Bay Paul - Course Logix President
Golf Course Survival Tips During a Recession
How To Maximize Profitability For Your Golf Course During a Recession
We all know the golf course recession was here way long before the current global economic crisis we hear about everyday.
Have you second guessed yourself over the past 6 months?
Are you just trying to survive? Is cutting Greens Fees/Membership Dues the answer?
Golf Course Facilities should bear six factors in mind when making their marketing plans for 2011:
1. Research the customer. Instead of cutting the market research budget, you need to know more than ever how consumers are redefining value and responding to the recession. Price elasticity curves are changing. Consumers take more time searching for durable goods and negotiate harder at the point of sale. They are more willing to postpone purchases, trade down, or buy less. Must-have features of yesterday are today's can-live-withouts. Building a segmented golfer email database is a good start. Knowing your golfers playing habits, geographical area, age group, and other demographics should be the foundation of your marketing plan.
2. Focus on family values.When economic hard times loom, we tend to retreat to our village. Family Golf Sundays and bring your kids to the course are just a couple of ideas to get the family involved with your golf course. It's proven that today's parents are spending more on their kids than treating themselves.
With duel income familys being more prevelant than ever, time is one of the most determining factors when spending discretionary income. When developing an action plan to target the family segement, make sure Time, Cost, and Course Difficulty are addressed.
3. Maintain marketing spending. This is not the time to cut advertising. It is well documented that brands that increase advertising during a recession, when competitors are cutting back, you can improve market share and return on investment at lower cost than during good economic times. Uncertain consumers need the reassurance of known brands.
If you have to cut marketing spending, try to maintain the frequency of advertisements by shifting from 30-second to 15-second advertisements, substituting radio for newspaper advertising, or increasing the use of direct mail and or email marketing, which gives more immediate sales impact and is the most cost effective form of marketing.
4. Adjust product mix. Most golf course facilities' product mix are Open Golf Fees, Outings/Tournaments, Memberships, and in some parts of the country, Leagues.
Daily Fee/Semi Private Facility Operators must reforecast demand and re-evaluate which product lines yield the highest margin. Should you go after more outings in 2011, or more members? Every action has an opposite re-action. Increase your outing business, Open Golf revenues will drop. Add more leagues, twilight golf will drop. Grow your Open Golf, and your members start complaining due to slow place of play. The hard part is knowing which mix yeilds the highest return. Every course is different, but creating a revenue plan for 2011 is a good start.
5. Adjust pricing tactics. Customers will be shopping around for the best deals. Golfer loyalty is not what it once was. You have to work harder at building relationships with your customer base. You do not necessarily have to cut list prices, but you may need to offer more temporary price promotions, reduce thresholds for quantity discounts, and price smaller pack sizes more aggressively.
The key is "No one wins in a price war". You lower your prices, your competition will follow. Now what? You cut again, and then they cut. It's a vicious cycle that is already running rampant throughout the golf course industry. Adding more value/quality and setting your facility apart from the competition without gimmicks is the best long term approach.
Quick Tip: Most courses post coupons on their website. Posting coupons on your website is not a bad thing, but require them to fill out an online profile first before they get access to the coupon is the way to go. Your email database will grow significantly.
6. Emphasize core values. Although most facilities are making employees redundant, Course Operators can cement the loyalty of those who remain by assuring employees that the company has survived difficult times before, maintaining quality rather than cutting corners, and servicing existing customers rather than trying to be all things to all people. Course Operators must spend more time with customers and employees. Economic recession can elevate the importance of the controller's balance sheet over the marketing manager's income statement. Managing working capital can easily dominate managing customer relationships. Course Operators must counter this. Successful companies do not abandon their marketing strategies in a recession; they adapt them.