Programming for Profit or how to avoid the death spiral of discounting The State of the Game Golf Summit Olympia Fields Country Club April 2007 It is clear golf is good for business! Double the number of visitors $$$ Double the length of stay $$$ Equal or greater $$$ spent per day Adds value to sale $$$ $62 Billion Economic Impact in United States A clear winner to the bottom line $$$ and for golfers Tipping Point Little Things Can Make a Big Difference You influence public opinion Be Passionate Be obsessed Have perseverance Be persistent Smile в�є and have Fun!!! Why Why is is the the NGCOA NGCOA involved involved with with education education on on this this topic? topic? ItIt is is fundamental fundamental to to our our mission mission вЂњTo вЂњTo enhance enhance the the lives lives of of golf golf course course owners owners by by making making their their businesses businesses more more profitable, profitable, more more efficient, efficient, better better managed managed and and more more stable.вЂќ stable.вЂќ Attracting and retaining revenue is the number one issue with course owners and operators Evangelize best practices . . . Avoid bad apples and pitfalls of other industries Strategically we are fostering and supporting working together with allied associations, CVBвЂ™s, tourism partners, govвЂ™t, and suppliers at the international, national, and local level вЂўto grow the game вЂўenhance the brand of golf вЂўmake it more stable. .....at the international, national, and local level www.golf2020.com www.eifg.org The Goal Goals вЂўAttract and retain raving fans that fill tee sheet year- round at the highest possible rate while maximizing yield per round through retail, food and beverage, instruction, and other revenue. вЂўDevelop a waiting list for members with initiation fees paid in full and all members paying the highest level of dues вЂўTournaments and leagues sold out Goals вЂўEnergize customers to be your most effective marketers . . . the best source of referral вЂўProvided a clean, green and pristine environment for golf, relaxation and renewal вЂўBe financially able to give back to the community via charity, human and financial resources Customer Segmentation 1. Brand-loyal customers - Experience вЂў course or destination direct 2. Brand-agnostic customers - Experience вЂў any similar course in the same type and price point 3. Brand-disloyal customers вЂ“ Price driven вЂў Priceline, Last minute golf UNDERSTANDING COMMODITIZATION High DIFFERENTIATION experience service product commodity Low PRICE Programming Over Price High Player Types to Manage вЂў вЂў вЂў вЂў вЂў вЂў вЂў вЂў вЂў вЂў вЂў вЂў Club Members Resort Market Tourist Market Group & Convention Travel Provider Local Resident Local/Regional market Affinity Markets (AAA, ATP, VISA) DVC/T-VO Market Local Corporate Hospitality Market Membership Cards вЂў NGCOA, CMAA, PGA, GCSSA Members вЂў Military Personnel вЂў Company Executives вЂў Staff Members вЂў Corporate Alliances вЂў Junior Events вЂў Bargain Market вЂў Last Minute Market вЂў Site visits & Comps вЂў Charity/Community вЂў PLUS Many Others... Step 4: Sort Rounds Categories into Price/Discount вЂњBucketsвЂќ 1: No Discount Rack Rate Rounds, Full Paid Packages, Company Executives 2: 5-10% Off Small Discounts to local hotels & concierges, AAA Members, other affinities 3: 15-25% Off Medium Discounts to Loyalty groups, Annual Passholders, & Members 4: 30-40% Off 5: 50-100% Off Deeper Discounts, Seniors, and rounds with large Commission payouts Super Discounts to PGA, Employee groups, Junior Golf, Comped rounds Step 4: Buckets can be turned on or off 1: No Discount Rack Rate Rounds, Full Paid Packages, Company Executives 2: 5-10% Off Small Discounts to local hotels & concierges, AAA Members, other affinities 3: 15-25% Off 4: 30-40% Off 5: 50-100% Off Medium Discounts to Loyalty groups, Annual Passholders, & Members Deeper Discounts, Seniors, and rounds with large Commission payouts Super Discounts to PGA, Employee groups, Junior Golf, Comped rounds Begin Behind the Scenes вЂў What is the Artificial Intelligence in the back end of your management information system. вЂў What are your various player types and rates. вЂў What are