Data Driven - Winning in the Golf Business

I played the Golden Bear Club in Orlando today. It's outstanding. 

My friend just joined the club and he's super excited about playing more golf with his friends out there right now. It's the ideal time for the club (if they were hurting for members) to engage him in actively referring his friends to come out and experience the club with him - and possibly join as well. 

Fascinating to see the power of the 85/50 program in action from the member's standpoint. 

In today's Golf Course Owner and Operator's Forum, we're discussing how to market your golf facility.

I'm leading a discussion on strategies that golf courses typically fail to consider. Golf is what we call a "Considered" buying process. The time it takes to usher someone along the customer lifecycle from stranger to loyal customer is often considerable - 2 to 6 months or more.

Data in the golf industry is completely fragmented. There are more than 20 major point of sale systems (think cash registers with accounting software)...and they don't speak the same language.

There's really no system of aggregating and using big customer data in the golf business...until now.

KPI Consult is leveraging tools called Hampton Connect to allow clubs to track, measure and leverage real-time performance data to improve club operations. Club operators have access via phone app anywhere, with the ability to make metrics-driven decisions every day all day.

All things equal, there's simply no way that a club without this kind of solution can compete with those deploying true data-driven execution.

At the core, KPI Golf is built around the principle that golf courses serve as the epicenter of the communities in which they reside. The local living environment goes the way of your country club - jobs, recreation, real estate values, quality of life.

This is a story of how we have chosen to model our company - giving without expectation of anything in return.

I lost my wedding ring in the ocean this weekend.

We were on a family trip to Southwest Florida. We were staying at a beachside rental in Englewood, just south of Sarasota.

Our family is very close, and we always have a great time together, laughing and playing games. Well, the silly game that we came up with this time was volleyball...or a modification thereof. We basically all stood in a circle and tried to keep the ball going (we're terrible).

After we were finished, as I was toweling off I realized that my wedding ring was gone. It feel off my finger in the middle of the ocean while we were playing. The story that ensues is a true representation of giving without any expectation whatsoever...and a ton of luck.

Our friend John, who we met randomly on that beach modeled exactly how we have chosen to conduct our business. Intent matters and the outcome is always positive.

Cheers

The private club model is changing. In the past, exclusivity and privacy was highly touted. Nowadays, younger generations don't look nearly as favorably on these kinds of policies and clubs in general - of course there are elite exceptions.

Most golf courses are working harder and harder to attract and retain membership.

KPI Golf's 85/50 Membership Program was developed by John Brown through his work with Troon Golf and as he build his prior golf course management company - Brown Golf Management.

In this podcast, John outlines the key components to deploying this proven successful recruitment strategy.

The 85/50 program is about engaging your newest members to become your most important evangelists for the club. The sooner you can engage these members in the recruiting process, the more likely you are to succeed.

By creating a structure where new members are encouraged to invite their friends to experience the club, close rates are greatly increased. It's play on social proof and the natural inclination for people to justify the decision they made to join the club.

It works.

If you’re 20 or 30-something and you don’t know how to play golf, you’re making a huge career mistake. All the old dudes running companies are retiring and play more golf than any other part of the population right now. It’s not going to last forever though.

When you play golf with someone, you’re got a captive audience for 5-6 hours. All these retiring business owners and execs still have all the networks and connections they’ve accumulated their entire life. You’re one fun day away from the keys to the castle.

Learn to play golf for your career…simple as that. If you’re not getting invited to company tournaments, you’re missing out on more than a fun day in the sun. You’re not in the room and you’re not moving up the ladder my friends.

We had a great 2019 PGA Show.

KPI Golf struck an incredible collaboration deal with MG Orender and Hampton Golf to deliver their new Hampton Connect club management software to the market.

John Brown and I go over some of the cool things we did and saw last week at the Show as well. We found some really fun devices making golf more fun. We also got to meet with a ton of equipment vendors and hit all the new stuff.

Give a listen and please share the podcast if we’re delivering any value at all! Cheers.

The Free Golf Lesson Marketing Plan

Our free golf lesson program is designed to completely change the way that golf instruction is deployed as a marketing tool for country clubs. Below, I have outlined the business case for free golf lessons as the gateway for newcomers to take up golf at your facility. 

