Giving Away the Keys to your Golf Course Inventory
In article one of this series, I provided an example to showcase the thought process behind entering into a relationship with a company whereby a club had to give away the two most important aspects of its future growth for access to a large new network. These aspects were:
- Ownership of a Club’s Customer Information
- A Club’s lowest price in the market
The golf industry’s most important customer is the one that has booked a tee time at their facility. Club’s that take active measures to collect customer data and build remarketing strategies will deliver two important changes to their facilities:
- They will be creating a stickier customer. A person that may play 1x per month will gradually move to play more of their rounds at a club’s facility.
- A club will have a much stronger ability to book these customers when/where/and for what price it makes sense on their tee sheet.
Point number two, speaks to a process that is vital to any club owner/operator to understand its profitability. Internally, we call it RCA or Rate Channel Analysis (aka Rate Flow). The RCA process will give an operator a true understanding of their rates being offered and consumed, the margins associated with each rate category, and most importantly the average dollar per round in day parts or demand windows of a club’s tee sheet.
A Rate Channel Analysis paired with a REVPATT (revenue per available tee-time) report is the process by which a club can define its true opportunity cost. This is also the process that will provide any operator the ability to place a true cost structure on any barter relationship they may enter in. The process does require an organized tee sheet and accurate data of how rates flow to a tee sheet.
If you barter, and the majority of the times that are traded are moved during highly profitable day parts in a club’s tee sheet or during high demand windows then understanding where these trade times are cannibalizing your opportunity for revenue is essential in examining your effective cost structure for a barter relationship.
When you give the keys to your inventory to a third party you relinquish the following abilities:
- Opportunity to own the customer data
- Give away the ability to solely remarket to your customer
- Give away the ability to compete on price for your product. This creates price loyalty in a channel the club does not own.
- To protect your customers from being introduced to extremely low-priced competitor pricing
Below is an example of an offering made for a Brown Golf property previously. GolfNow offers “hot deals” on its platform. It is likely when you see a “hot deal” it represents inventory that GolfNow owns. Here is a “hot deal” that was offered on golfnow.com:
The inventory is priced and positioned to move. The golfnow.com platform is positioned in a way that customers can search for many different inputs including searching for just “hot deals”. If your club is sold out of “hot deals” on a particular day there could be a close competitor in your market who still may have an attractively priced “hot deal” to move.
As an owner or operator is that a scenario you are comfortable competing in? What kind of long-term impact can be felt by introducing your customers to a platform that collects their data, offers them a lower price, and promotes your competitors?
The first steps to taking your golf back are:
- Analyze your rate flow and eliminate any category that is under-performing.
- Ensure the club is collecting your customer data through an automated process. Do not give that opportunity away. To simplify, make sure you and you alone own the customer information collected via a booking engine on your own website.
- Automate the process for remarketing to your customers. This is not an easy step, but there are solutions and companies out there that will assist. Look for a cash priced option that can take the data you are collecting and allow you to setup an automate process for marketing via email, social media, SMS, and apps.
- Offer a competitive and attractive price on your website to drive traffic and awareness. A club needs to own its lowest price in the market and offer that price in a channel they collect customer data. Customers are smart and they will always find the lowest price.
The above principals are the foundation to allow an operator to setup its business systems for success long term. If you think about the glory days of golf in the 90’s and early 00’s tee times were almost exclusively booked via the phone.
The phone guaranteed that operators controlled the rate flow, and the phone was the only opportunity to find the lowest price point for a club. The above recommendation takes in those two principals and it adds data collection and remarketing.
If you focus on these principals you will be on a path to take your golf inventory back.