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February 2021

Breaking Up is Hard To Do

Breaking-up.jpg

By Harvey Silverman

They say that breaking up is hard to do. Now I know, I know that it’s true-Neil Sedaka.

Winter typically brings lots of joy with holidays and the dawn of a New Year, along with the closing of many golf course businesses, enabling operators to catch their collective breath. Boy, what a roller coaster this year has been. 2021 just has to be better, right?

Winter is also the proverbial start of the technology selling season when course operators evaluate their technology needs and start shopping for solutions. Many hone in on the PGA Merchandise Show, setting aside ample time for on-site demos of new systems or getting updated on already-installed tech. It will be much different this year, with system demonstrations relegated to online webinars. Good luck to all.

I’ve been on both sides of the computer screen, and like J.C. Simmons in the Farmers Insurance ads, I’ve learned a thing or two. One is that if there are 15,000 golf facilities in the country, they’re run 15,000 different ways. Thus, no one system can satisfy the needs of every course operator.

Second, it’s a huge mistake for someone to sit down for a demo and say, “Show me what you’ve got.” I advise clients to walk into a system demo with a list of the top-10 things they absolutely have to have for their facility. Take control of the demo and ask to see those first. If you’re not satisfied with any one of these, pick up and move on. It’s harsh, but all too often, the demonstrator wants to show all the bells and whistles of our “new, updated system.” Much of it can be fluff, and by the end of the day enduring several demonstrations, you’ll be at the Hyatt drinking a beer and wondering, “What did I see today?” It all becomes a blur.

That brings us to the breaking up part. The IGDB (Internet Golf Database) reports that GolfNow is losing market share with its various PoS systems (G1, EZlinks, and IBS in particular). Others gain share as a result, including (but not inclusive of) Club Prophet Systems, ForeUP, Lightspeed, and Jonas/Club Caddie. IGDB’s is not a full accounting of system placements – it based the market share data on 18-hole or more regulation facilities by examining course website tee time booking engines. It’s the best available, but boy, wouldn’t it be great to know the golf system market shares’ full extent?

“Beware of Barter,” published a year ago, had the desired effect of eliciting comments from golf course operators, many accompanied by a horror story about their current point-of-sale system provider. I tracked and interviewed four who share a common nightmare, the GolfNow purchase of EZLinks.

Kenny Fill is the Director of Golf at Shula’s Golf Club in Florida. Before he became an NGCOA member, Kenny wrote a scathing note to CEO Jay Karen detailing his EZLinks/GolfNow nightmare, inspired by attending one of Karen’s Golf Inc. presentations about the dangers of barter.

Fill wrote, “In 2010, our club had agreed to terms with GolfNow using the barter method. Over time, we saw these rounds selling for as low as $10 per round. We had no control over these prices and were unable to establish a floor with GolfNow. I decided it was time to increase our online presence and take control of our online business. Through various marketing efforts, our club had built up a database of over 25,000 golfers. We continued to track our online reservations on our site and compare them to that of GolfNow. We spent years identifying the GolfNow users and informing them that they could book direct with us and pay $0 in reservation fees. Over time, we watched our online reservations grow and outperform that of GolfNow. However, we could not offer a low price guarantee on our site due to the barter times we were giving GolfNow. We were stuck in a bad relationship. Then COVID-19 came along.

“Our club was able to re-open after being closed for six weeks. We noticed a surge in demand for golf. We also saw a rise in online and pre-paid reservations. We had zero bookings from the GolfNow platform for seven weeks from April to June. Our tee sheet was anywhere from 75% to 100% full. Golfers had found a way to book with us directly instead of with GolfNow.

“We thought it good fortune but later learned it was an interface error between GolfNow and EZlinks, our PoS system. Why that took so long for discovery, I don’t know. But the seven weeks told me that we could survive and thrive without the need for GolfNow. I now had the ammunition I needed to re-negotiate new terms with GolfNow. I offered to go to a commission-based model similar to what we were doing with TeeOff.com. GolfNow refused and said that the barter method was their bread and butter.

“I ultimately told GolfNow that we would discontinue their service if they were going to continue with barter. They offered commission – 25% to 30%. Our rack rates run $85-$100, and paying exorbitant commission to GolfNow would wipe out profits from every round they sent us. We finally left GolfNow in July - one of the best decisions we have ever made. Our online traffic is at an all-time high, and we continue to capture new customers through our site. It took time and a global pandemic to do it, but we did it.

