The question was simple: Would knowing how many golfers hit practice balls at the range before their round boost course profits?
Tom Smith, general manager of TPC Harding Park, a municipal course in San Francisco, California, admits he didn’t know that number. But when he learned it was about 50%, he and his staff tweaked their marketing for the driving range. Today that number is 55%.
“Yes, 5% may not seem like a lot, but being that we host about 95,000 rounds annually, we’ll sell 4,750 more buckets on our range and that translates to approximately $45,000 additional revenues,” Smith says.
It’s just one example that has caused Smith to ensure he always has plenty of research and data in his toolbox.
“We seek out data to help guide our decision-making [because] we believe making data-driven decisions produces favorable results and limits risk,” Smith says. “No business wants to learn it made a bad decision. The golf industry is competitive and it’s exceptionally challenging to have a sustainable operation. As an operator, if you’re not constantly evaluating the data then your competition will have the upper hand.”
The fact that Smith and TPC Harding Park have embraced data and research doesn’t surprise Peter Smith, no relation to Tom and senior vice president at Players 1st, an Arizona-based company that helps golf course operators recruit and retain players. Peter, too, is a huge fan of information and says it can deliver “deep insights” into the strengths and weaknesses of course operations and offer “a rich source” of ideas to improve operations. And he adds that course operators who ignore data may likely do so at their peril.
“While COVID-19 has fueled a boom in golf rounds and course profitability for many operators, if rounds return to their historical levels, many courses will again face more competition and they’ll need new sources of growth and aggressive cost containment to keep healthy profit margins,” Peter Smith says.
He refers to a report by Forbes that says “focusing on customer experience management may be the single most important investment a brand can make in today's competitive business climate."
Course owners and operators, Peter Smith says, would be wise to take a page from Apple and Amazon’s playbook. “They’re laser-focused on continually innovating around the brand experience to retain their existing customers and leverage word-of-mouth recommendations to gain new customers.”
Peter Smith says a common refrain he hears from many course operators is this: ‘We already know our golfers.’ “Often these perceptions come from interactions with the vocal minority who tend to dominate the conversation and can drown out the feedback of other members and guests. Establishing a systematic and robust customer feedback process can ensure that you’re getting a balanced response from the entire customer base.”
Peter Smith adds that key performance indicators (KPIs) such as customer satisfaction ratings, operational costs, tee sheet utilization and revenue per available round can give a more complete view of a course’s performance and, at the same time, put customer feedback at the center of its decision-making process.
“Data can also identify specific service areas that have a high impact on customer satisfaction,” he says. Of course, another trend driving data is technology. “Today, technology like social media, online reviews and pricing transparency have driven courses to rely on research and data to execute efficiently as they prepare for the future,” Peter Smith says. “Technology has transformed consumer purchasing behavior, eliminated traditional sources of business advantage and created a hyper-competitive landscape where only the most efficient operations will prosper.”
He says two problems can arise when course operators implement a data-driven process:
1) Not considering how KPIs will be added to operating processes. “Incorporating KPIs into individual management performance assessments can help ensure that the organization remains focused on the data and achieves targeted improvements,” he says.
2) Trying to measure too many things. “Measuring too much can lead to a lack of clarity and focus and potentially data paralysis,” he says.
He also adds that transitioning to a data-driven business is a marathon, not a sprint. “Phased implementations will ensure a smoother transition. But ultimately it’s a journey that course operators will need to take if they want to remain profitable in a post-COVID future.”