Golf instructors typically work as independent contractors, providing lessons to members and guests. We believe that this system lends itself to misaligned objectives between the instructor and the facility. The instructor is trying to maximize lesson rates and build a business for themselves. Golf courses tend to consider golf instruction as a paid amenity offered to their current golfer population - not as a significant sources of new business generation. 

We believe that basic golf instruction is the ultimate gateway into the world of golf. Beginners are afforded a low-cost or no-cost opportunity to learn the fundamentals, plug into the social environment at the facility, meet the staff, and begin to feel comfortable using the club as a place of primary recreation.

This “indoctrination” only occurs after many iterations and practice sessions. Beginners need these “touches” to have the chance to build their skills, meet new people, and begin building personal relationships. 

At standard lesson rates, especially for families, this learning process can be extremely cost-prohibitive, especially when compared to all of the other recreational activities that exist in the local marketplace.

To be clear, free lesson programs require club ownership to deploy a longer-term mindset. Newcomers to the game do not yet know how to play golf, nor do they have a strong social network  at the facility. They spend far less money than avid golfers. 

Over time, as we have documented, the long-term returns to facilities far exceeds that of an hourly rate which would otherwise be charged for paid lessons. These returns come in the form of additional lessons, green fees, food and beverage spending, referral business, membership  sales, equipment purchases, and the like.

John bought his first golf course at the age of 23. Ever since, he's been involved with owning and operating golf facilities of all kinds around the country. In this podcast episode, he discusses the great things about club ownership as well as the downside that comes with it.

Either way, in his 5th decade in the business, John's always got interesting things to say and value to bring.

Club Ownership: The Good

On the good side, John takes tremendous pride in the positive feedback he gets from his work. Of course verbal testimonials and "thank you's" are great, but simply becoming a repeat customer at John's facilities is probably the best vote of confidence anyone can give.

Golf courses are typically one of the primary centerpieces of any community. They provide jobs, recreation, green space and a genuine source of pride in many ways. Property values are affected by a golf course's reputation.

John explains that the rewards of ownership can be immeasurable. And as the owner, you get to do it your way...which is great by him as well.

The Bad and the Ugly

Of course when you're the one in charge, you're the first one in line when things go bad.

All the upside that a community sees with a thriving golf course can be quickly reversed when the club is struggling. Real estate values plummet, people lose their jobs, conditions and course reputation declines, and lots of people get grumpy.

John explains, "When golfers don't like the value they're getting for their money, they're usually not afraid to let you know about it".

It can be extremely stressful when golf courses are underperforming because golf clubs are not like ordinary businesses. When a restaurant fails, sure it affects ownership, staff and vendors. But when a golf course fails, the effects are far more wide reaching.

The stakes are extremely high. As an owner, you're either the beloved hero or the hated goat. Certainly not for the faint of heart.

3 Keys to Company Culture and Empowerment

In the end, John discusses customer service and the value of company culture. He feels that it's simply not possible to grow and thrive as a business without a positive working environment. Here are the 3 keys he emphasizes at every one of his properties:

1. Hire Well - Do your homework and hire people who are nice. Nice people get along well with the team and will more likely sign up to learn and grow in the job. It's that simple. Anyone can be trained to do the tasks required, but not everyone is nice to others. If you make a hiring mistake, fire quickly. The team comes first...even before customers and definitely before the interests of ownership.
2. Fix Problems Fast - Don't let anyone get away unhappy. They're not likely to come back, and they'll probably tell their friends about their lousy experience. If a customer is upset, the team needs to address the issue fairly, yet aggressively to ensure that the customer knows that the club cares about them.
3. Empowerment - The only true way to fix problems fast is to empower staff to make decisions and execute. Hire well, train well, then let them do their thing. When mistakes are made, it's important to learn. It's also important to let your team know that you have their back and they won't be punished for honest mistakes.

Country clubs bringing in outside management do so in one of two major ways:

1. They recognize they need help and expertise to help them move forward optimally.

2. A firm offers to inject some capital over time in exchange for ownership stake in the club (equity vs. non-equity).

Potential Pitfalls of Hiring a Golf Management Company

Country clubs bringing in outside management do so in one of two major ways:

1. They recognize they need help and expertise to help them move forward optimally.

2. A firm offers to inject some capital over time in exchange for ownership stake in the club (equity vs. non-equity).

Problem with number 2 is that over time, when the capital improvement money “comes due”, the members are subject to cost cutting tactics that markedly deteriorate the quality of the experience and the club itself.