your rate seasons, date ranges, and time ranges. вЂў What are your tee times, booking windows, affiliated hotels and sales channels, and tee intervals on each course. вЂў What are your various player types and rates and your Profit Management вЂњBucketsвЂќ. вЂў Training . . . Especially how to handle the price call Important trends that affect golf . . . what golf courses are doing to stay relevant Emerging Lifestyles Demography Technology Leisure Time Vacation time From 2006 National Travel Monitor Yesowich, Pepperdine, Brown, Russell, Yankelovich www.ypbr.com Breaking News вЂў Consumers want to reconnect with what they feel is really important in their lives вЂў 73% now spend more time thinking about what works in their lives and what doesnвЂ™t From From 2006 2006 National National Travel Travel Monitor Monitor Yesowich, Yesowich, Pepperdine, Pepperdine, Brown, Brown, Russell, Russell, Yankelovich Yankelovich www.ypbr.com www.ypbr.com Building Firewalls A Renewed Interest In Family вЂў 71% of parents wish their family spent more time together as a group вЂў 69% wish they had more time to just sit and talk with their kids From 2006 National Travel Monitor Yesowich, Pepperdine, Brown, Russell, Yankelovich www.ypbr.com Time Poverty Agree: I feel like I donвЂ™t have enough time. % 41 From 2006 National Travel Monitor Yesowich, Pepperdine, Brown, Russell, Yankelovich www ypbr com Seeking Relief Agree: I need to find new ways to reduce stress in my life. 76 % From 2006 National Travel Monitor Yesowich, Pepperdine, Brown, Russell, Yankelovich www.ypbr.com Trend Watch There are now twice as many people interested in visiting a spa on vacation than interested in playing golf. From 2006 National Travel Monitor Yesowich, Pepperdine, Brown, Russell, Yankelovich www.ypbr.com вЂњspas are the amenity of the future for private clubs: Yoga, fitness on the range вЂ“ private clubs have been reinventing themselvesвЂќ Jim Singerling the ceo of the CMAA Agree: I would experience difficulty if my paycheck were delayed for one week. 74% Source: American Payroll Association, 2006. Demographics Better Educated 24% of U.S. adults now have a bachelors degree or more (compared to 20% in 1990) 58% of the class of 2008 will be female From 2006 National Travel Monitor Yesowich, Pepperdine, Brown, Russell, Yankelovich www.ypbr.com More Affluent Affluent Household As % Of Total U.S. Households 25.90% 14.00% 11.30% 4.60% HHI HHI >$100K >$100K 2000 2010 HHI HHI >$150K >$150K From 2006 National Travel Monitor Yesowich, Pepperdine, Brown, Russell, Yankelovich www.ypbr.com Trend Watch There are now more millionaires in America than there are people who are unemployed. From 2006 National Travel Monitor Yesowich, Pepperdine, Brown, Russell, Yankelovich www.ypbr.com Women Rising number of affluent women 51% of buying power in America Martha Barletta 40% of active business travelers community dining variety spa/fitness clean facilities/bathrooms wireless safety Golf For Women Magazine Multi-Cultural Nearly one in five Americans (47,000,000) do not speak English at home More than half of them (28,000,000) speak Spanish вЂ“ 62% increase in last decade вЂ“Demographic shifts the traditional core and avid golf participant the middle aged white male is already in the minority or on the way to minority status in America. вЂ“The Green Magazine More Diverse Racial Group White Hispanic African American Asian Other Source: Source: U.S. U.S. Census Census Bureau, Bureau, 2004 2004 2000 2050 69% 13 13 4 1 50% 24 вЃ 15 8вЃ 3 Over 65 In America вЂў 12% (36MM) in 2003 вЂў 20% (72MM) in 2030 From 2006 National Travel Monitor Yesowich, Pepperdine, Brown, Russell, Yankelovich www.ypbr.com 79MM Boomers Start Turning 60 This Year From 2006 National Travel Monitor Yesowich, Pepperdine, Brown, Russell, Yankelovich www.ypbr.com вЂњMillennialsвЂќ вЂў Born between 1980/2000 вЂў Outnumber Boomers and GenXers by 2010 From 2006 National Travel Monitor Yesowich, Pepperdine, Brown, Russell, Yankelovich www.ypbr.com The Power Of One Single person households outnumber married households with kids. SINGLE, NO KIDS MARRIED, WITH KIDS 31.10% 31.60% 31.30% 31.20% 31.30% 31.40% 31.50% 31.60% Source: Source: U.S. U.S. Census Census Bureau, Bureau, 2005. 