STOP DISCOUNTING GOLF!

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I have one word of advice for the golf industry in 2011, STOP pricing yourself into oblivion. Find a reasonable price that works for you and the player and stick with it.

Don’t have 20 different levels based on the phases of the moon.

I never did understand why a round of golf is $65 at noon and $40 at 2:00 PM when it’s not dark until 8? 

Do not trade websites for TEE TIMES! It’s moronic, seems like a deal, but destroys your price integrity. Pay them for the site, and you will avoid a bunch of foursomes showing up at your counter having paid $40, for the entire group! If you must trade times for services, make sure that GolfNow, CourseTrends/Golf18Network, and or any of the other vendors are not discounting your times at 95% Off!

The more this happens the worse it gets for your reputation. The website company doesn’t care what it gets for your tee time because ANYTHING is better than nothing! (Also shows how desperate the website company is)

 

Do not trade tee times for an online booking service PAY THEM and control your price in the market!

Do not trade tee times for ads, Pay for the ad, it’s cheaper in the long run!

Do not sell tee times on e-bay to the LOWEST bidder

Do not give different pricing to golf cards or for that mater anyone.

Set a price (or three prices if you must) and then stick with it!

Add value but don’t discount!

Amen!

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31 Comments

  1. Martin:

    I’m not religious but amen to NO discounting and no barter. That is why we created Boxgroove.com back in late 2008. This is a market based platform for private clubs to generate incremental revenue and exposure to new members. They control all aspects about the tee time on our site. Take a look. Over 6% of the private courses in the US are using Boxgroove in just 18 months.

    Hope readers of you column enjoy golf in 2011.

  2. I respectfully disagree. A single price point for all times, etc will leave you with lost revenues plain and simple.

    I agree that most course operators have not the slightest idea how to effectively manage the tee sheet optimizing rate and capacity but to simply state it is wrong is dillusional.

    If you don’t understand why a rate at noon is different than 2pm (as an example, maybe not one i would use) than you need a better undersatnding of your customer’s desires or you are at a course that is not facing stiff competition like the rest of us.

    Discounting can be your best friend or worst enemy. Do it right and you will be greatly rewarded, do it wrong and you will be up for sale.

  3. Martin,

    Curious as to what expertise you have to be able to make such claims above. You don’t sound like an operator, just someone trying to make a point. Most perishible commodity businesses today do some form of demand based or dymanic pricing. Why should the golf business be any different.

    • Martin Wellbourne on

      Thanks for your comments, although not working at a club right now I have managed many operations large and small!

  4. I can’t agree more. The golf business has been backward for years. We need to follow the airline model and keep prices at rack when they are booked close to when the customer wants to play. 50% of my play books the day before or walks in the day of. Why should I give them a break?

    • Keith Miller, PGA on

      The reason why they book the day before is because they can. The reason you need to discount the rate is because there is to much supply. Airlines control the supply so therefore they can do what you say.

  5. MW~

    I don’t agree with this. I do get your point that courses discount WAY to much and have WAY to many price points, but you need a little of both. What company doesn’t discount once in a while? I can not name one! As for price points, golf courses are just looking to get more people on the course at off-peak times.

  6. I think in general MW has it right. Too often every foursome has a different price, it destroys the price integrity. But every operator has to figure out best way to maximize revenue. Have an empty time on your tee sheet every week, try enticing players with added value or discount, but track which players show up, you might find all you have done is moved an existing customer into to a new time slot.

    • But the industry has changed Joe. You can no longer price each tee time the same. I agree that the “blanket discounting” concept is very bad for the industry. You cannot “set it and forget it” discount on an ongoing basis.

      You HAVE to manage your tee sheet and be able to make pricing changes on the fly based on factors such as utilization, weather, course conditions and days in advance.

      The rack rate as we know it should go away. Instead courses should publish a rack rate range. “Fees range from $60 to $75.” Consumers are used to paying more or less for a commodity based on timing, convenience and other factors.

      Simpleton articles like like this that declare “all discounts are bad” are just repeating the tired rhetoric from lazy course operators who are not willing to put in the time to manage their tee sheet and maximize high demand and discount lower utilized periods.

  7. Quinn…Amen! Very well stated.

    Discounting is relative and discounting will not go away. Example – Senior Rates… Why do they exist? Try now to eliminate them? Can it come less frequently? Yes, when about 2,000 golf facilities nationwide are eliminated from the supply.

