Managing a more profitable organization

During an economic recession, business owners scrutinize their operations, looking to reduce costs and increase revenue wherever and whenever possible. In an economy such as this, survival is at stake for some businesses.

For golf course operators, it’s no different. Those attending the Golf Industry Show earlier this month were looking for advice, ideas and examples of how to improve their golf operations. Several industry executives shared examples of what they’re doing to better their businesses.

John Huggins, vice president of operations for the Tournament Players Club, which operates 18 properties throughout the country, says the TPC, like all operators, is focusing on minimizing revenue loss and retaining revenue. Part of the TPC’s revenue philosophy is to evaluate membership patterns and opportunities.

TPC has what’s called a deep-dive initiative, which includes an in-depth market evaluation of each club (a competitive analysis) and adjusting key price points, such as premium, corporate, country club/family and value.

After reevaluating the TPC Summerlin in Las Vegas, which was underperforming property, the TPC determined the club was trying to be all things to all people. In an effort to change and be more targeted, the club lowered its fees and dues to $110 a month. After that, the club realized an increase of new memberships, from 12 to 65. The membership rules changed a bit, too, allowing longer financing plans. The property also changed its refund policy and created a replacement option for members.

At the TPC Wakefield Plantation in Raleigh, N.C., the club turned one of the rooms in the clubhouse into a high-end steakhouse because the club is located in a residential area that isn’t near restaurants. It took advantage of a need in that market.

Archie Lemon, director of golf operations for Burroughs & Chapin Golf Management, suggests operators know the who (the player type), what (the competition), where (where are the golfers from), when (when are they booking and playing), and why (why did they choose your facility) about their customers. Knowing the answers to these questions will help operators maximize their revenues, he says.

Other operational aspects to analyze include the rate sheet, cooperative marketing, hotel prebook reports, visitation programs, yield management, unused tee times and rate periods per calendar year.

Jim Keegan, managing principal of Golf Convergence, encourages operators look at their markets in terms of age, ethnicity and income to determine how to price their courses and increase their usage.

Golf Convergence is a consortium of seven golf experts focused on market research, customer franchise analysis, electronic messaging, digital marketing, facility branding and membership, inventory solutions and operational management.

One of the company’s clients had a well-conditioned course with declining revenue. After conducting research, Golf Convergence found out time was the No. 1 factor for the decrease in rounds. Proximity to golf course was No. 2. So, the course took steps to address the time issue.

Phil Green, president of OB Sports Golf Management, says the company is working on innovative and creative marketing. It set a best-rate guarantee to reduce dependency on third-party sellers of tee times, improve communication with customers and increase average daily rates. The best-rate guarantee is shown via a ribbon online and in promo materials.

OB has started text messaging golfers, targeting the soft spots it has in the tee sheets during the day and week. It’s also experimenting with Facebook, blogs, Twitter and YouTube.

Additionally, loyalty programs are a staple at most OB properties. Golfers pay an annual fee for reduced tee time throughout the year.

Green presented two examples of increased business. One was Hooters beverage carts (including Hooters girls) at a golf course with blue-collar clientele. The decision has tripled beverage-cart sales. The company also purchased two buses to transport people from the Las Vegas strip to the two golf courses OB operates 20 minutes from the strip. The buses have made it easier for people to get to the course and back.

Peter Hill, founder, CEO and chairman of Billy Casper Golf, says the company benefits from the data it mines from its customers and allows it to make better business decisions. BCG has 1.4 million golfers in it’s database and can contact 950,000 of them.

Hill says operators should know:

• The percentage of total rounds at their course that’s played by regular golfers (8 percent is average);
• The percentage who play just one round (50 percent is average);
• The percentage who play six or more times a year (13 percent is average);
• The percentage who played just once at your course in 08 will play again in 2009 (50 percent);
• The number of rounds the typical golfer plays a year (average is four, range is one to seven);
• The share of wallet from the typical golfers you have ( 20 percent is average); and
• The number of initiators, the people who make the tee times, you have (10 percent to 20 percent is average).

Hill also say 50 percent of golfers who play at a facility aren’t coming back, but the good side of that is 50 percent are new golfers. BCG decided to make four offers to at-risk customers – golfers who haven’t played in 90 days. There are 75,000 customers who fit this profile in the BCG database. The four offers were:

1. $20 off the next round
2. $10 off the next round
3. We miss you. Click here to book.
4. No communication.

“There was no statistical value between the first three offers, which means it’s not about the money,” Hill says. “It’s about the time and course conditions. It’s about value and interaction with employees.” GCI