“Now, our EZLinks contract expires in a few months. GolfNow tells us that EZLinks won’t be around within a couple of years and wants us to convert to G1 – on a barter payment model. Fool me once, shame on me. Fool me twice, ain’t gonna happen.”

Bill Place of Ace Golf operates four courses in the Tampa, Florida, area. He wrote, “We have IBS at two courses and EZTee at the other two.EZLinks/GolfNow had pushed us to EZTee back in November 2019 when we did not want to pay the high fees of EZTee Pro. We asked to have all courses on IBS (EZSuite), but GolfNow said that it would soon be discontinued. Our conversion to EZTee (their EZTee Pro “Lite” system) from EZTee Pro in March was a nightmare .I calculate the failed implementation cost me at least $5,000 in lost business (no online tee times) and asked GolfNow for a credit. Sure, they said, as long as I signed a two-year commitment to the GolfNow Marketplace.
 
“They are now offering to let us put those two courses onto EZSuite (which makes no sense if it’s being discontinued) but are pressuring for a two-year agreement at all four courses with a GolfNow Marketplace tie-in. We had considered moving all clubs to EZSuite, but we won’t if pressured to also buy GolfNow Marketplace and extended agreements. I told them that would cause me to eliminate EZLinks as a system choice, and they simply don’t care. It’s their way or the highway.

“It’s not unlike how GolfNow has treated us in the past, but we never expected our systems supplier to act like this. As I look at other systems, I find many competitors to GolfNow/EZLinks who have no contractual term requirement.”

At publication, Place has moved three courses to ForeUP and exited the GolfNow Marketplace at one course.

A facility in New Jersey prefers to remain anonymous, fearing retaliation. That’s a story in and of itself – fearing your technology provider. This course tried bartering tee times with GolfNow a few years ago on a two-month trial. The results? Over 600 barter rounds sold, and not even a 10% return on rounds driven by GolfNow. That was the end of the barter experiment.
EZLinks is the facility’s technology provider, and all was well until it sold to GolfNow. With the EZ360 cloud system installed for $550/month, the course owner was shocked when COVID hit – the system lacked the functionality for pre-paid greens fees. Then, GolfNow informed ownership that EZ360 support would soon end and suggested a change to its G1 system.
A monthly fee of $550 fits nicely into the annual budget. GolfNow offered it, sort of, in one of three payment options: Two tee times a day, or 20% commission on rounds driven from the GolfNow marketplace (the weekend rate with cart is $75), or $550/month PLUS a $1500 install fee PLUS one tee time a day. Take it or leave it.

Too much, the owner replied. Bartering tee times is a non-starter, and a 20% commission on a $75 greens fee could add up quickly to far more than $550 a month. And so, with an expiring contract, this facility will add to GolfNow’s market share loss and add onto someone else’s by spring. 

Last, we find Todd Miller, PGA General Manager at Santee Cooper Resort in South Carolina. Miller kicked off the Accelerate string with this: “Our courses have been long-time partners with EZLinks. We stayed with them a year ago when they upgraded us to their EZ720 cloud system. We liked the tee sheet, and they signed us for cash, no barter, which we liked. After the “merger,” we are feeling squeezed into going with the more traditional GolfNow barter payments if we want improved service. Have any other properties had similar experiences?”

Miller agreed to expand in a phone interview. “Converting to EZ720 from EZSuite was horrible, but we’ve grown used to the cloud system now. It took months to get it right, during which time we did not pay for it. We then learned that GolfNow would soon no longer support EZ720, that we were one of just a few to change to EZ720. GolfNow offered to take us back to EZSuite (not cloud) or convert to G1. Our contract expires in 15-16 months, and we’ll be looking for something new. We’re on GolfNow.com by default because GolfNow took barter times to repay our debt, one time per day through the end of our contract. The arrangement works because of COVID cash flow considerations (we’re a resort with no villa occupancy – ouch!). Local play keeps us in business, but we see no more than about one tee time reservation a month coming through GolfNow. If we were simply giving them one tee time to be listed, we’d see no return on that investment.”

Changing point-of-sale systems is an arduous task. You shouldn’t have to endure bully tactics to stay with what you have. I’ve held the hands of managers and staff while consummating a conversion, including a midnight one at a 12-month course that had no appetite for shutting down for a day. Research, demonstration, selection, negotiation, implementation and training define a PoS system change elements. This is the system that runs your business! If you’re lucky and choose wisely, you might only have to do this once and not suffer buyer’s remorse.

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