    Do I agree in trading websites for golf etc… not at all. I would much rather control my own future and manage my own tee sheet. It is the life blood of the business, and whether I get $40 or $65 for that 2PM tee slot… it is time I can never re-capture.

  8. As i was trying to state and articulate is that discounting today is for the most part out of hand and NOT done correctly. To say however that it is wrong and counterproductive is not smart for any operator.

    The path of least resistence is to either have no discounts and use the reasoning that the course plays the same for all, at all times and therefore should be priced the same, or discount relentlessly without rhyme nor reasoning just to help fill the tee sheet.

    There is a better way and more productive way but it is a lot of work and takes a committment.

    Good points Allen.

  9. There are basically four ways that golf courses (and other perishable inventory businesses like airlines and sports ticket sales) can run their businesses. First, they can establish their price based on profitability goals vs. expenses, and hope that they hit the number right (this is how the golf industry has operated for the most part in the past 50 years). Second, after seeing a decline in business they can revamp and lower their pricing and their expenses to maintain profitability (some operators have tried this but realized that the ability to raise prices back to old rates is next to impossible). Third, they can hold on to their rack rate pricing and then when faced with unsold inventory, use last-minute discounting to fill open tee times hoping they drive enough rounds to maintain profitability (this is the golf industry of the last 8 years). Finally, fourth is to yield manage your tee sheet by creating a demand-based pricing model that effectively allows you to price your rates based on your ability to sell your inventory by time-of-day, day-of-week, or by how far out they book. Most of the perishable inventory businesses like hotels, airlines, and sports ticket sales have all moved to this fourth model and most due to technology are achieving some level of success while literally none of them is doing any of the first 3.

    My point to this long winded statement is that to run a golf course in this day and age takes tons of experience and wisdom, along with a good understanding of your market. To post what Martin did and just say Stop Discounting is ridiculous to many of us that have spent our whole lives in the golf business!

  10. I can’t wait for the day that we no longer discount golf. I hope its this year. I stayed in business with 14 golf courses through the worst weather, bad economy and bad banking conditions, I would of been like all the other courses around us, OUT OF BUSINESS if we didn’t adjust to what the market could bear. Don’t kid yourself, its still going to be a difficult year.

    Hey Walmart keeps gettiing bigger, Hmmmm wonder why? The customer today is smart, they know your price before you even post it, guess what they use a web site, or a text message to find out what the deal of the day is.

  11. Golf Facility tee times have limits.
    Golf is a weather dependent business.
    There is such a thing as “prime time” golf.
    Only so many golfers can start in a given hour on a golf facility, depends on the facility design and pace of play.
    Golf Facilities have maximum income potential.
    The modern era of golf has created too many incompetent “revolving door” “PROFESSIONALS” with no vested interest in their product.
    These “professionals” do not own the shop, range, or carts, and are not business people, but are “clerks”.
    The PGA of America has over 28,000 Members. There are 18,000 green grass golf facilities in the US. Of those 18,000 facilities just about 9,000 golf facilities have PGA Affilliates working for them.
    The other 19,000 members within the PGA are basically “shoe clerks”.
    The PGA creating “shoe clerks” with the initials PGA has ruined the grass roots organization – and the game of golf.
    PGA, led to corporate America turning golf facilites in to “cattle farms” and taken the green grass golf businss (golf courses) and ruined the game of golf.
    Golf Facilities need their “business front operators” (PGA Professionals) to have a vested interest in the success of the operation and to be able to play golf and offer golf events as a source of activity to their customers, not be shoe clerks!
    All the “college degrees” in the world, will not assist someone to “have fun” at golf!
    Reply

    • Mike,

      Great points here – I completed the trainign program and was elected to PGA Membership in 2004. Upon completion of the program, they asked me for feedback and I told them we needed a Marketing and Sales training course(s) added to the program to prepare PGA Members for an increasingly competitive industry. Now, 7 years later, there’s still no sales or marketing taught to new PGA Members by the association!

      One of the best training programs anyone can invest in is coming up in just a few weeks in Crystal River, FL – Andrew Wood’s annual Golf Marketing Boot Camp. See http://www.LegendaryBootCamp.com for details. I can’t recommend this program highly enough for anyone that wants to learn how to add an additional $50,000 to $250,000 of profit to their club this year by completely out-marketing and out-selling the competetition!