2005. Technology Demystifying Distribution Sue Heilbronner & Cindy Estes Green HSMAI Hospitality Sales & Marketing Association International www.hsmai.org Profits and Pitfalls of Online Marketing: A Legal Desk Reference for Travel Executives Mike Heilbronner, Sue Heilbronner & Cindy Estes Green www.TIGglobal.com Email has increased average length of work day by one hour. From 2006 National Travel Monitor Yesowich, Pepperdine, Brown, Russell, Yankelovich www.ypbr.com Internet Usage вЂў Average of 24 minutes daily sending/receiving email messages вЂў Average of 4 minutes daily for search Source: Pew Internet and American Life Project, 2005. Get wired or get fired вЂўIn 2004 household use of the Intranet exceeded the use of ANY other medium- including television, radio, newspapers, and magazines ( US Online Marketing Forecast 2005-2010 Forrester May 2005 вЂўPew Internet Life Survey, 2005 89% of college educated people use the internet. In homes with combined household income above $75,000 95% of men and 90% of women use the internet 71% have broadband Get wired or get fired вЂўInternet Use among the educated, middle/upper class is near full penetration вЂў79 million Americans (78% of US travelers) turned to the Internet in 2005 for travel and destination information, compared to only 65% in 2004 (Travel Industry Association) вЂў50% of all hotel bookings expected to be online by 2009 Consumers are Booking Hotels Online Online Online hotel hotel bookings bookings will will be: be: 36% 36% of of all all leisure leisure bookings bookings by by 2007 2007 50% 50% of of all all leisure leisure and and unmanaged unmanaged business business bookings bookings by by 2007 2007 Source: Phocus Wright 2005 Travel Edition, Forrester US Online Marketing Forecast 2005 Leisure Consumers are Researching and Booking Travel Online Online Leisure Booked Revenue $110.5B $120 Amtrak $100 $63.5B Cruises Billions $80 Vacation Packages/Tours $60 Rental Cars $40 Lodging $20 $0 2003 Airline Tickets 2004 Source: Forrester US Online Marketing Forecast 2005 2005 2006 2007 2008 2009 Consumers Prefer Booking Direct вЂ“ Consumers research with TPIs but increasingly book direct вЂ“ Jupiter Research shows a decreasing share of hotel booking through online agencies and increasing share through online direct Expedia Travelocity Orbitz Hotels.com Cheap Tickets Priceline.com 0% 10% 20% Research 30% 40% 50% 60% Book Sources: Jupiter Research Internet Travel Model July 2005 (44% direct in 2006, 47% in 2010); ForresterвЂ™s Consumer TechnographicsВ® 2005 North American Benchmark Mail Study; вЂњTravel Retail Smackdown,вЂќ Google is King How How People People Search Search for for Golf: Golf: Keyword Ann Searches Golf 29,227,176 Golf Course 10,819,656 Golf Club 5,049,612 Golf Vacation 1,427,868 Discount Golf 1,072,188 Las Vegas Golf 745,056 Golf Gift 723,168 Golf Lesson 598,284 Golf Resort 520,092 Golf Course Chicago 476,388 Myrtle Beach Golf 367,452 Golf Ireland Vacation 340,164 Golf Course Detroit 338,580 Arizona Golf 321,768 Golf Course Philadelphia 273,924 Golf Package 201,240 Beach Golf Myrtle Beach 143,568 Florida Golf Vacation 53,784 Arizona Golf Vacation 45,576 *Source: ComScore March 2006; Overture May 2006 search volume. Multiple of 3 over Overture is assumption of total. Current Landscape Givens in TodayвЂ™s Marketplace вЂў Customers want it all; bankable quality at bargain prices. But if that were the end of the story, we would all be using generic toothpaste. вЂў Segmentation and relationships are the keys to the future. Businesses that focus on creating bonds with the most potentially profitable customers who share the same values will be more successful. вЂў The businesses that move ahead are those that can recognize profitable customers, have the capability to obtain critical knowledge regarding preferences, and can parlay that knowledge into experiential differences at all critical touch points. Future of Travel Distribution вЂњTravel distribution will have to evolve from efficiently processing transactions to carrying out meaningful conversations with customers that are rich in content, address their service issues and concerns, and finally, efficiently process the customers transactions. The goal will be to carry out ongoing conversations with targeted customers that produce profitable bookings.