Surviving the recession bunker

Golf Clubs need to rise to the challenge… collectively.

I am very lucky. Within a 10 mile radius, I am spoiled for choice re golf club spanning the exclusive to pay-and-play ones and everything in between.    It’s been nearly two years since I took up golf, and my mission is to play as many courses as possible.  I have ticked off some of these clubs in my catchment area and have had different experience at these clubs.

As I read about how clubs up and down the country are struggling during the recession, with my management consultant hat I am tempted to do a Porter five-forces model to the industry.  However not wanting to complicate the issues, I have donned my ‘shoes of the customer’ and penned down my top five things that clubs could do to prevent the downward spiral fuelled by recession, customer attrition, onslaught Internet voucher etc

  1. Know thy competition:  In the current recessionary times, golf clubs need to understand that they are not competing against other clubs in the area.  Golf is competing with ‘other choices in the household basket’.  Golf can be seen as a discretionary expense for most amateur golfers.  GCs need a change of mindset to understand this and therefore refocus their efforts to make it easier (not always the cheapest) to entice golfers to visit them more often.
  2. Know your customer:  Getting more people involved in golf is going to be fundamental in securing a long term sustainable future of the game.  Golf can be intimidating for a newbie; GC can help soften this image.  A number of options are currently be trialled e.g. 12 hole games, 9 hole course, Tee-it-forward, Wide-Open etc.  Forward looking GCs can trial or adopt some of these.  Easier options of relaxing dress codes, free wi-fi in the club house, a health club or a kids’ corner and schemes to engage the whole family rather than just the male golfer would go a long way to get more golfers in.  Anyone sparing a thought around what can the WAGs and kids do when daddy wants to go wants to go and play golf?
  3. Offer choice:  Where clubs can, GCs should partner with other clubs within their area – a form of cooperative competition or Coopetition as it is known in management circles. If clubs are part of a group, then club members could be given free access to the other clubs in the group.  If not part of a group, then GCs could team up with other GCs and offer reciprocal preferential green rates or work with their county golf association on county cards.
  4. Simplify membership: As a weekend golfer, I see no value in joining a 7 or a 5 day member that most clubs traditionally offer.  I have seen instances of ‘executive memberships’ that try to address this gap, but need to see more of these around.  On the subject of memberships, am not convinced of the idea of creating a barrier to joining by asking for high ‘joining fees’; which are increasingly being waived by clubs. If you are going to waive it, then why ask for it in the first instance? These days, Membership (and green fee) options seem to be like Railway ticket prices – more options and restrictions than what a common man can understand.  Remember, most golfers cannot count beyond a double bogie on a Par 5, so simplify!!
  5. Improve stickiness in the pro shop:  Most golfers tend to research before buying big ticket golfing items.  They know the cost of clubs, balls, gps etc before they look at the sticker price in the pro shop. Some pros will match Internet or High street prices and therefore keep the stock moving.  This is a good move, since it keeps inventory turning over and avoids the loss via end-of-season-sale. One strategy for GCs to capture this market would be by giving away free driving range credits on loyalty cards based on pro shop purchases – a clear differentiator for clubs over Internet or High Street providers.  Similarly, there are several instances of Pro shops leveraging their PGA status on Internet sites like eBay to sell kit – a great way to provide peace of mind against counterfeit golf kit.  GCs could do more by empowering pros and shop assistants to cut deals on kit or green fees that recover cost rather than deliver an absolute margin on investment.

Golf clubs need to monetise multiple revenue streams while addressing underlying fundamentals around competition and customer demand.  Besides looking at their peers, they need to rethink the business model and look at other industries for inspirational ideas.  In some ways, golf clubs can draw parallels with the airlines industry. Both have significant sunk cost either on the ground or in the air and both are selling a perishable commodity.  Each plane ticket must be sold before a flight takes off, just as a tee slot has to be sold before the tee time—so it’s in the interest of the GC to get some money, rather than no money for them, even if it’s not very much.  Also like the segmentation within the airline industry, GCs can do well to see how they position themselves, leverage their assets and what kind of clientele they attract.

The parallels between air travel and golf certainly isn’t perfect (I will blog about it later), but there are parallels that golf clubs can learn from and exploit to their advantage.   Also, like the airline industry, not every golf club will survive this downturn, but it is in the interest of the golfing community that we can save as many as possible and keep the game alive, otherwise I am not sure what I will do next weekend.


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