(Marketing your course) Defining your market

Defining the true market from which your golf course can draw demand can be challenging. Sometimes you need to spend money on infrastructure to make sure your facility can accommodate certain targeted groups, as well as spend money on advertising and promotions to attract golfers to your course. It’s critically important to your success that you identify your real market potential before you spend millions of dollars on your course. It doesn’t matter if it’s a $4-million course or a $12-million course,  if your market isn’t clearly defined, you’re in for surprises. Here’s a real-life case study.

I recently consulted clients who built a golf course in the Bible Belt. They originally had a golf resort in mind but wanted to build the course first and then sell lots around it for residential development. They desired the revenue from lot sales and a membership base from the families that built homes. The owners sold the lots, but the majority of people that bought them didn’t plan on building homes there for several years, therefore, the owners had a smaller membership base than expected. They ended up building just the golf course but not a clubhouse, pro shop, villas or meeting rooms like they originally intended because they needed the support of the local market first. That didn’t materialize.

A simple demand analysis, using the population or participation method, would have revealed the local golf market (a 20-mile radius) wouldn’t support the golf operations. If this had been known, the next step would have been to expand the drive market and conduct another demand analysis. When I expanded the analysis to the 20- to 30-mile radius, I found significantly more demand for quality courses in the $45- to-$75 range. If my clients had to do it all over again, they would have recognized this 20-plus mile area was the primary advertising market for the golf course and allocated the necessary marketing budget to drive rounds from this market.

The recently opened course is generating fewer than 20,000 rounds a year in a market with six other courses generating an average of 30,500 rounds per course. Part of the reason why the course generates fewer rounds than the other courses in the area is because the owners priced the course too high for the local market and didn’t advertise to its regional and feeder markets. The green fees are $40 during the week and $45 during the weekend. In comparison, the average fee among the local courses is $26. The owners based the fees on how much better their course is compared with other local courses, which isn’t disputed by local golfers – they just don’t want to pay that much for a round of golf. If this $10-million course was built in a metropolitan market, it would be a $65- to $80-a-round course, but this rural market hasn’t been supporting it.

So, when I first consulted my clients about marketing their course, I asked if they had considered selling it and cutting their losses. I knew they would be lucky to get only $4 or $5 million dollars for it. The other option they had was to finish building the resort they originally planned and start to drawing from its regional and feeder markets, which are to the south in summer and north in winter. Then the course could piggyback off the popularity of a nearby lake, which draws more than 500,000 tourists per year, many of who are affluent.

Once we had completed a viability study and a marketing assessment report about the feasibility of a resort course in this market, my clients opted for the second choice. What they lacked was a clear vision of what market they served, what infrastructure they needed to serve the identified markets, and an idea of when they would reasonably stop putting millions of dollars into the project.

Defining new markets
We started by reviewing the regional market (20- to 30-mile radius). About 10 miles further from the edge of the course’s local market, there are two towns that have seven resort golf courses and more affluent golfers than the local market of my clients’ course. The resort golf courses are generating an average of more than 36,000 rounds annually. Some of these golfers are frustrated by the crowded courses they’re playing and are willing to drive the extra miles to play a quality course that’s less crowded.

So, our new marketing goal became to market further out than the local community because of the additional affluent golfers. These golfers are paying $50 to $80 green fees, so the green fees of my clients’ course are attractive to them.

The first goal to define the market was determining the course won’t stabilize as is and needs other dimensions to draw golfers from regional and feeder markets so the owners could charge higher-than-average rates.

Expanding the market
If your local market isn’t supporting your course, you have to be proactive and redefine your market potential. Now the plan with my clients is to continue building the resort infrastructure and promote it in feeder markets to attract golfers. In turn, rounds and revenue should stabilize at about 30,000 in about five years, based on market research and calculated demand participation, which includes an educated estimate of how much we can influence the local demand at an exclusive residents rate.

With a defined vision of what the course’s true target markets are and a timeline for when those markets can be attracted to the facility (i.e. when amenities are finished and ready for use), then you can create submarketing plans to capture and monitor each segment of desired business.

The bottom line is that you need to calculate at what rate and how many rounds the course needs to sustain itself. You need to start with the local market, where your targets are senior play, junior play, leagues, outings, memberships, etc. After you’ve define and targeted the local market, then move on to the targets of regional and feeder markets, define the business segments that you appeal to (day travelers, overnight travelers, corporate meetings, conferences, etc.) and build your submarketing plans to attract them.

In this case study, you can see that marketing is a changing strategy. The basics remain the same, but for this facility, the feeder markets are being defined later than they should have been. We began by conducting research about the locales of visitors to the nearby lake, marinas and lodging. Our new feeder markets began to materialize. What we found is the opportunity to succeed is around every corner. That’s vision, marketing, and defining or redefining your true market(s). GCN

Jack Brennan founded Paladin Golf Marketing in Plant City, Fla., to assist golf course owners and managers with successful marketing. He can be reached at
Jackbrennan@tampabay.rr.com.