вЂќ - "Customer-Centric Systems for the Travel and Tourism Industry, " report, Accenture/World Travel and Tourism Council (WTTC), May 2002 Reported in eMarketer, October 2003 Leisure Time/Vacation Habits Enjoyment Expect To Do More Of This Year Take a special vacation Lose weight Look for ways to organize myself Have more fun Buy new furniture Send more letters and greeting cards Look for a new job Read the newspaper more Buy new appliance Buy computer software From 2006 National Travel Monitor Yesowich, Pepperdine, Brown, Russell, Yankelovich www.ypbr.com 55% 54 47 47 27 26 21 21 19 15 Enjoyment Most Likely To Do In My Spare Time Spend time with friends and family Read Watch television Call friends and family Take a walk Cook something special Go to movies Work in the yard Go for a drive Have sex/make love From 2006 National Travel Monitor Yesowich, Pepperdine, Brown, Russell, Yankelovich www.ypbr.com 79% 70 63 58 58 55 54 51 48 47 No PE in Schools Frank DeFord the acclaimed veteran sports writer opined that golf is not unlike other sports, i.e., kids are introduced by their parents . . . quote decline of parental involvement Vacation Deprivation Agree: I feel like I donвЂ™t have enough vacation time. 47% From 2006 National Travel Monitor Yesowich, Pepperdine, Brown, Russell, Yankelovich www.ypbr.com Length Of Vacations (2006) Extended (5+) 23% вЃ Weekday (<4) 24% Weekends (<4, Saturday stay) 53% Length Of Vacations (2006) Extended (5+) 23% вЃ Weekday (<4) 24% Weekends (<4, Saturday stay) 53% From 2006 National Travel Monitor Yesowich, Pepperdine, Brown, Russell, Yankelovich www.ypbr.com Interested In Playing Golf On Vacation (All Leisure Travelers) 16% 14% 12% 10% 8% 6% 4% 2% 0% 17% 2006 From 2006 National Travel Monitor Yesowich, Pepperdine, Brown, Russell, Yankelovich www.ypbr.com Desirable Vacation Attributes (Leisure Travelers Annual HHI >$150K) 85% DINING IN NEW RESTAURANTS 63% SHOPPING 43% VISITING SPA 33% PLAYING GOLF 31% GAMBLING PLAYING TENNIS 13% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% From 2006 National Travel Monitor Yesowich, Pepperdine, Brown, Russell, Yankelovich www.ypbr.com Resort Real Estate (Affluent Travelers) Currently Interested Type Own In Vacation Home/Condo 20% 10% Timeshare 18 4 Vacation Ownership 9 5 Private Residence Club 5 4 Fractional Ownership 6 1 From 2006 National Travel Monitor Yesowich, Pepperdine, Brown, Russell, Yankelovich www.ypbr.com New Fitness Activities are growing and dominating вЂњtraditional activitiesвЂќ Fitness activities вЂў Pilates, Yoga, Taebo, Spinning, Aerobics, etc вЂў Cycling, Weights, Dumbbells, Ellipticals, Treadmills, Rowing, etc. вЂў Fitness Walking, Running, Fitness Cycling, etc. Baseball, Basketball, Golf, Football, Soccer, Skiing, Volleyball, etc. Frequent Participants 1998 2005 Change 51.3m 58.1m + 13% Many of these did not exist 15 + years ago 42 million health club memberships All are down during the same period (28 million total frequent participants) The Only Traditional Sport to Grow in the past 5 Yrs! Tennis +10.3% Football (.6%) Swimming (2.8%) Bicycling (3.0%) 2006 SGMA SuperStudy 2000-2005 % change What else is growing? Soccer (4.1%) Racquetball (4.8%) Fishing (5.4%) Baseball (6.4%) Ice Hockey (8.6%) Volleyball (10.6%) Basketball (14.9%) Golf (15.3%) Skiing (Downhill) (18.3%) Softball (23.0%) -30% -20% -10% 0% 10% 20% вЂњAmerica Gets FitвЂќ June 6, 2005 % of Americans who do these things each weekвЂ¦ 69% 35% 32% 30% 21% 18% take a brisk walk use exercise machines lift weights do aerobic exercise swim play any sport Notice the вЂ�exerciseвЂ™ or вЂ�aerobic exerciseвЂ™ categories %вЂ™s are 2 to 1 over вЂ�play any sportвЂ™ Travelers are looking for natural beauty ... www.eifg.org LRA Worldwide Conducted research on 125,000 about drivers of customer satisfaction 6 of 10 were emotional and service related, e.g., вЂњHow was I welcomed?вЂќ вЂњHow friendly was the starterвЂќ WhatвЂ™s your memberвЂ™s or guests favorite service that you offer? вЂњI think the most important thing will be to train all of your staff (yourself included, if appropriate) so that they are incredibly friendly and service-oriented and that they learn the member's names. Have the staff wear name tags. A smile and welcome them by name.