(Marketing your course column) Important exceptions

I was a consultant for a course that experienced an $800,000 loss the previous year. The owner’s solution was to keep making the course better, and his young superintendent went along with him. Maintaining the course’s 260 acres of groomed turf required an annual maintenance budget of almost $900,000.

My analysis showed that while the course was demanding $65 fees, it was commanding only $45 golf. That explained the loss.

I persuaded the superintendent to determine what would need to be sacrificed if the budget were reduced to $650,000. The superintendent replied with a list that made it close, including letting 60 acres go unmaintained. The owner kept asking what it would look like if this were cut or if that were sacrificed. The superintendent’s response, based on his carefully considered recommendations, was that the course wouldn’t look all that different.

Six months after the suggested maintenance changes had been made, I visited the course, and it still looked high profile. The owner also lowered the fee, which made the course more attractive to area golfers. The course’s play increased, and along with sacrifices in some other areas, the owner was able to cut his loss to $230,000 the next year. By the third year, they had broke even, and in the fourth year, the course was in the black.

It was a lot of work, but the story had a happy ending.

I share this story because, as a marketing consultant, the one true measure I use to evaluate the performance of a golf course is revenue. You can evaluate golf  courses as being private, public, municipal, military, semiprivate or by whatever intended clientele they aim to serve. You also can evaluate them for agronomic quality – some are excellent, others are adequate, and some are in poor condition.

From a business and marketing perspective, the critical factor is whether a golf course is losing money, is profitable or is highly profitable. These are the only business possibilities.

A common mistake of golf course marketing is letting a general expectation about what kind of course you have determine how much to charge. While it’s true private courses are usually nicer than public ones, and semiprivate courses tend to be nicer than municipal ones, there are important exceptions. I’ve seen military courses that rival resort clubs.

It’s also a mistake to set your fees based on what the average is for your type of course in your area. One of the important facts I determine for clients is the number of rounds played in their area. If rounds are limited and the course needs to gain players, then those rounds have to be taken from existing play, which means you can’t offer the same combination of price and value as everyone else and expect to gain play.

It can even be a mistake to think that you’re better than your competition for any intangible reasons. I know a large and respected company known for its high-end courses. It purchased a golf course in an area and renovated it to its exceptional standards. But the course failed because the market didn’t need another high-end course. Despite its excellent reputation, the golfers didn’t respond.

Similarly, but at the other end of the spectrum, municipal courses have been created to provide inexpensive entertainment for the community, which generally means providing an inexpensive product. That’s not always the case, however. For example, the commissioners in Denver discovered their market would support high-end courses. Some of its municipal courses charge $75 fees successfully. As expected, these courses look as good as private courses because the players pay for and expect that level of course conditioning. You have to let the market determine what you charge. To do this, you have to analyze and understand your local market.

A few years ago, the National Golf Foundation surveyed the Raleigh, N.C. market, which was supposed to be oversaturated for golf from a population standpoint. What the study found suggested the area could support another medium-level course, say in the $30 to $40 range. What this meant is that it would have been possible for a $20 course to invest and move up to fit that medium-level niche and be successful or for an unsuccessful $40 to $50 course to move down.

Critical to being able to properly position a golf course is that the superintendent should know the difference between $20 golf, $30 golf or $40 golf because the ultimate business challenge is being able to match the target demand and market expectations. One aspect of this is that the superintendent cannot simply accept the budget he or she  has. If the budget is inadequate, the superintendent must explain why market factors demand that more money is needed. At the same time, if a superintendent has too much budget, then he or she should give some of it back. Put another way, the superintendent’s job is to match the necessary course conditions with the marketing goals, not do everything possible to the course.

I’m sure the thought of giving some of the  budget back will make many readers smile and others laugh. But it’s good business. If a superintendent can get the job done with a smaller budget, then the money saved will drop straight to the bottom line. The appreciation a superintendent should receive would be the same as if several of his or her employees came up with a great time-saving idea that would free one hour from each of their days, then ask the superintendent what else they could do. Those employees would be the superintendents heroes.

When people ask me what marketing is about, I tell them the story about when the first disposable cigarette lighters came out – they were priced around 25 cents. The market viewed the lighters as cheap and unreliable, and they sat on store shelves and in warehouses. Then some marketing was conducted, and the lighters were reintroduced at $1 each. They sold quickly because they were perceived as a quality product.

Marketing is meeting or exceeding expectations to the ability you can afford and the market demands. It’s not about doing everything possible. It’s simply the age-old, revenue-minus-cost-equals-profit equation. After all, the objective of marketing is profit. 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.