Members find that they no longer control the club. This is a far worse circumstance, and is often inescapable.

Visiting my parents in Southwest Florida this week. Their golf community lost their golf course a couple years back and it’s super sad to see.

All the residents came here for social golf, sunshine and fun…now they have to take their games on the road.

I talked with a group of them about strategies for underperforming clubs and how things could have been different.

The Tragedy of Golf Course Closings

Visiting my parents in Southwest Florida this week. Their golf community lost their golf course a couple years back and it’s super sad to see.

All the residents came here for social golf, sunshine and fun…now they have to take their games on the road.

I talked with a group of them about strategies for underperforming clubs and how things could have been different.

What Lessons Can Be Learned?

Well, the truth is not all golf courses can be saved. This club was owned by an individual owner/operator who seemed to be extracting as much short-term profit from the operation as possible.

There was lots of debt and probably no feasible way out. He claimed bankruptcy and a lot of people got hurt - vendors, members, employees, and the community.

I wish we had been able to have discussions with the owner several years back before they reached that point of no return.

Now, I know all owners aren't in it for the best of reasons...and it sounds like this one falls in that category - although I'm only hearing one side of the equation (lots of sour grapes of course).

I do know that a golf course turning to tumbleweeds is NEVER the highest and best use of any property. I Believe There Are Lots of Solutions

I feel very strongly that we could have helped this club. It sits in a growing and thriving local market, with minimal competition in their price/value range.

It's apparent that there was little to no effort expended to seek out marketing opportunities and to drive new new business in the door. The owner wasn't present, wasn't well liked, and the culture at the club was lacking...I'll say pride with staff and many members.

Poor culture is really hard to recover from...and it comes from the top. Beyond reviving the culture, some good old fashioned marketing would have had big impact. Anything at all would have brought reasonable ROI...the market is rife for value-based golf here.

Literally executing ANY marketing at all could have saved this club...never mind something clever, calculated and data-driven. There still is not a comparable club within 15 miles with a population of over a million people.

Sometimes it's just about moving in some sort of direction...even if it's not perfect. It could have saved the club in this community.

There is no solution that allows for anything other than constant oversight and management. This is because conditions, economies, market positions, competition, and consumer preferences are always changing.

The only way to compete is to evolve with the times. Golf courses are quickly finding that they are not different.

There is No "Set and Forget" Strategy

The only way to perform optimally is to stay diligent and continuously prioritize highest impact activities.

There is no solution that allows for anything other than constant oversight and management. This is because conditions, economies, market positions, competition, and consumer preferences are always changing.

The only way to compete is to evolve with the times. Golf courses are quickly finding that they are not different.

The First Tactic Isn't Always the Best Solution

John shares how his team's initial assessment of this North Carolina club did not uncover the biggest wins.

Their focus was on membership and driving rounds and revenues for the first 6-12 months they owned the club.

Upon deeper inspection and market research, they determined that other areas of the club presented tremendous opportunity. The wins were certainly disguised as there was considerable costs to unlock these assets.

Good market timing, smart planning, and aggressive negotiation allowed the group to perform significant capital improvements at minimal costs.

The returns were exceptional. Listen to the podcast discussion to hear more.

When I go to Germany every summer, the days are very long. The sun rises around 4:00 am and sets around 10:30 pm. Golf courses over there have come up with a very creative (and simple) solution for bringing in revenue during those odd hours of the day when nobody is working.

Creative Sources of Revenue

When I go to Germany every summer, the days are very long. The sun rises around 4:00 am and sets around 10:30 pm. Golf courses over there have come up with a very creative (and simple) solution for bringing in revenue during those odd hours of the day when nobody is working.

Deploying Trust

The first thing I noticed in Germany, is that they deploy an incredible amount of trust in people. Basically, if you want to play golf really early or really late, you can just come and walk on the golf course. No carts of course.