вЂќ вЂњPutting smiles on the Customer's face is the most important beyond physical offerings. Welcoming them with open arms and thanking them for favoring your club. Everytime all the time!вЂќ вЂњour most appreciated service is the unmitigated friendliness, positive attitude and knowledge that our staff shares with themвЂќ вЂњAcknowledgement and communicationвЂќ Start and end with human experiences . . A smile, a welcome by name, a fond farewell, followed by ongoing personalized contact, programming, and services Also, вЂњThe Big Moo, Stop Trying to be Perfect and Start Being RemarkableвЂќ www.behospitable.com Malcolm Gladwell Blink First impressions now in a blink of an eye 7 seconds . . . Marketing Insights: Practical Applications 1.We are in the business of building long lasting relationships with each customer based on trust, memorable experiences, and community Steps to Building a raving fan/customer base 1. Have your core/avid loyal golfers bring back former golfers and new golfers 2. Pursue non-playing spectators 3. Increase participation from women 4. Growth of junior golf 5. Families, families, families . . . 6. Increase your diversity/people of color 7. Disabled golfers Three elements of any successful programming Orientation and Trial Instruction and Learning Programming and Continued Experiences Promoting the golf industry calendar of events вЂўTake Your Daughter to the Course Week вЂў Take Your Kid to Play Golf вЂў WomenвЂ™s Golf Week вЂў Marketing Materials вЂў Family Friendly Golf Set-up Family Golf Month вЂўDisabled Golfers вЂўBeginner Friendly Course Certification вЂўKids on Course вЂўDisabled Golfers вЂўCorporate Leagues, Outings, Tournaments Play Golf America www.playgolfamerica.com Implementing golf industry best practices вЂў Destination Marketing вЂў Best Practices in working with third parties вЂў National Alliance for Accessible Golf вЂўTournaments вЂў Leagues Executive WomenвЂ™s Golf Association вЂў Couples, e.g., wine and nine вЂў Teenagers, e.g., Hook a Kid on Golf, Get a Grip Fd. Programs that are working вЂўFamily focus Some TPC courses have been successful in including day care вЂўWine and nine for couples вЂўKids Play Free (MB) вЂўMusic and golf for teens in the afternoon after school A couple of courses have recreated the 1950вЂ™s drive in movie with an inflatable screen on the driving range with golf cars replacing cars and food and beverage served to their cars. The Clubs of Kingwood in Houston Four seater cars for women, private water park, $5 million dollar fitness center with day care, Family Fun membership, Young Executive Membership . . . less than a year up 500 percent. Beginner clinics for adults followed by cocktails or a progressive dinner served on each tee. Programs that are working Private Clubs John Beckert, ceo of ClubCorp in the 19th Hole of Oct issue of GB вЂњWhat will the golf club of the future look like? In my opinion, private clubs will continue to be golf-driven but will increasingly be about value and building relationships and enriching lives. In fact, thatвЂ™s becoming our companyвЂ™s core initiative. . . Although we cannot predict exactly what the club of the future will look like, we can work to create innovative programming. But unless it is relevant to members and we continue to help them connect with family and friends, it wonвЂ™t matter. People join clubs to be a part of something bigger. As we evolve to reflect the changing culture of America, operators must stay focused on building relationships and enriching lives.вЂќ Resorts Martin Kauffman in his Feb 24th editorial Resorts must define themselves вЂњto break from the crowd and establish a lasting relationship with consumers, itвЂ™s clear that resorts need to focus more on differentiatingвЂќ Course assessment % programs for children % of programs for teens % programs for adults % programs for families % programs for women % programs for the disabled Municipal Golf Course Assessment of the NRPA/PGA 91.7% programs for children 91.9% programs for adults 53.2 programs for families 78.5% programs for women 19.3% programs for the disabled Two Thirds of respondents do not offer an to Welcome Community Residents to the golf facility FIVE STAGES OF IDEA ACCEPTANCE 1. ItвЂ™s irrelevant to this situation. 