adjust your communications strategy accordingly, or else decide that you could invest more fruitfully in membership recruitment elsewhere.

The club must also know who its competitors are – what they are offering, their strengths and weaknesses – in order to create a message that differentiates your club’s offering.

This type of external information can be sourced anecdotally from calls to neighboring club managers or through online reviews, backed up by qualitative data sourced through competitor websites.

By gathering the right market knowledge from both internal and external sources you will be equipping yourself for growth. Not only can you identify the “low hanging fruit”, but you can also target demographics that your club is missing out on. Your message will become stronger by understanding what separates you from your competitors, and also, most importantly, by knowing exactly who you are talking to.

This article was authored by GGA Senior Manager and Market Intelligence expert Michael Gregory.

Three Steps to Connect Marketing to Sales

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In theory, sales and marketing should be two of the most integrated and connected aspects of your Club’s operation.  The reality, unfortunately, is that in some businesses they are operating almost independently and singing entirely different tunes.  For the Club, what this divergence leads to is ineffective messaging and lost prospects.  The importance of connecting sales to marketing is clear, so the question is: how can we achieve it?

To understand how to improve this connection, it is first important to understand the difference between the two disciplines of marketing and sales.

Marketing is a management planning process; it is focused on the strategies and techniques of crafting goods and services, all the way from a concept to an end-product or service.

The sales process is focused on the strategies and techniques of convincing a customer to exchange their cash for that product or service.

The marketing process develops a perceived need for your product in the mind of a customer, and the sales process then allows the customer to satisfy their perceived need for your product by purchasing it.

Although separate and distinct disciplines, marketing and sales efforts must be carefully aligned to achieve their highest potential in generating a steady stream of customers for your Club.

Using this three-step procedure to connect your marketing to sales will put you on the path to generating more qualified prospects and selling more memberships.

Step One – Clearly Define Your Four P’s

Successful marketing captures your business through the lens of your customer’s needs – and the satisfaction of those perceived needs – by defining the “Four P’s” of your offering: Product, Price, Place, Promotion.

To test how well-defined your product is at this moment, ask each member of both your management and sales teams to give you their “elevator pitch”.  If those pitches are not identical, or if they are not focused on precisely what differentiates your Club from its competition, then you have work to do.

Defining your Product properly begins with your mission statement – the single sentence that describes why you exist.

Once you have that definition, you must develop your brand position – an expression of what makes your Club distinct, unique, and fills a particular consumer need in a way that none of your competitors can.

Your brand position is critical: If you do not understand what you are offering, neither will your prospects.  Even more disturbing is this reality: If you don’t define your product, someone else will, and you may not like their story.

After “product” comes Price, Place and Promotion:

Price is self-explanatory.

The definition of Place is a clear analysis and understanding of the specific target audience for your product, and the tactics you have selected and employed to reach that audience.

Your definition of Promotion is the complete list of methods you will use to broadcast your product to your audience – for example: brochures, a website, mobile apps, print or digital ads.

With your “Four P’s” clearly defined and in hand, let’s move to Step Two.

Step Two – Singing from the Same Sheet Music

Step two along the path to connecting marketing to sales is teaching your team, particularly your sales force, to “sing from the same sheet music”.

To do this you will need to train your team to:

a) be comfortable with presenting your Club according to this script

b) understand the importance of presenting a consistent image and message when promoting the Club in the marketplace

Consistently reinforce and remind your staff of its importance in all employee communications.  You could do this as part of your email signature, through a notice on employee message boards, or verbally during employee meetings.  Just as consumers are bombarded with over 3,000 messages a day, so are your employees.  Make sure it’s your message that sticks.

Constantly encourage employees to share how and when they have promoted the Club and reward them with both private and public recognition for their efforts.

With your marketing in place and your implementation team deployed, it’s on to Step Three.

