Golf Blog | Golf Convergence

by J. J. Keegan, Managing Principal of Golf Convergence
Author of the ING Media Award-Winning Book
The Business of Golf—What Are You Thinking?

The proliferation of technology in its diverse forms (desktop, laptop, smartphone, and iPad) has transformed the American culture. Facebook, texts, and tweets dominate, consuming our leisure. We truly have become a time-crunched digital culture.

In 1899, Thorsten Veblen wrote, “Golf is a game of the leisure class.” Veblen felt that while sportscould be advantageous to the community, the true reason for the popularity of sports wastheirusefulness as a means of displaying conspicuous leisure.

When the essence of each of our popular sports is considered, (people running with a ball to a goal, shooting a ball into a hoop, hitting a ball and running around a diamond, or flailing with sticks at a sphere hoping that it drops into a 4 ¼-inch-wide hole some hundreds of yards from the starting point) sports, at their root level, are inane. However, regardless of their elemental merit or lack thereof, they provide entertainment to the masses and have evolved into big business.

That makes us ponder that assuming the availability of leisure is a fundamental criterion for the sustenance of a sport, has our evolution into a digital society effectively capped the potential for golf? Alternatively, does the digital age provide an opportunity to more effectively serve the consumer by leveraging the new media it has created?

It’s a Mad World- Digitally

First, let us consider how pervasive technology has become. comScore, Inc.,the nation’s leader in measuring the digital world, just released its “2010 U. S. Digital Year in Review.” It reported the following:

The average person spends 4 ½ hours per month on Facebook. The top five Websites (Facebook, Google, Yahoo, Microsoft and AOL) generate 45% of all activity as consumers purchase $227.6 billion in goods from the leading categories: 1) Consumer electronics; 2)Computer Hardware; 3) Books and Magazine; 4) Flowers, Greetings and 5) Gifts and Jewelry & Watches. Three out of every five Internet searches are made using Google. Facebook now accounts for 12.3% of total time spent online in the US.

Facebook reports that among its 500 million members, 50% log in on any given day. An average of 10,000 new Web sites integrate with Facebook every day, and more than 2.5 million Web sites have now integrated, including 80 of the top 100 U.S. Web sites. Does anybody have a life?

How can a golf course, which is a small business that most often generates $2 million or less in revenue, keep abreast of thesweeping changes necessitated by an unwritten update mandate? In wrestling with this challenge, the golf course owner surely can identify with the lyrics from the song “Mad World” which are so prescient:

• All around me are familiar faces
• Worn out places, worn out faces
• Bright and early for their daily races
• Going nowhere, going nowhere.

• I find it kinda funny, I find it kinda of sad
• The dreams in which I’m dying are the best I ever had
• I find it hard to tell you, I find it hard to take
• When people run in circles, it is a very, very
• Mad world, mad world

The Implications for the Golf Course Industry

Golf course owners have developed a yoga-like mantra, “The economy is bad, the market is oversupplied, there is no credit, the golfers are gone, woe is me.” The brand image for the industry has become Eeyore from Winnie the Pooh.

With the rapid deployment of new functionality by leading software vendors featuring email marketing, online reservations through third parties, and social media integration, the sense is that golf courses may becoming overwhelmed with the pace of new technology introductions. Golf courses are constantly wrestling with the integration of the tee sheet with the POS system, developing a meaningful online presence, optimizing SEO key words, developing effective marketing campaigns, and debating whether Facebook, Twitter, Linked-In and Google Adwords are relevant to their business or actually distractions.

With the forecasts for 2011 reflecting an increased enthusiasm for the game, how are golf courses going to allocate scarce resources?

In looking ahead to 2011, comScore provides a clue, stating, “Businesses that have no social media presence in 2011 are likely to be left behind. However, social media may not necessarily be worth significant investment for every company or brand. It is important to understand how your consumers may or may not use the medium.”

The insight posed by comScore about how social media will continue to be used prompted us in early March, 2011 to conduct a national survey of golfers to ascertain if their use of social media is significantly different from that of the mainstream consumer and whether golf courses were responding to recent trends.

The results provided fascinating.

Rather than focusing on the obvious of spending efficiently, optimizing effectively, and growing exponentially, golf course owners are skipping from new idea to new idea like the beginning golfer trying to find a swing. Golf course owners are hoping to trip upon a new business solution as a panacea for their woes.

How Was That Conclusion Derived?

Fifty percent of owners feel social media is essential, while 48% are unsure as to its use. Only 2% expressed that social media at their facilities had no value.