2. ItвЂ™s relevant, but itвЂ™s unproven. 3. ItвЂ™s proven, but itвЂ™s dangerous. 4. ItвЂ™s safe, but itвЂ™s not sellable. 5. ItвЂ™ll sell, what a Great Idea! What a Great Idea! The Key Steps Creative People Take Charles Chic Thompson "The innovator has for enemies all who have done well under the old, and lukewarm defenders in those who may do well under the new.вЂњ Machiavelli, 1513 Customer Segmentation 1. Brand-loyal customers - Experience вЂў course or destination direct 2. Brand-agnostic customers - Experience вЂў any similar course in the same type and price point 3. Brand-disloyal customers вЂ“ Price driven вЂў Priceline, Last minute golf UNDERSTANDING COMMODITIZATION High DIFFERENTIATION experience service product commodity Low PRICE Programming Over Price High What What is is aa third third party party provider? provider? Anyone other than the golf course who books rounds Typically golf portals, golf packagers, wholesalers, travel agents, golf pass books, search engines Can be owned and operated by a group of owners and operators Example of Third Party Site Example of Third Party Site Example of Third Party Site Example of Third Party Site Example of Third Party Site Role of the internet . . . Loyalty to your course or a third party brand? Enabled by Internet Source: Marriott eCommerce (Frequency of Interaction X Intensity) Brand Experience Impact High Low Planning Booking In Transit On Property Post Trip Role of the internet . . . An effective way to collect customer data and preferences Photo contest Sweepstakes Packages Tee times Registrations for programs and events Sweepstakes etc. . . What is 1 Free Tee Time per Day Worth Colorado study Jim Keegan One Tee time per day 1 Sold to a foursome 4 Rack Rate For 30 courses For 240 golf season $30.00 30 240 Value of Free Golf $864,000 Percent being sold: 33 $285,120 Why Coupons Books DonвЂ™t Benefit the Course Colorado Study Jim Keegan Number Sold Rate per book Earnings to vendor 7,500 $79.95 $599,625.00 Free Golf Given Away 21 free rounds Total rounds donated 157,500 Cost per round donated Value forfeited by CO courses $30.00 $4,725,000 Colorado Study continued . . . The Harsh Reality вЂў The golfer who receives a free round typically will spend less in your pro shop. вЂў The golfer who receives a free round has only a 16% profitability of returning to that course and paying the rack rate. (Colorado study) вЂў Thirty eight (38%) of your core customers will migrate to the discounted rate plan with the first twelve months. вЂў Sixty four (64%) percent of golfers that redeem a coupon usually bring only 1 other player. вЂў Your average daily rate will be lowered up to 48%. Yield Management DoвЂ™s and DonвЂ™ts Example of hidden costs Flexible Model Average Price Wholesale Price (25% mark-up) Cost Percent Average Peak $ 60.00 $ 100.00 $ 48.00 $ 12.00 20% вЂў In the flexible model, the golf course can choose to close inventory when they donвЂ™t need the business preserving their profit. Allocation Model Average Price Wholesale Price (25% mark-up) Cost Percent Average Peak $ 60.00 $ 100.00 $ 48.00 $ $ 12.00 $ 20% 48.00 52.00 52% вЂў In the allocation model the golf course has very few blackout dates so they must offer inventory even in peak periods. вЂў The golf courseвЂ™s costs increase from $12 to $52 as they move into peak periods Why consider? вЂў ItвЂ™s an advertising medium and a distribution channel вЂў ItвЂ™s based in technology вЂў ItвЂ™s growing rapidly вЂў ItвЂ™s global вЂў It proposes to be вЂњfreeвЂќ вЂў I have to make budget вЂў Everyone else is doing it The The essential essential promise promise of of third third party party providers providers New and incremental business IF you chose to do business with a third party do you have an agreement in place to drive and measure this promise and have you proactively tried programs and yield strategies to increase your rounds and revenue per round? The perceived advantages: вЂўOffers to provide