An often-quoted idea is that golf clubs should understand their customers and create customer profiles. In recent years, more and more golf clubs have begun to recognize that it is not enough to know what our golf club customers are, but also who they are (e.g. preferred playing time, probable duration of the round, reservations or prefer to walk-in etc.).
If we know the profile of the most profitable customers for a certain tee-time period, our sales and marketing activities will be much more effective. Identifying of customer types by playing time zones increases your ability to gain insights that are necessary for the development of the most relevant offerings. This way of thinking also contributes to a better customer experience.
When you combine the buyer profile with the buying insights, you have clear guidance on the choices you need to make to sell more green fees, but also golf club membership.
We should not only focus on the green fee/tee time function of the club, as this will probably cause the golf course operator to ignore other revenue streams and opportunities.
Golf course managers understand that golfers’ demand for tee times is very variable (e.g. the demand on weekends, in summer, is usually higher in certain hours of the day). Golfers tend to focus their interest on peak times of the weekdays and weekends. Without segmenting the time zones and adjusting prices accordingly, this leads to frustrated operators’ best customers, as the time needed to play the round does not meet their expectation.
At the same time, we should not forget that unsold tee times are also part of the golf course inventory as well. The development of markets for these unused time zones is, therefore, an undertaking that requires new strategies.
The aim is to find the most profitable customers with the right tee time offers.
Golf clubs should accept the fact that their customers are looking for meaningful experiences. To keep existing customers and to expand the game, course operators need to be flexible. To be relevant for the potential customers the service must be designed to improve their lifestyles.
The focus should be on the individual preferences of customers.
Yield management & green fee revenue
Yield management is a widely used method in the airline, hotel, and rental car industries. Recently it gained attention in the golf industry as well. The essence of yield management is to reconcile the time of performance with the customer’s willingness to pay for the service rendered at that time.
Yield management is not a discounting strategy, price differentiation should lead to an increase in prices in peak time and a discounting of edge times pricing.
Yield management should bring occupancy rates closer together in different periods and open the market to price-sensitive players. If properly set up, the new pricing should increase the participation rate of golfs and attract new players to the game.
We can say that yield management is a combination of price/stock information systems, it sets pricing strategies to allocate the right service (in our case tee time), to the right customer at right time.
The right tee time means that it brings the greatest benefit to the customer. Of course, “right” also means advantages for the club (e.g. extra revenue, in non-peak times, customer satisfaction etc.).
In practice, this means that prices are set according to the forecast demand so that even price-sensitive customers will find tee times that fit their pockets.
To be able to shift the demand the club manager must be able to predict the peak and valleys intraday based on sun and season. Seasonal demand and setting of a high and low season should be monitored based on past experience or by observing reservation patterns.
The aim should be to gain control of customer demand using time- and price-related strategic levers.
Gain control of customer demand!
Golf clubs have got two strategic levers: round duration control and demand-based pricing. Before you would start a revenue management program you would need to know the capacity of your club.
Determining the capacity of your club is not an easy task. It is strongly influenced by the tee time interval, game speed, hours of operation, course design and management practices.
To be successful, it is necessary to reduce the uncertainty of arrival (e.g. by confirming the reservation by phone, enforcing a no-show fee, advanced payment etc.), the duration of the game (e.g. golf carts, use of suitable technology (e.g. Tagmarshal) etc.), and the tee time interval (8-11 minutes).
The hotel industry calculates its income from the revenue of the available time-based inventory. E.g., hotels calculate their revenue per available room-night (RevPAR).
Following this logic, clubs should measure the revenue per available tee-time. There are several factors that influence the available tee-time. However, not all of them can be controlled (e.g. bad weather with a deviation from previous years has the greatest influence).
It is strongly recommended to break down historical demand information by season and day of the week.
Solution
The demographic profile and the lifecycle model of the player is the beginning and end of the story of their buyer personality. Marketers gain far more value from buyer personalities when they include the story of their buyers about the decision they want to influence. We need to understand who our customers are, not just what they are.
Club managers must identify their customers by identifying things they love or hate emotionally and how they want to experience it. Based on what they like (discounted prices in non-peak time) and hate (e.g. more time to play a round due to high occupancy rate) we can identify and create customer types. The effectiveness of a yield-management program depends on the ability to segment the market by customer type.
The focus should be on the individual preferences of customers regarding time zones.
The buyer profile conveys a feeling of human contact with people we have never met in person. This allows us to build relationships with a unified group, as we do every day with friends through social media.
Knowing what triggers your buyer’s decision to prioritize and invest in a service such as your club’s offers, you have discovered the first of five buying insights that will help you align your marketing strategies with the expectations, needs, and goals of your customers.
When you combine the buyer profile with buying insights you will have clear guidelines for the decisions you need to make to win their business. In this way, you can match the most profitable customers with the right tee time offers.
If the course operator extends from 4 times to 12 zones, more price and inventory information leads to more customer searches on the Internet. By offering an online tee time sheet, customers can find inventory and price combinations that are not visible when they call the reception desk.
To define the right product combination, one should consider how to examine and calculate the value/price equation for the different periods offered by interviewing tee time players and club members. Relevant messaging strategies can generate last-minute sales; customer interviews can lead to new approaches offering product bundles and new pricing strategies.
By focusing on an excellent price-performance ratio for each of the periods offered, operators can increase customer satisfaction and turn customers into marketing ambassadors (e.g. word of mouth, positive reviews and sentiments and mention in social media).
Customer Relationship Management (CRM) and club management software should review members and green fee players based on time periods played and analyze and identify the characteristics of the most profitable customers per time zone by spending additional money in affiliated service departments.
Clubs should combine customer intelligence, club management software and CRM to create engaging messages with incentives that even grannies can understand to motivate the most profitable customers to play more often.
Micro-segmenting customers profiles based on the playing time zone is data-driven; clubs (both private and public) and golf resorts will need to improve these business capabilities to remain competitive and relevant to their customers.
The optimization of revenues per time zone creates a pearl chain of periods that not only helps increase tee time and membership sale in non-peak periods but also improves other golf club service sales (e.g. pro-shop, F&B, spa, gym) and profitability.
Sources:
- Sheryl E. Kimes and Lee W. Schruben: Golf course revenue management: A study of tee times intervals (2002)
- Adele Revella – Buyer Personas: How to gain insight into your customer’s expectations, align your marketing strategies, and win more business; 2015, Wiley & Sons, Inc.
- Gary Cokins: Performance Management (John Wiley & Sons, Inc., 2009)