The survey conducted (available in full at www.golfconvergence.com) asked golfers 25 questions and course operators 37 questions regarding their use of technology. Question included the following:

Golfers:

• % of golfers who book online
• Whether they are supportive of “permanent tee times”
• Where they look for special prices
• Are they willing to pay a premium for GPS?
• How much of each email they actually read
• % who use Facebook, Twitter and Linked-In
• The computer device (desktop, laptop, Ipad, or smartphone) they rely on most
• % of work day spent on a computer

Golf Courses:

• Median cost to install a golf management solution
• Average annual upgrade and support fees
• % who licensethe software and % who own
• How long they have used their current vendor
• Size of customer email databases
• Number of golf courses using Facebook and Twitter
• Their opinion on the value of Social Media at their facilities
• Day and time,they send email to customers (intuitively right - but very wrong!)
• Impact of 3rd-party tee time companies on their business
• How they would like to pay 3rd-party tee time companies

The Technology Habits of Golf Courses

As background, 60% of golf courses license software, spending a median $8,636 to initially acquire and $3,664 annually to support their golf management software platform from a vendor they have utilized for more than four years.

Surprisingly, the majority of golf courses use a different vendor for their primary management software, the creation of their Web site, and for communicating with customers via email (the average course maintain 3,664 emails in their database). The integration between these primary systems still lags.

Golf course operators also impale themselves in their email marketing practices. Tuesday at 11 a.m. is the most typical time courses communicate with their customers. Based on a detailed analysis of over nine billion emails sent via Mail Chimp, while that might be intuitively the best time, in reality it is the worst. Tuesdays produce the lowest click-through rate and the highest amount of unsubscribes. The best time? Saturday morning at 6:00 a.m. provides the highest open and click-through rates.

Another interesting insight provided by golf courses, despite the railing against third parties by the NGCOA, as most recently reflected in the February, 2011 column by Executive Director Michael Hughes “The Right Combination” , is that while only 32% of golf course use a third party to help sell tee times, 58% feel that these firms either increase revenue or have no revenue impact. Only 42% of golf course operators feel that revenue is decreased. It should be noted that the NGCOA is conducting a survey of its members on similar topics. The results should be available in April 2011 and may vary based on the maniacal and pedantic preaching of some of its vociferous members on Listserv.

Despite this lukewarm endorsement for third parties, 64% would prefer to negotiate an annual fee for such a service rather than trade bartered tee times.Still only 11% of tee times are reserved online, according to the survey. Thisbegs the question, how can third party intermediaries be the primary cause of the industry’s demise?

Finally, golf course operators spend 40% of their day on the computer. That makes us wonder who is serving the customer?

Lessons Learned from the Golfers

While golf courses have clearly responded to social media, surprisingly their adoption has outpaced the use of such technology by golfers. Seventy-four (74%) of golf courses have created Facebook pages but only 57% of golfers have done so. More amusing is the statistic that 35% of golf courses tweet while only 14% of golfers have Twitter accounts. Both of these examples underscore the fact that course operators are investing in social media at a faster pace than their clientele is adopting social media.

In answering the survey, golfers provided other valuable insights from which golf course owners can benefit. Respondents’ use of iPad and Kindle is low, at 24% and 21%, respectively.

Eight-four (84%) percent have made a tee time reservation online, and they spend 24.89% of their day at a computer, primarily a desktop or laptop. Smartphone as their primary communication tool lags at 10%.

A majority of golfers forward emails at least daily to associates and family. The vast majority of golfers read the sender, subject line and at least 50% or more of the message. For the golf course operators who craft a meaningful email, the probability that it will be fully read and forwarded is very high.

Eschewing permanent tee times, golfers first search for specials on the course’s Web site before branching out to distribution avenues, third-party sites, newspapers, etc.

Low Hanging Fruit

In thefast-paced society in which we are immersed, we are prone, to our disadvantage oftentimes, to want to adopt the newest, the fastest, and the best.

Having travelled to 41 countries and visited more than 4,000 golf courses, I can’t help but feel that allowing others to be on the bleeding edge of social media is the optimum strategy, for I have yet to visit a golf course where there isn’t some very low-hanging fruit available that would increase revenue, bolster operational efficiency, or enhance customer service. It is my humble opinion that a focus on the basics would produce far greater returns than chasing the latest craze.

About the Author: As Managing Principal of Golf Convergence, J. J. Keegan has traveled in excess of 2,300,000 miles on United Airlines visiting more than 250 courses annually and meeting with owners and key management personnel at more than 4,000 courses. Having successfully combined his passion for golf with his business acumen, his direct knowledge and interaction with the golfing community makes him uniquely qualified to offer expert opinions on trends and issues facing golf courses today. In July 2010, Keegan published the ING award-winning book, The Business of Golf—What Are You Thinking? How to Increase the Investment Return of a Golf Course, which has been purchased by astute golf course managers in eight countries to date.

This entry was posted on Tuesday, March 22nd, 2011 at 1:33 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.