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October 2013

Forward-Looking

By Trent Bouts & Steve Eubanks

Savvy operators are using technology to propel their businesses into the future

Forward LookingFor millennia, knowledge and expertise flowed downhill as reliably as water. From shaping flint axes to building spacecraft, the experience of one generation always informed the next. But the advent of the Internet flipped that tradition on its head. Electronic innovation exploded like the Big Bang birthing a new, virtual universe where sons and daughters—often prone to thinking they’re smarter than their parents—actually were.

Many adults, whose formal education wrapped up long before anyone flipped open the first laptop or slipped a phone into their pocket, found themselves illiterate, at least in terms of technology. In golf, that described a significant percentage of independent course operators. For some, it was a close call which was more daunting—the onslaught of the technology itself or the terminology that came with it. Without the resources to fund the kind of IT help that big business enjoyed in-house, they began to lag. Their heads may not have been in the sand, but their feet were.

Some industry observers say those stragglers include more than just mom-and-pop owners. “Golf has, historically, been three to five years behind general business in terms of adopting and keeping pace with technology,” says Ed Mullen, a senior account executive with Active Network, a software seller. “There have always been those who want the latest and greatest. But there are also those who grew up without it. They may just have a cash register and say they can keep doing it that way.”

Mullen and others say that window on the old way is closing, and fast. While airlines and hotels routinely sell more than 70 percent of inventory online, Mullen says golf barely topped 10 percent last year. “But that number will at least triple in the next two years,” he says, as older consumers accustomed to phoning for a tee time give way to younger golfers who prefer the flexibility and autonomy offered via the Internet. Mullen says more and more operators are acting on that trend. “We’re seeing people who were never interested in technology before starting to dip their toes in the water,” he says.

Business today requires an integrated online presence and a technology-based marketing strategy that not only identifies your core customers, but invites them back on a regular basis. Take, for instance, Hilton Hotels, which regularly notifies its gold and platinum members with email specials. Or National Car Rental, which pushes discount offers to its Emerald Club list on a weekly basis. ESPN will send text alerts on a person’s favorite team, and Great Clips will deliver messages to its customers’ phones when it’s time to come in for a trim.

Runners, triathletes or parents of kids in organized baseball or soccer are equally accustomed to getting notices about upcoming events, schedule changes or looming deadlines. So why haven’t golf course operators followed suit? At least one has.

“I’m a runner, so I was very familiar with the Active [software] network from the running scene,” says Mike Attara, director of operations at Eagle Ridge Country Club in Lakewood, New Jersey. “When I saw that Active was getting into golf, I saw a great opportunity for us.”

Attara partnered with Active Golf to develop his learning academies. Now, all of Eagle Ridge’s junior golf camps, clinics, group lessons and Get Golf Ready programs are booked through the nation’s largest online sports reservations service.

“We’ve had some great success with that tool, not just for reservations but to get the word out about our programming,” Attara says. “With the tool, we can collect a lot of data from customers—what they like, where they live, how often they play, how often they want to play, how much they spend. It also allows us to communicate with the students quickly to keep them updated about weather or time changes or anything that might come up.”

Attara isn’t the only operator identifying customer expectations outside of golf and applying them to the game. Many golfers travel, either for work or pleasure, so most understand that hotels, airlines and car rental companies offer the best deals to those who book early. Golf has historically done the opposite. The closer a tee time gets, the more likely it is to be discounted.

“That’s backwards thinking,” says Jeff Raymond, director of golf at Pointe Hilton Tapatio Cliffs Resort in Phoenix, Arizona. “You have to have dynamic pricing based on day of the week and time of day. Technological tools are available for you to do that. But you also have to build your models based on what a [tee] time is worth when that customer books it.” (For more information on dynamic pricing, visit the Golf Business archives at www.golfbusiness.com.)

