Course operators fight for market share
It’s now been more than a week since the election, yet the postmortems continue. While the previous two federal election cycles in 2008 and 2010 were “wave” elections – new, energized voters emerged and rocked the electoral math – 2012 was a “turnout” election. President Obama’s formula this time around was to get every possible supporter to the polls while simultaneously driving down Gov. Romney’s turnout.
There’s a similar parallel to be drawn with golf. Right now the golf industry is putting a lot of resources behind a wave strategy, with programs designed to recruit people who have never played the game. I would suggest that the industry would be far better off pursuing a turnout strategy, in which most of its time and money is spent getting existing players to play more often.
I’m not alone in this thinking. In his “Outside the Ropes” newsletter earlier this month, Jim Koppenhaver of Pellucid Corp. wrote: “I would maintain that, in the short-term, we don’t critically need more golfers; let’s focus our shortest-term efforts on a ‘get-out-the-play’ effort to incite more engagement among those (myself included) who are already in the game but only marginally so.”
Koppenhaver said he used to play more than 20 rounds per year; now he plays fewer than five rounds annually. “I still enjoy it, I have the equipment, I’m not intimidated by it and I’ve learned to accept my mediocre play as the price for not practicing,” he wrote. But like many other golfers, he just doesn’t play as much as he used to. That’s a missed opportunity for golf courses near his Chicago-area home.
During the 16 years that I’ve covered the golf industry, I’ve seen the introduction of various participation programs designed to attract non-golfers to the game. Yet annual rounds played nationally fell 10.6 percent – from 518 million to 463 million – from 2000 to 2011. Any incremental gains from the industry’s participation initiatives undoubtedly have been inefficient; they might have lured in a few recruits, but not enough to justify the cost.
In retrospect, these declines probably were predictable. Stuart Lindsay, Koppenhaver’s frequent sidekick and head of Edgehill Consulting Group, points to the demise of caddie programs over the past quarter century. He cites a staggering statistic: There are 4.5 million fewer golfers in the 25-44 age group than there were 20 years ago.
“We lost a whole generation of kids who weren’t exposed to golf,” Lindsay said.
(He suggests a possible related problem: The slow-play epidemic might be tied to the declining number of golfers who have caddie experience and know how to keep play moving at a good clip.)
The bright side, Lindsay said, is that baby boomers are doing their part; he noted that roughly half of all rounds are played by people 55 and over. But even that has a downside. Those seniors get discounted rates, so they’re less profitable customers.
This year there has been a fair amount of excitement because rounds played through September are up 7.4 percent nationally over 2011. At that pace, rounds played will finish the year at slightly less than 500 million – not far off the peak year of 2000. So are the industry’s participation initiatives finally paying dividends? Well, not necessarily. This year’s rounds increase appears to be driven largely, if not entirely, by favorable weather conditions. As Koppenhaver noted, on a weather-adjusted basis, the course-utilization rate actually is on pace to decline in 2012. Rounds played this year would have had to have risen 9-10 percent to keep pace with the favorable weather conditions.
Which brings me back to the turnout premise. On the whole, golf course operators have never been particularly good at nuts-and-bolts loyalty marketing: capturing their customers’ contact information, tracking their purchasing habits, and extending timely, targeted offers to bring those players back to the golf course on a regular basis. None of that is nearly as sexy as, say, taping celebrities saying, “Play golf, America!” It involves far more mundane stuff: a good point-of-sale system and a well-trained, diligent staff. But golf courses, just like any other retail operation, need to get this stuff right.
The industry isn’t growing, so course operators are left to fight for market share. The operators who master the basics of consumer loyalty marketing will be fine. The rest will continue to experience a slow, steady decline.