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“Nowadays people know the price of everything, but the value of nothing.” – Oscar Wilde
Oscar should have been a golf marketer! But in reality, what exactly are the values that we are trying to sell in the business of golf when it comes to membership and rounds of golf?
Most cars are bought, not because of their price, but because of how they meet the needs of the buyer, and for many it’s the cachet of the brand and how it presents itself to its target markets.
People will purchase supermarket house labels only on the basis of price, and the brand’s value with this type of purchase is simply not a consideration.
Most of the golf facilities that I have worked at or dealt with would prefer to reference their product against a top-brand car, rather than a can of no-name baked beans, which suggests that discounting should not be something that is the norm … but still too many clubs see this as the route to take.
If there are actually no real differences in terms of quality, facilities, etc. between two adjacent golf clubs, then price might well be the only differentiator. However, in this the first step should be to creatively package up the rounds rather than engage in a price war, and there are very good reasons for this. An excellent example of companies that engaged in a price war, without circumstances really requiring them to lower prices, would probably be that between Walmart and Amazon at the end of the first decade of this century.
The first salvo in the conflict was Walmart reducing the prices of its top ten bestselling books to $ 10.00, following which Amazon, in a tit-for-tat reduction in price to match Walmart, dropped its price to better this. With Target’s entry into the fray, the price then went down to reach an eventual low of $ 8.98.
Retailers can buy books from publishers for about 50% of the retail price, so at this price level, all of these retailers were losing money on every book sold.
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The strategic motivation could have been: “If we are losing money on each sale, let’s lower the price even more to increase sales volumes and steal business from our competitors.” This just makes no conventional business sense, unless you have massive inventories, and underlines the point that in a price war, almost always, everyone will actually lose, especially the smaller retailer.
The facts are that for giant retail operations, sales leading to direct losses on the discounted items will in the medium term not hurt their overall business, even with these types of ‘suicidal’ discounts, especially when the real goal is to expose customers to other items in-store and online, which they might not otherwise have seen.
This book war did in fact help Walmart, Amazon and Target in this respect, but anyone with shallower pockets can only lose out in this type of retail pricing conflict.
We are being exhorted by marketers to:
- Sell the brand and not a product
- Accentuate the value and not just the price
- Package up the unique features
- Protect the brand integrity
- Think like a customer
What do they mean, and are these just more marketing and promotional buzzwords and ‘silly’ nonsense phrases like ‘picking low-hanging fruit’? This is nonsense in terms of the latter because, as any orchard owner will tell you, that lowhanging fruit will be the last to ripen and all we need at this point is another load of sour apples!
If we take a step back and a deep breath to look at the golf product objectively, then parallels with standard retail environments will begin to emerge:
Growing the participant (customer) base: Golf estates, for example, should actively promote the game to its own nongolfing residents, irrespective of whether they are homeowners or not, and surrounding communities that do not have a golf course.
Sustainability: Every golf facility, especially in Africa, will need to find groups and communities who have the income levels to sustain an interest in a game that will never be a mass-participation street game like football.
Business partnerships: Form associations with businesses, such as hotels, through which the partners can then promote themselves as being golf destinations or as having golf packages. Create new levels of reciprocity by partnering up with ‘like’ facilities in order to offer something that cannot be found anywhere else, and amplify this by having special events and joint memberships, and then reinforce the unique value of the proposition with actual value and support activities that reinforce the expectations.
Membership retention: Give the membership what it wants. Price is a sensitive area at the moment, but in many cases golfers leaving the game are in effect voting with their wallets, especially when it comes to the continued growth of virtual clubs and golf societies.
Attitudes and management methodologies: Perhaps in this area an analysis of what attitudes haven’t changed might be productive, and it is still very discouraging to see how many golf clubs have pettifogging rules about ‘attire’, which just don’t fit in a world where dress has become noticeably more casual in most walks of life. Management methodologies and committee attitudes are also still depressingly ‘custodial’, when the situation demands innovation and calculated risk taking. If your management team doesn’t have these attributes, then upskill them, or use consultancy services to fill the gaps.
Creative rounds and brand packaging: Find ways to dispose of potentially ‘distressed rounds’ inventory and use these down times creatively to leverage better value packages into the marketplace.
Offer interactive branding packages to potential sponsors, advertisers and brand partners. In doing this, assess and understand exactly how your club’s channel functions in terms of the player and guest flows through it, and what activities and areas will suit each target brand partner the most effectively.