a means of marketing your facility at no direct out-of-pocket expense. вЂўOffers to be a means to reach new channel of customers and fill holes in your tee sheet. вЂўOffers to bring in incremental business, e.g., out of town golfers that you would not normally see. In many cases, the third party will handle the technology needs of the program. The The perceived perceived advantages: advantages: вЂў Control of tee sheets and databases вЂў Ease of analysis вЂў ServiceвЂ¦ease of booking for golfers & travel providers вЂў Productivity...yield management opportunities вЂў Improvement of staff productivity вЂў Potential for greater profitability The potential disadvantages: You lose control of managing the relationship with your customers. The golf consumer may be trained to look for and pay for only discounted golf. The perceived вЂњvalueвЂќ of your golf course is diminished in the consumersвЂ™ eyes and their willingness to pay full rack rate or book in advance is discouraged. вЂњThe internet commoditizers brands.вЂќ вЂњItвЂ™s all about price.вЂќ The potential disadvantages: Some third party wholesalers/discounters in specific geographic areas have grown in such scope they control so much of the tee time inventory they have gained leverage over the owner/operator, similar to hotels.com, expedia.com. The potential disadvantages: Third Parties can and have separated the owner/operator from their customer base. Separation from your customer base may fracture any emotional ties and sense of loyalty that is key in establishing repeat business. Operating yields decrease. The potential disadvantages: Third parties can and have generated advertising and other revenues by selling access to customers (вЂњeyeballsвЂќ) that come to their portals to book tee times at your course and this revenue is not shared with the golf course or courses in that market area. Who is your customer and prospective customer going to be loyal to? Purchasing online can be the deepest brand experience the customer has before actually stepping foot on your facility Do you want that initial experience to be with your course directly or with a third party. If it is with a third party do you have a contract that guarantees your brand message and price integrity? Consumers create demand Product - Price Supply Consumer Demand 1 week vacation in Palm Springs Intermediary вЂ“Expand reach to consumer Online Travel Distribution in Lodging Online Third Party Discount Supplier Direct Elements Elements to to consider consider before before entering entering into into an an agreement agreement Determine how many times, what days, and when you need to supplement your business List and evaluate what you are doing proactively to market, communicate, and promote your business Do you have structured programs targeted specific types of customers? Are you using email marketing and your website to build your direct channel of business? Create and manage loyalty and retention programs Build your brand promise on attributes other than price Focus on customer service with your staff Elements Elements to to consider consider before before entering entering into into an an agreement agreement Do your due diligence Ask for proof of results Check references Look for hidden costs, e.g., donated tee times Ask other owners and operators . . . Use the NGCOA member only listservs Elements to consider before entering into an agreement Run an analysis for each distribution partner. Key questions to answer are: вЂ“ How many tee times do you need to supplement your direct business вЂ“ After determining the number of additional tee times needed, then ask вЂў Which partner delivers the best revenue per tee time weighing in factors such as booking costs and allocations вЂў Which partner can deliver the most tee times when you need it. (not just during peak periods) вЂў How many partners do you need? If you can supplement your direct business with flexible partners, then you donвЂ™t need to enter into allocation agreements вЂ“ Be aware of sales traps вЂ“ Never be afraid to say no. Elements Elements to to consider consider in in aa contract contract Term - none Transferability - none Performance Standards Implied partnerships