  12. I do not like discounting, however, in an area when all other courses ARE discounting rates, I feel we have no other option, because a lot of golfers in many areas of the country could not care less about WHAT they get for their golf, they just want to pay the LEAST amount possible. And if that cost is not at your facility, they move up the road. I agree with Al W on the 4th option is the best, and I ESPECIALLY agree with the last paragraph, on facilities needing experience and knowledge, instead of little or no experience and “think they know it alls” or “wannabees” (simply to save $ in the budget) at the helm. The golf business has changed in my (almost) 30 years experience.

  13. I manage a small municipal golf course, and we have limited discounts available— mostly through a monthly online coupon. As a rule of thumb, I try to limit the window for discounts to 12 hours a week. My predecessor went crazy with discounts: his rate sheet was only slightly shorter than “Moby Dick,” and nobody ever paid full price for anything. You’ve got to value your product— don’t make excuses for your regular rates, and make sure your customers understand the value that they’re getting.

  14. Mr. Wellbourne,

    1 – Do you own and operate your own business?

    2 – Can you provide 3-4 examples of successful companies that do NOT do selective pricing and bartering? Here are a few that DO selectively discount and barter:

    – Apple (I just got a discount for buying 5 iPads)
    – Best Buy (I belong to their Silver Platinum Club and get a discount)
    – Ritz Carlton
    – Hilton (I get free rooms as a loyalty member)
    – Southwest Airlines (I fly late at night to save money)
    – Delta Airlines (see above)
    – Every restaurant in the U.S.
    – Walmart
    – Mercedes Benz (I wait until the model closeouts at the end of the year and get a discount)

    3 – Can you please provide 2-3 GOLF COURSES in the U.S. that are doing well that do NO discounting or bartering? I would like to contact them to learn how.

    I look forward to your response.

    • Kevin has a PGA professional with almost 40 years of expertise in the golf industry I believe that serious just Kaina have your golf course only leads to degration of what people will pay to experience your product I am the general manager at a private club in South Carolina and although we have rates based upon the season of the year we do not discount golf to any type Of would guest play. Providing a quality condition golf course with great service on a consistent basis has always brought in a significant number of golfers and we run the facility any terrific profit if more golf courses maintain this type of mentality they would be successful the degration of golf in rates started with the establishment of golf cards in the nineteen eighties and continue to grow through today when we have web-based discount sites that are running their business off of your business and providing no significant amount of support financially to the operation

  15. Martin Wellbourne on

    I have owned many businesses over the years.

    There are 100’s of companies that don’t discount even in these times because they have built brand and therefore value in the mind of the customer. Rolex, Ferrari, Armani and any high end plastic surgeon in NY, LA or Miami come to mind!

    • I agree with you in principle; however the problem with that statement is most golf business is local. With the exception of a select few (Augusta, Pebble for example) how many people operate golf courses that are Rolex’s or Ferrari’s? If you take this attitude locally and don’t understand your product in the customers mind you are in trouble my friends.

    • Rolex, Ferrair and Armani are the examples you are using? Seriously? The only comparable brands in the golf business similar to those can be counted on one hand. It’s a poor example.

  16. Amazing…

    Wow, this is brilliant. I hope Martin doesn’t hide this genius logic from other industries. The market for this new economics vision is huge.

    Last time I checked, a number of those stupid NFL franchises were discounting high altitude goal post seats relative to 5th row 50 yard line seats. How insane of them, everyone gets to see the same game in the same stadium; shouldn’t everyone pay the same price? Of course they should. And they will by God…once the genius of Welbourne economics is fully understood. After all, just because some people find some seats preferable to others or some tee times preferable to others (weekend mornings vs. weekday afternoons), why should that have any impact on price.

    Wow, I think I am seeing a pattern here, concert seating, blue plate specials, and end of season coat sales. Wow, how stupid can these marketers be? Who cares if it is the end of the season or a 3 to 5 PM supper? Pay the prime time rate. Florida golf in the summer on 98 degree afternoons should cost the same as they charge on a 70 degree January.

    I have now seen the light and will forever reject supply / demand economic theory.

