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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 vehicles are bought, not because of their price, but because of how they meet the needs of the buyer and, for many, the cachet of the brand and how it presents itself to its target markets.
People will purchase a supermarket chain’s ‘own brand’ labels, solely on the basis of price, and the brand value with this type of purchase is simply not a consideration.
Most of the golf facilities that I have worked at, or dealt with, over many years, would prefer to reference their product against a top brand car, rather than a can of no-name baked beans. This attitude suggests that discounting a core revenue stream, 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 a marketing sense, and if revenues are down, the first step should be to creatively package up the rounds, rather than engaging in a price war, and there are very good reasons for this.
An example of companies that engaged in a price war, in this case without circumstances really requiring them to lower prices, would probably be that between Wal-Mart 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 best-selling books to $10.00, following which Amazon, in a tit for tat reduction in price to match Wal-Mart, dropped its price to better this. With Target’s entry into the fray, the price of each book then went down to reach an eventual low of $8.98.
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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.
The strategic motivation could have been that “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 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, even the customer, and especially the smaller scale 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.
This is true, even with the types of ‘suicidal’ discounts seen in our example of the ‘book war’, especially when the real goal is to expose customers to other items in-store and online, that they might not otherwise have seen.
This books’ war did in fact help Wal-Mart, Amazon, and Target in this respect, but anyone with shallower pockets can only lose out in this type of retail pricing conflict.
When 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 these terms actually mean, and are they relevant, or just more marketing and promotional buzzwords and hackneyed phrases like ‘picking low-hanging fruit’? – generally the last to ripen and therefore a ‘no-no’, when the last thing we need is another load of sour apples!
If we take a step back, and look at the golf product objectively, then parallels with standard retail environments will begin to emerge:
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Growing the participant (customer) base:
Golf estates for example, should actively promote the game to their own non-golfing residents (irrespective of whether they are homeowners or not), and to surrounding communities, which do not have a golf course.
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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, which will never be a mass participation street game like football.
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Business partnerships:
Form associations with businesses, such as nearby hotels, through which the partners can then promote themselves as being golf destinations, or as having golf packages, to their respective client bases.
Create new levels of reciprocity, by partnering with ‘like’ facilities, in order to offer something that cannot be found anywhere else.
Amplify this by having special events, joint memberships and then complement the unique value of the proposition, with extended value and support activities, which reinforce the expectations.
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Membership (customer) retention:
Give the membership what it wants – remember that we are actually in the hospitality sector, where golf is an element in the overall menu of offerings.
Price is a sensitive area at the moment, but in many cases, golfers leaving the game (or your club) are in effect voting with their wallets, especially when it comes to the continued growth of virtual clubs and golf societies.
In many cases, the player’s departure is motivated as much by lifestyle needs, and the club not fulfilling these, as it is by price considerations.
In a recent discussion with me for BG Magazine, David Christie, the Director of Golf at Eagle Canyon, made the following very valid comment –
“Quite honestly, I believe that the members will tell you everything you need to know, about how to run the business best in terms of what they want – all you have to do is listen!”
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Attitudes and management methodologies:
Perhaps in this area, an analysis of what attitudes have not changed might be productive.
It is still very discouraging to see how many golf clubs have pettifogging rules about ‘attire’, which just do not 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 often demands innovation and calculated risk-taking.
If your management team doesn’t have these attributes, then up-skill them, or use consultancy services to fill in the gaps.
Just because the controlling bodies are too slow to see the PR damage that making amateur golfers play out of someone else’s divots on the fairway is causing, doesn’t mean that we should have similar holes, in terms of our off-course service levels and marketing activities!
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Terminology:
In this area, how a club sees its non-members, can be very indicative of its attitudes towards this category of player.
Member, guest, member-guest, visitor, etc. are all commonly used terms, and without being prescriptive, I would suggest that clubs think about their categories in terms of those used by successful retail stores.
For example, Harrods department store does not have members, but it does have customers, some of whom it refers to as VIPs, loyal or frequent customers, in much the same way that hotel groups refer to their guests.
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Creative rounds and brand packaging:
Find ways to dispose of potentially distressed rounds’ inventory, and or use these downtimes 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 channels function in terms of the player and guest flows through them, and what activities and areas will suit each target brand partner the most effectively.