Step Three – Track, Analyze and Adjust

Your Club is now positioned consistently across all communication channels and your employees are all singing from the same sheet music, but how do you know for certain that marketing is now connected to sales?

The answer is through data collection and analysis.

  • Ask consumers where they learned about you when they visit or call the club
  • Incorporate unique URLs and telephone numbers into published advertising to identify what technique connected with what specific audience
  • Google analytics provides a wealth of data about prospects who have visited your website: where they visit from, what pages they visit, how long they spend on your site and more
  • Social media sites also provide data on likes and engagement
  • Tracking pixels can also be added to emails and webpages to follow the activities of users

Review and analysis of this data will expose what is working and what needs to be adjusted to create maximum impact.

The combination of a clear and consistent Club message, the effective broadcast of that message to your target audience, your sales team singing the same song, and close attention paid to what is working and what is not will connect your marketing to sales – providing a steady stream of qualified prospects to your door and new members to your Club.

This article was authored by GGA Senior Associate and Marketing expert Linda Dillenbeck.

The Revenue Menu

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At a typical golf club, who should be involved in building revenue for the club?

Building revenue is a part of everyone’s job at a club.

If you are a leader, it’s important that everyone under you shares your vision to increase sales.  That necessitates good communication, as with any efficient team, but if all areas of the club are on the same page when thinking about how best to benefit the bottom line, the results will speak for themselves.

They say no man is an island, and no part of your club operation is either.  If you want to build revenue, it needs to happen at all levels of your business.

How can a club encourage all levels of the operation to be thinking about revenue growth?

Attitude always reflects leadership.  If the leader’s attitude is demonstrated in a commitment to increase revenue, most subordinates will embrace the importance of the task.

Therefore, it is incumbent on team leaders to teach staff, not just what to sell – which goods and services yield the most profit margin for the Club – but also how to sell it.

Often staff members are enthusiastic about developing new skills and all they need is guidance.  The truth is, few among us are natural-born salesmen, but selling is a skill that can be learned.  Think about investing in a professional selling skills program to train the club’s staff, and the selling strength of the club will expand immensely.

How should the operations team decide on which revenue sources to focus their energies?

A great way to get the ball rolling is to create and use a ‘Revenue Menu’.  Think about all of your available revenue sources, list them out, and leave no stone unturned.

You will want your team to focus on what yields the most to the club and sell high-yield items as much as is reasonable; however, it is also important that each staff member knows all of the products and services that they can offer a customer.  This way, when the high-yield items are not appropriate they can move down that list.  It all adds up: if you don’t get the little money, you won’t get the big money.

Membership dues and guest fees are high-yield segments, as are fees for motor carts and range balls, and these are usually the best place to focus first.

However, one notable exception to the notion of focusing on high-yield products is instruction.  When people commit to becoming better golfers, they use the club more often, feel more loyalty towards it, and make it a priority in their thinking.  Helping others to enjoy golf more through instruction is a sound business approach.

What are some of the key tactics that should come from any “Revenue Menu”?

  • Membership dues and fees will be the primary source of revenue for most clubs, and should always be a priority.
  • Items that have little cost of sales attached to them such as motor carts and range balls.
  • Increase rounds played through non-dues golf rounds (guest play) and events.  This should be a priority for every pro.
  • Win the kids and you win the moms; win the moms and you win the game.  Treat children well – it’s good business.
  • Reward customer loyalty, but reward it only when you get what you want (e.g. buy 10 buckets of balls, get one free, etc.).
  • Cause customers to earn discounts.  When you do a points program at your club, be sure it doesn’t become a problem with customers looking for more.
  • Make instruction a priority.  Revenue comes in different ways, not only directly.

The key is that your Revenue Menu needs to be a living document, not just a one-time event.  It’s important to follow and map the items on your menu to see how they are performing.  This allows you to adjust your tactics as you move forward and discover which items are more fruitful investments at your club.

This article featured insights from GGA Principal and Partner Henry DeLozier. 

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