They’ve got a lock box where you fill out an envelope and leave your green fee for the staff to retrieve when business opens.

Funny, you would think the place would be overrun with freeloading walk-ons, but it’s not. The culture that exists is one of pride in their club, and nobody would ever want to risk being branded a thief or a cheat.

It works.

I’m not saying this strategy would work everywhere, but it’s absolutely a plan that some clubs should consider seriously.

We've been living in a thriving economy filled with a huge wave of avid senior golfers for the past 5-10 years. That's not going to last forever. Golf course owners need to aggressively push for winning market share in their local competitive set...or they'll lose when things shift. We're talking strategy and tactics for winning in the next downturn.

We're Living in a Bubble

Based on the fact that the economy has been great over the past 9 years, AND we've got a huge wave of Baby Boomers playing more golf than ever, golf should be thriving.

In fact, if your home course isn't killing it right now, look out when the market turns.

Now is the time to grab market share and prepare for the storm ahead. Because when the market kicks us in the face, and when seniors really start aging out of the system, your course better be ready.

The Best Marketing Asset for Golf Courses

By far, the best (and underutilized) marketing asset for golf courses is golf instruction. Prices for lessons are going up because the interests of individual instructors is not aligned with the interests of the clubs they serve.

$150 lessons don't appeal to newcomers or old timers at all. These are the groups that golf courses need to attract and retain respectively.

Those first to market with golf lessons brought in-house and offered for free will win the lions share of the marketing spoils that'll come with it.

But nobody's moving out of the box...until the day comes when the music stops...

KPI's John Brown and Casey Bourque discuss the advantages of golf course clustering for golfers, staff members and for operators. According to John, this was a hugely successful strategy that helped many of his managed clubs in the past. Whether it's buying power, shared supplies, or improved opportunities for customers to play golf, clustering is a great idea.

From a Player's Perspective

The advantages for golfers when multiple golf courses team up is obvious. We get more holes to play golf on for our money.

What's really cool is that when one course is closed for business because of a tournament or course maintenance procedure, we've got other options. Not only that, golf is just more fun when you have more variety...otherwise it's just too easy right?

From an Employee's Perspective

Local clusters of golf courses are a marvelous thing for employees. First, there's not nearly the "glass ceiling" effect from a career standpoint as compared to working at a stand alone facility. This means more options, more diversity and more upward mobility.

At a stand alone club, if you're working under a career general manager, you'll probably never become the general manager yourself.

As a result, multiple golf courses grouped in synergistic clusters are able to recruit stronger talent and retain staff longer than single clubs ever could.

From an Owner/Operator's Perspective

Beyond the 2 big reasons listed above, owners reap the biggest rewards from golf course clustering under centralized management.

When it comes to buying products and supplies, clustered golf courses represent a much larger book of business, and therefore can negotiate advantageous contracts and pricing.

Additionally, there are often opportunities to share supplies and equipment between facilities. For example, 5-6 golf courses could easily share a greens aerator, golf carts for events, or even key staff members as needed.

There are enormous opportunities for economies of scale and cost containment under the right circumstances - even beyond the tremendous scale that can be achieved through a proficient golf management company.

The Private Club Model Isn't for Everyone Anymore

KPI Golf's John Brown discusses a special private golf club turnaround in Hilton Head, South Carolina.

This private club had been operating as a private golf course for over 30 years until the club was beginning to lose members.

The net loss of members was caused by standard attrition and people aging out of the system, but the club's mistake was that there was no marketing structure in place to replace them.

Data-Driven Decisions are Key

John and his team began with some exhausting market research and an analysis of the club's "play footprint". He quickly realized that 94% of the club's member rounds were being played on Tuesday, Thursday and Saturday.

By virtue of the data John and his team was able to compile, they were able to achieve buy-in with the club's ownership that changes needed to be made. They bought the club and elected to covert the structure to a unique hybrid system.

The club was private on Tues, Thurs, and Sat...and open to the public on the other days. This wonderful solution meant that almost all members were given their preferred times on preferred days. Filling in the gaps with outside play brought a tremendous revenue windfall for the club.

Today the club is thriving.

Devil is in the Details

In this conversation, John gets into some of the details of the execution of this plan and how staffing played a pivotal role in the club's transition.