[Industry data] Behind the numbers

Q: Explain the methodology for collecting data about golf course construction.
We use several methods. First, we pour over clippings from a clipping service, which enables us to locate golf course development projects that would otherwise be difficult to find. Often, there’s little information in the original source, so we call chambers of commerce, area golf facilities, etc., to compile the basic information.
Then we call back to check progress before milestone dates, such as groundbreaking and opening. We also search the Internet, review periodicals and survey about 300 architects and 50 builders regularly to discover more projects.
Finally, we unearth information concerning renovations, closures and other aspects of development during the normal course of calling all 16,000 facilities each year to update their basic profile and contact information. The golf course construction data we collect is repackaged and sold online through our Web site.

Q: Explain the methodology for collecting rounds-played data.
We collect monthly rounds-played data online from a panel of about 2,500 facility operators who provide us with their rounds-played information. We receive data collection help from our sister associations, the PGA of America, the Golf Course Superintendents Association of America and the Club Managers Association of America. The golf course management companies also are helpful and provide data.
We use a same-store sales approach, meaning that only facilities providing year-over-year data (e.g., April 2005 and April 2006) are included in results. To ensure national representativeness, the data are statistically weighted by type (public/private), size (number of holes), geography (11 climate regions) and price point (public facilities only).

Q: Has the methodology changed, and will it?
No, the methodology hasn’t changed. And, while our ongoing reporting is based on same-store sales, we also calculate and report on overall volume of rounds as well. However, with net supply approaching zero growth, the difference between same-store rounds and overall volume is minimal, at least at the national level. We have no plans to change our methodology.

Q: What’s your response to those who claim NGF’s numbers are questionable?
I’d say they should examine the depth and representativeness of our samples, research methodologies and professional credentials, and judge for themselves, as opposed to listening to biased critiques from self-interested competitors who discredit themselves and fail to provide enough detail about their own samples and methodologies to permit open comparison. Needless to say, we’re completely confident in the accuracy of our work. And our board of directors – comprised of industry leaders throughout industry sectors who provide oversight and accountability – are as well.

Q: Do you feel any impact from companies such as Pellucid or Golf Datatech?
None … no impact whatsoever. Our client list is second to none and growing. Our research product and service offerings are broad based, and we’re continuing to add new services that meet the needs of our clients.

Q: What are those services?
We’ve introduced the notion of measuring customer loyalty to understand why customers do what they do. We have an Internet-based customer feedback system that measures customer loyalty and correlates it. We’ve implemented the system for pretty much all the manufacturers, even some people in turf such as golf cart companies, and we are introducing it to golf facilities. We started that about three years ago and are evolving into version two. We’ve done about 600 golf courses and about a quarter million golfers we’ve measured so far. We’ve helped golf courses measure their customer loyalty and figure out what its basis is. That’s something that’s going to continue to grow for us because customers are finding it extremely useful.

Q: Are facilities using that information to tweak their operations?
Absolutely. It’s all about finding what it takes to get more promoters at a facility. It also measures wallet share, which is important. The easiest way for public facilities to grow their rounds is to increase wallet share from the customers who already visit. They’re easy to communicate with because they’re on a property. Increasing wallet share is what facilities are trying to do with this customer feedback system. They’re figuring out how to get people to play more rounds at their facility as opposed to the competition.

Q: Based on the research NGF conducts, what are the biggest trends you’ve seen recently?
The consolidation of business in the golf equipment and turf industries – fewer companies are controlling much larger shares of the business; the reduction and stabilization of new course development; flat demand in terms of rounds played; and increased competition throughout all industry segments.

Q: How can golf course superintendents use NGF to do their jobs better?
We’re doing great work with our research partner, the GCSAA. Superintendents need to stay on top of industry trends NGF monitors so they can talk outside the turf business with their owners, general managers and board members. Another way we can help is with our online customer feedback system, which, among other things, provides verbatim comments from golf course customers that relate to golf course conditions.

Q: What information is the GCSAA asking for?
Recently, we have been retained by the GCSAA to conduct a major environmental study. That’s a fairly major undertaking. The GCSAA was careful with its selection, sending out a few proposals and RFPs. A number of companies bid on that, and we were awarded the work. The GCSAA is a client, and we are helping it conduct the research it wants to conduct on the environmental impacts of golf. We look forward to an enduring relationship doing that with them.
The GCSAA also is interested to provide more research services to its exhibitors and people in the turf segment of the industry. It spends a lot of time with those companies. NGF and the GCSAA have decided to provide those services together.

Q: Will there be any significant changes for NGF in the near future?
Our strategies for success are reviewed and updated on a regular basis with help from business leaders in golf. But our core values are explicit and will never change:
1. Integrity/quality: The integrity and quality of our people and our work will continue to differentiate us from the competition and provide the foundation for our continued success.
2. Focus on customer success: The test of every service we provide is whether it offers value to clients and members and whether it can help them become more successful. As long as we continue to focus on our clients’ success, as opposed to our own, we’ll continue to prosper over the long haul.
3. Embrace growth and change: We believe in continuous reinvention, and we pursue it in our own organization and encourage it in our clients as well.

Q: Will NGF expand its research?
We’ll always be open to meeting the needs of our clients and members, be it through new research offerings or other important areas.

Q: Is there research people ask for that you don’t have or track?
You can’t believe the questions we get from the phone and Internet. Some questions are obscure but interesting, however, there’s not a big enough demand that we can economically answer the question.
This is how we get ideas for new information or research that we need to do and share with our members. We monitor the kinds of questions, content and quantity of those requests for information and use that to guide our information development efforts.

Q: What’s the niche for NGF Consulting? How’s that business been?
NGF Consulting is one of the largest, if not the largest, golf facility consulting practices in the country. We have conducted more than 300 engagements during the past 10 years. Our services are broad, from golf market analysis, to acquisition due diligence, to consulting with operators to improve their operations.
Throughout the past two years, about a dozen major cities have hired a consultant to help them review and improve their multicourse golf operations. In competitive bidding, NGF was awarded 10 of those studies based on our credentials and references. So our consulting business is doing fine.

Q: What kind of a focus does NGF have on membership, and how much has it increased membership since 2000?
NGF has the broadest membership base in the golf industry. We’re the golf industry’s only true trade association – all others are vertical. Our business memberships have increased 8 percent, and facility memberships increased 2 percent since 2004. Our key services to members include our quarterly newsletter, monthly e-newsletter, rounds played reports and other research reports about industry trends, golf facilities, golf participation, facility operations, etc.

Q: What’s membership retention like?
There’s a certain amount of turnover in the membership that’s normal and natural. It’s a function of changing needs of companies and/or consolidation. There’s going to be some normal turnover with membership, it is always there. It’s always higher than what we like it to be. We’re pretty sensitive to what the changes are and try to add services to respond to those changes. Many people will join NGF and be a member for a year or two and get the kind of information they need. Then they might not feel there’s a continuing need to be a member. We consider that to be normal. It’s like unemployment – it will never be zero. There’s a certain level that’s the standing rate. That’s true of any membership organization.
It’s much different in NGF than it is with superintendents or PGA pros. If someone becomes a PGA pro, he’s going to stay a PGA pro, and he’s going to be a PGA member for 30 years. He’s not going to come in and out. NGF is different in that regard because we’re about business memberships not individual memberships.

Q: How can NGF help manage the business of golf better?
We can’t help manage the business of golf better, nor can anyone else. But we can help our clients and members manage their businesses better. Now, if everyone in the golf business was a member of NGF, then … GCN