I frequently read reports on digital transformation. The most recent report I read was Altimeter’s The 2020 State of Digital Transformation.
I found in this report that the TOP4 drivers of digital transformation are
- Increase productivity to streamline operations (35%);
- Ensure that technology and data better support operations (35%);
- Working in a more agile, flexible way to take advantage of opportunities;
- Response to COVID-19.
Deloitte found something similar. They say the 7 digital pivots propel an organization’s progress toward digital maturity are:
- Flexible, secure infrastructure;
- Data mastery;
- Digitally savvy, open talent networks,
- Ecosystem engagement: working with external business partners (including technology incubators, startups, R&D organizations, etc.) to gain access to resources (e.g. technology, intellectual property, people),
- Intelligent workflows,
- Unified customer experience,
- Business model adaptability.
To do far more than simply implement new technologies. Successful digital transformation requires the coordinated integration of technology-related assets and capabilities across an entire enterprise.
I found this topic really interesting, urgent, and timely for golf clubs. Hence, with this interview, I will start a new series of interviews.
The second major topic of this series of interviews will be the pricing techniques and trends in golf clubs and golf resorts.
In this interview you will get answers from:
- Javier Reviriego – CEO/General Manager – Real Club Valderrama
- David Ashington – Director of Sales & Hospitality – Monte Rei Golf & Country Club
- Julián Romaguera – General Manager – Los Naranjos Golf Club
What are the key drivers of digital transformation in your golf club?
Digital transformation in a private club in which the average age of members is relatively high is not something to be taken lightly.
Many members are “not interested” so you need to make sure the process is gradual and very simple. The key driver for me is making things easier and improving service at all levels.
If you are going to implement changes to transform the club, make sure they bring solutions and not problems.
As an example, we have been working on a private App for members from which they are able to see their account, book a table in the restaurant, book a caddie, see the expected weather forecast, sign up for tournaments, see the condition of the course, etc.
In any case, I believe that attracting younger members will be essential for the survival of “traditional” private clubs and that going fully digital will be absolutely vital for the future.
Digital platforms are fundamental towards international branding and awareness, over the last few years our investment has increased considerably.
This has become more of a necessity now that digital platforms are more widely used by all age demographics and evermore by the golfing market. The data received is also very useful for evolving the offering.
Most of the digital transformation happening at Los Naranjos Golf Club has been mainly oriented to creating more dynamic and adaptable platforms for our members and clients, being able to collect the lead and also improve the customer experience when booking and finding information about the club.
It is a reality that most of the time we are surfing the net or on social media is from mobile phones. We have also worked hard to create a very intuitive website that will allow us to perform in the sale of greenness.
If you have a package of hotel + green fee from which one would you rather give a discount?
I think in general, hotels and resorts have always viewed golf clubs as a “complementary service” and when arranging packages they have always tried to “lift” the room rate instead of the green fee rate.
The perception of many hoteliers is that the golf course is there and that it has no cost to discount or even provide complementary green fees to improve package sales.
This is an erroneous conception of the business: golf course maintenance is expensive, especially if you want to provide good quality. I would also argue that many clients visit the hotel only because of the golf course.
Golfers want quality experiences on the course and many times they are not so concerned about the hotel.
So in summary, my answer is that the discount should be spread equally and never fall on the course only.
Monte Rei does not discount, we are a small and exclusive property aimed at HNW individuals that are procuring our style of resort for their leisure or golfing vacation.
Although we do not have a hotel at Los Naranjos Golf Club, I would always recommend building more value in our products and offers than putting the prices down.
How do you improve the golf club membership payment discipline?
Mandatory direct debit of all fees and charges. If members are not willing to accept this form of payment, then they should not receive credit.
In the current environment, golf clubs cannot afford to have outstanding dues.
It is very important to have a clear understanding if we are referring to a shareholder or standard membership.
However, it all should start sometime earlier through effective communication about the price of the annual fee.
The different options to be paid, a small idea of what the club is planning to do in the next year, and the penalties for late payments.
In my experience, it is more comfortable for the member and also for the club to proceed to auto-debit with the bank.
How do you mitigate the size of discounts on membership fees, green fees, pro-shop prices, etc.?
Some members have a general misconception that services and goods in a club should be cheap because they are members and the club should not look at making money of them.
Golf clubs’ survival depends on dues and margins in the services provided to its members. You cannot sustain salaries and general costs if you have to sell your products at almost cost price.
I believe members should have a better price than visitors but anything over 10% discount will most likely affect the P&L of the club greatly.
Monte Rei does not give discounts.
Each golf club has a completely different scenario, needs, and obligations. However, our club did not make any discounts on the annual fee as the maintenance and expenses of the club remain the same.
Taking into consideration the restrictions established by the Spanish government, we have adapted our tournament calendar to make sure our members still enjoy the club even in challenging times and a safe environment.
We are fortunate to say our members have fully understood the difficult time this COVID-19 is causing to the tourism and therefore also, to a good part of our yearly revenue as a semi-private club.
Discounts at the pro shop usually depend on the stage of the product at the pro shop.
This means that it will depend on
- the turnover rate of these products and the category they are in the inventory,
- the time that the product has been in the pro shop, and
- the inventory management strategy followed by the club.