At Tapatio Cliffs, Raymond and his staff use technology that allows customers to book tee times via the facility’s website or through a mobile app. Rates escalate as the tee time approaches. From 60 to 30 days out, customers receive a 14 percent discount; from 30 to 14 days out, the discount is 7 percent. Last-minute times are rack rate.

Looking to the future, Raymond can envision a time when a last-minute booking will receive an up-charge, especially if there’s another entertainment option taking place in the area, like a sporting event or a concert.

“I could certainly see us charging a premium for times that guarantee the player will be off the course in time to make it to a game or special event,” Raymond notes. “We aren’t there yet, but with supply-and-demand pricing, I can see it happening sooner rather than later.”

Despite the available technology, many operators are not reacting to the laws of supply and demand quickly enough. It’s not that they don’t want to; rather, many don’t understand how to use the tools at their disposal.

“A lot of the yield management and marketing software that’s out there isn’t about making life easier for the guy behind the counter; it’s about making the golf course more money,” says Tom Robshaw, president of Club Prophet Systems. “If you’ll do the job on the front end—gather the golfer’s information, get his [or her] history and email address, and update his profile when he plays—then you can make your system work for you.”

Unfortunately, some course operators aren’t willing to take the extra step or invest the time to learn how to do it. As such, many turn to third parties, which do the work for them but sell their times at a discount rate. “When you do that,” Robshaw notes, “you’re digging your own grave.”

There is, of course, a cost-benefit analysis associated with every investment—including technology. Palmetto Dunes is one of the largest resort properties on Hilton Head Island, and it generates millions in golf revenue across its three courses from scores of sources, including hotels, timeshare properties, homeowners, condo rentals and drive-in guests. Not surprisingly, Palmetto Dunes also has a state-of-the-art operating system that catalogues yields from each tee time on every course in the resort and chronicles the restrictions that go with each category of guest.

“We look hour by hour so that we can put our golfers in various buckets and determine where our highest demand is,” says Brad Marra, assistant vice president at Palmetto Dunes. “It can become overwhelming. We have to determine where our weak times are and focus on how to get the highest yield we can out of those times.”

But Marra is quick to point out that not every operation would benefit from the sort of complex hardware and software systems that he and “larger” operators use.

“If you’re a single golf course doing 40,000 rounds at a reasonable price, having a yield management system to maximize the dollars you’re getting for each time is probably worth the cost,” Marra says. “But if you’re doing 20,000 rounds at $30, software isn’t going to turn you into a course that does 30,000 rounds at $90.”
 
Robshaw agrees with that assessment and admits that price is the biggest barrier to entry. “Resort properties, multi-course owners and management companies can afford the upfront costs of fully-integrated systems along with the training needed to get everybody using it properly,” he notes. “But for a family-owned golf course, as much as they might need the top-end tools, it’s probably not going to happen, at least not in the short term.”

Affordable tools are available, though, and both Robshaw and Marra believe that every club should incorporate some form of yield management and online marketing software into their operation. “There’s something in the market for everyone,” Robshaw says. “The trick is finding what’s right for your operation.”

Jeff Hoag is certainly finding what’s right at Scott Lake Country Club in Comstock Park, Michigan, by stepping up his club’s online presence and capacity. Scott Lake’s website is on its third iteration and a fourth is in the works, partly to keep pace with technological advances but largely to provide what Hoag’s golfers say they want.

“We listen to the feedback we get,” he says. “We do have a Facebook page and we’re dabbling with Twitter, but I think the next big thing for us will be Instagram. The ability to take a picture and instantly post it with a caption lends itself to fun and telling a really positive story.”

In the end, listening to the customer and being able to tell a compelling story—in whatever form or fashion it presents itself—are keys to success in any business. And if that involves incorporating technological innovations, golf course operators of every ilk would be wise to adapt or risk being left behind, figuratively and literally.

Trent Bouts is a South Carolina-based freelance writer and editor of Palmetto Golfer. Steve Eubanks is an Atlanta-based freelance writer and former golf course owner.

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