    Welbourne might have had a real article had he injected a modicum of thought. Perhaps he should have suggested that a course should have a minimum baseline price. This might be the current lowest price the course charges, maybe what is today their weekday twilight rate. From this point, instead of discount rates, we have preferred tee rates. Rather than start with the highest rate and saying never discount, we start with a base rate and from there have prime time / preferred time rates. It is in some ways the same model, but without the stigma of the word discount. Psychologically it makes us feel better, because instead of feeling bad selling a discounted (twilight special…base rate) all other times sold our up-sales of premium times. But is this really marketing? Are we now making ourselves feel good at the expense of the customer? Maybe “discounts” make the customer feel good. Same rates but the terminology is different. One makes the course operator feel good, the other makes the customer feel better.

    Maybe we should always display a one price rack rate. If you walk in, that’s your rate. We then offer specific targeted day of week and time of day discounts coupons. They are our old walk in weekday and late afternoon rates. But the golfer with the coupon feels he got even greater value. He got an “insider’s deal” with his coupon. He sees the one price rack rate, and knows he got a deal. When the twilight rate was posted, he just felt like. O-well that’s the twilight rate. Of course 90% will use the coupon, but it is just the old weekday rate or late afternoon rate.

    Think about it. When you buy that $120 shirt for $60, the retailer does not take off the $120 price tag. We see the “rack rate” $120 price and feel great that we only spent $60. That same psychology would hold true to golf if when the golfer walked in he saw a fixed price. Then when he had a late afternoon coupon for 1/3rd of the rack rate (the highest cost rate, weekend morning rate, but now your new all the time rate) he would perceive a much better value proposition than when he walks in and now pays the rack rate discount that is posted. Psychology of pricing is an important component in marketing.

    I feel bad now. I now get it. Martin’s article dated 4 January must have been written after a New Year’s hangover. His overly simplistic no substance nonsense is now forgiven.

    • Martin Wellbourne on

      From your rant should I conclude you must be connected to the business of selling discounted tee times?

      I agree with making the customer feel good but not by destroying the business!

      Clubs should try offering more value before just slashing the price. A Free cart, range balls, hot dog, beer, balls, cap, shirt……

  17. golf course owner on

    As an operator, I believe there is a lot of merit to the idea of simplifying quoted golf rates. As a golf course owner, this is something we have resisted as much as possible. If the patron knows what rate they are paying and likes the product you provide, they will be back. Too much discounting (and to much complexity to the rate structure) is not only confusing but it can be a downward spiral that cannot be stopped once it starts. As an operator our goal in 2011, is to survive and you don’t do that by giving away golf for below your operational costs that simply devalues your brand. We will let the other courses operate in 2011 at a loss (with more rounds), as we are simply looking to break even and preserve our preceived value and not further diminish our brand through aggressive discounting.

  18. Mr. Welbourne, you have to be joking when you bring up ‘image companies’ such as Rolex, Armani, etc. Golf is not an ‘image business’ my friend. Come work in a golf shop, change some spikes, take a few tee times over the phone, and try to convince someone to buy a $65 golf shoe. You will quickly be humbled, and perhaps gain additional knowledge of the business. To tell an industry to STOP DISCOUNTING is like telling Wal-Mart to stop rolling back the prices. Sometimes, when you need to pay the rent, you need to do what you need to do to survive. All the other rhetoric is, well….rhetoric.

    • Martin Wellbourne on

      The response was in keeping with the examples Kevin gave. You will also find one high end daily fee in every market that has a quality brand and can charge a lot more than the next best course!

      FYI I did the pro shop thing and the bag room and the cart barn! There will always be room at the bottom of the market I’d just like to see some clubs make the mental effort to go the other way! It can be done!

