I assume many of you are either at the PGA Show in Orlando right now or on the way to it. While latest golf equipment news are about the brand new golf club models, I think we should pay more attention to Acushnet‘s latest acquisition of Links & Kings, a Utah-based company dedicated to the design and handcrafted production of luxury leather golf and lifestyle products.
You can ask, what is so special in Acushnet’s latest acquisition?
Last year, Callaway Golf – one of the main rival of Acushnet – acquired two similar companies to Links & Kings:
- In January 2017: OGIO International, Inc. was acquired for $75.5 million in an all-cash transaction. OGIO designs and sells bags, accessories, and apparel for the golf, lifestyle, motorsports and endurance categories on a global basis.
- In August 2017: Callaway Golf paid $125.5 million in cash for TravisMathew, a lifestyle apparel company. The estimated net sales for the full year 2017 is around $55-60 million. Thus TravisMathew might contributed $10-15 million to Callaway Golf’s 2017 second half-year earnings.
What could Acushnet benefit from added-value services?
Now, we can wait when will TaylorMade follow its main competitors or make a bold strategic decision an invest rather in added-value services and exceptional customer experience.
Today, custom-fitting is a very-very basic added-value service of a golf equipment manufacturer that will not convince golfers to change to a new brand or the new model of the company.
Here I am thinking about services that can enhance the golf experience (e.g. Cobra Connect – FYI – the original technology of Arccos Golf was born in Callaway Research and Development; TaylorMade’s new Spider Interactive Powered by Blast putter).
In a previous post I have already listed some added-value service ideas:
- lounges at major airports (similar to the Mastercard Airport Lounge) or
- caddy service or
- golf bag transport or
- game improvement solutions.
The savvy customers today can recognize the value of the basic service/product and differentiate it from the added-value services. They are even willing to pay extra for such service features. Therefore, from now on golf equipment manufacturers like Acushnet, should provide better value for their customers’ money.
It will not connect better your customers to your company if you expand your portfolio without solving the golfers’ problems (e.g. what to do with the unused golf clubs that are in your garage for many years). You have to come up with relevant experiences for your customers.
When I am visiting the Titleist brand site, I can see a very self-serving, internally focused company and brand, even though I can find information about custom fitting services.
If companies like Acushnet continue to deliver only what customer expect, then they will lose to the competitors who have already invested in exceptional customer experience (both offline and online). Such level of customer experience should be delivered via all touchpoints to all customer types.
Let’s not forget the probability of selling to a new customer is between 5 and 20% versus selling to an existing one: 60-70%.
I must admit that it is not so simple to figure out what our customers value. It is really crucial to invest more in understanding our customers. It would help many companies if they could invest in:
- technologies that can enable a two-way, real-time conversations to gain actionable data (e.g. chatbots);
- the creation of extra customer data collection opportunities (help pro-shop employees to collect customer information easily: preferred features, colors, materials etc.);
- improving personalization.
Probably we should also reconsider our customer segmentation methods.