Control of your web address url, brand, content, trademarks, copyrights, photos, etc. Marketing approval Elements Elements to to consider consider in in aa contract contract Specify use of opentravel.org interconnectivity standards Control and protection of customer database Maintain вЂњmost favored nationвЂќ best rate guarantee Sell at retail whenever possible Control payment terms . . . You get your money #1 Avoid exclusive agreements of ALL types What What to to do do with with this this information information вЂўWork вЂўWork collectively collectively to to adopt adopt best best practices practices вЂўBeware вЂўBeware of of sales sales traps, traps, e.g., e.g., extortion extortion and and coercion coercion 101 101 вЂўPromote вЂўPromote best best practices practices with with your your circle circle of of influence influence вЂўPromote вЂўPromote best best practices practices with with allied allied associations associations Seek out the least educated owners/operators Seek out the absentee owners Promote best practices with allied associations Third party providers then act as fill in business with you in controlвЂ¦. Golf Golf course course owners/operators, owners/operators, accommodation accommodation and and attraction attraction providers, providers, and and DMOвЂ™s DMOвЂ™s gain gain the the best best results results when when they they take take control control of of the the process process for for marketing, marketing, selecting selecting aa computer computer system, system, automation automation solutions, solutions, web web services, services, packaging packaging and and save save time time and and money money for for themselves themselves and and the the vendors vendors they they are are considering. considering. Be Be proactive proactive .. .. .. Keep Keep control control of of your your tee tee time time inventory inventory Measure the effectiveness of your programs versus your competitive set of courses in your market Financial Benchmarks and Economic Impact вЂўProvide accurate, consistent set of metrics to educate owners, operators, buyers, seller and lenders access to more sources of capital at more favorable rates which will lower the costs of operation вЂўShape collective, accurate industry message to the general public and media вЂўServe as credible, consistent source of industry information used to formulate responses to governmental and environmental agencies вЂўDisseminate information on best practices for course owners and operators FIVE STAGES OF IDEA ACCEPTANCE 1. ItвЂ™s irrelevant to this situation. 2. ItвЂ™s relevant, but itвЂ™s unproven. 3. ItвЂ™s proven, but itвЂ™s dangerous. 4. ItвЂ™s safe, but itвЂ™s not sellable. 5. ItвЂ™ll sell, what a Great Idea! What a Great Idea! The Key Steps Creative People Take Charles Chic Thompson MISSION STATEMENT To enhance the lives of golf course owners by making their businesses more profitable, more efficient, better managed and more stable. What What is is the the NGCOA NGCOA doing doing to to promote promote best best practices? practices? вЂўEducation вЂўEducation вЂўChapter, вЂўChapter, national, national, and and allied allied association association meetings meetings вЂўMeetings вЂўMeetings with with technology technology providers providers вЂўPostings вЂўPostings on on NGCOA NGCOA member member only only listservs listservs вЂўMIS вЂўMIS Guide Guide and and Directory Directory вЂўInquiries вЂўInquiries from from individual individual owners owners and and operators operators вЂўPromotion вЂўPromotion of of opentravel.org opentravel.org Tipping Point Little Things Can Make a Big Difference You influence public opinion Be Passionate Be obsessed Have perseverance Be persistent Smile в�є and have Fun!!! Resources www.ypbr.com www.golfdatatech.com www.golfweek.com www.TIGglobal.com www.hsmai.org www.ngcoa.org www.golfbusiness.com www.golfindustryshow.com www.golf2020.com www.playgolfamerica.com www.juniorlinks.com вЂњMay the best times youвЂ™ve ever had be the worst that you will ever seeвЂќ CONTACT INFORMATION National Golf Course Owners Association Mike Tinkey Deputy Chief Executive Officer 800-933-4262 Phone 843-881-9958 Fax mtinkey@ngcoa.org www.ngcoa.org QUESTIONS & ANSWERS