  19. AFTER READING ALL THE ABOVE COMMENTS TOM AND I HAVE A SIMILAR ISSUE, THE COURSE I MANAGE WAS A LITTLE ROUGH AROUND THE EDGES TO SAY THE LEAST WHEN WE OPENED IN 1993.WHEN THE PREVIOUS GM STARTED HERE IN 2001 THIS PLACE WAS ON THE VERGE OF BANKRUPTCY,BECAUSE OF SIMILAR THINKING OF MR. WELLBOURNE FROM 1993-2001 SO WHEN MY PREDECESSOR STARTED COUPONS AND ONLINE BOOKINGS,DISCOUNTING ETC. THIS PLACE TURNED AROUND AND WE WERE ABLE TO UPGRADE OUR COURSE BECAUSE WE HAD MONEY COMING IN TO DO SO THANKS TO THE DISCOUNTS. MY PROBLEM NOW IS I CANT GET ANYONE TO PAY FULL RATE I WISH YOU WHO ARE NOT IN THE GREEN GRASS SIDE OF THINGS COULD HEAR WHAT A PHONE CONVERSATION SOUNDS LIKE IN EARLY SPRING OR LATE FALL WITH PEOPLE WANTING TEE TIMES ITS A BATTLE EXAMPLE:
    ME:GREETING
    GUY ON PHONE:HOW MUCH FOR 18 AND CART
    ME:SIR M-F $27 SAT-SUN $35
    GUY:HOW BOUT A SENIOR RATE
    ME: M-F $21 SA-SUN $27
    GUY:WELL THROUGH BOOKING COMPANY ABC I CAN PLAY COURSE X FOR $14 AND COURSE Y FOR $18 SO WHAT CAN I PLAY YOUR COURSE FOR NOW.
    DO THAT 30+ TIMES A DAY….. SO I SEE BOTH SIDES OF ARGUMENT ITS TURNED INTO A AUCTION AT THE COUNTER TO GET THE PLAY SO MANY COURSES ARE GIVING IT AWAY YOU ALMOST HAVE TO AS WELL TO STAY COMPETITIVE I HAVE TWO OTHER PUBLIC COURSES WITHIN 8 MINUTES OF MY DRIVEWAY THIS IN A CITY OF LESS THAN 20,000 SO COMPETITION IS HIGH. I have been in the golf industry for 18 of my 32 years, retail,green grass,rep,marketing,bag room, caddy, player and I have never seen the golf biz in such disarray the online bookings and discounts are killing me in the long run, but if i take them away or cut them i risk the chance of losing the business all together. any suggestions

  20. Magazine Publisher on

    WOW, Is There Any Answer!

    Only an idiot for lack of a better word, would ever believe DISCOUNTING will ever go away in the golf business. Bartering with online tee times services or POP software on the other hand might be the stupidest and laziest thing (for the course owner) they could ever do — by it’s great for the provider. I’ve been publishing a Midwest Golf Magazine now for 11-years and my background for 30 years as been in advertising and marketing. Through that time have seen GM’s change at over 60 golf courses in the regions our magazine serves. Most last for 4-5years some less. None of those GM’s has ever asked for my advice on ho to better market their golf course even after my repeatedly telling them I would be happy to help with has many ideas on how to increase rounds or bring more customers to their course. Yet nearly all advertise in our magazine. Some are creative marketers most have no clue and leave it up to us to, simply run “image Ads”; what I call the lazy man’s solution.

    There in lies the problem with far too many golf courses. The first year of a new GM is normally full of new ideas, marketing concepts, a host of great changes. Then each year to follow they simply want to hammer people with E-blast, Facebook and all the free stuff that everyone is deluged with daily in their in-box. Trust me; the person you’re sending E-blast to know very well — it’s free junk mail you’re shoving down their throat. Why, because it’s free and it is a lazy man’s approach to marketing.

    Learn how to properly and effectively discount, — when, how, and why. And, for goodness sake, take advantage of free marketing help or seek it out. You may be a great golf course manager or operator but they did not teach you a thing about marketing and sales in PGA school. Lastly keep the same enthusiasm that you had in year one of your job at your course — don’t be the proverbial “Lazy Golf Pro” and realize golfers have been conditioned to take advantage of discounts in order to play more golf and more often. That should be our only goal in this industry, how to get golfers playing more golf. when that is achieved we all prosper.

  21. Martin Wellbourne on

    You hit on the key point most people discount because they are too lazy to think or try other ideas! So they follow like sheep and discount like everyone else!

    THINK
    TRY new things
    Experiment!!!

  22. “I have never believed in discounting as a long term marketing strategy – that does little but erode revenue from your best customers. But short term discounting, used occasionally, can boost rounds, data and dollars. It’s especially exciting if you do it using someone else’s marketing resources because most of the play is found money!” – Legendary Marketing

    So do we discount or not, I’m getting confused messages here.

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