Trick or Treat: David or Goliath

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Three things are not going away anytime soon: Expedia, Travelocity, and GolfNow.

While these sites are fabulous for the consumer providing them multiple options often at substantial discounts, I ponder are they good for the purveyors whose products they are selling?

During October, we listened to a comprehensive presentation by GolfNow extolling the benefits of their services to the golf industry. It was impressive.

Goliath

Golf Channel, GolfNow, Golf Advisor and Revolution Golf form a cohesive unit that informs, orchestrates and motivates the golfer to play, perhaps more frequently at a greater diversity of locations.

Believing that the growth of the golf industry does not rest with the disjointed efforts of the NGCOA, NGF, PGA, or USGA, senior management officials of GolfNow in the past have stated they are the only hope for the long-term success of the business.

Some of the services they offer, as seen during their speech, are highlighted below:

 

Note: The slides presented to the audience did not contain a copyright or restriction on the republication of such.

 

While listening to the articulate presentation with a well-choreographed accompanying 33 slides, the following facts about GolfNow were stated:

  • 3.5 million unique golfers in their database
  • 9,000 golf courses as clients
  • 15 million rounds booked annually
  • 260 million page views
  • 180 on staff booking agents
  • 10,000 commercial spots on Golf Channel
  • 1,000+ Affiliate Sites
  • 55% booking on mobile
  • 26% to 31% open rate on emails to golfers

The Golf Advisors numbers are just as remarkable:

  • 30 writers on staff
  • 319,000 reviews by golfers on 13,700 golf courses around the world
  • 320,000 golfers participate in sweepstakes promotions on which 3,000 commercial spots are run
  • Golf Channel does 17 million banner impressions

But are the numbers accurate? Some in the golf industry believe these to be inflated reflecting GolfNow’s marketing prowess and perceived skill at embellishment. It is my personal opinion that GolfNow’s lack of transparency creates a negative brand image across a broad swath of the golf industry. We have yet to hear from a golf course owner or manager who broadly endorses the firm without reservation or qualification.

One thing those number above illustrates incredibly well, however, is their ability to position their services in an incredibly good light without even addressing any of the negative perspectives of the golf industry. And to be fair, the average golf operation has little chance to produce such a great marketing piece, much less deliver on many of the services described.

This does answer a question a lot of people ask – “Why would someone sign up for GolfNow?” I speculate that this is a question a lot of NGCOA members, particularly from single course owner/operators that have been running their courses for over a decade, have answered for them when listening to a GolfNow presentation. GolfNow offers the path of least resistance to the lazy and to those with little talent.

David

The ORCA Report, power in numbers, is a software firm headquartered in Scottsdale, AZ who over the past 18 months has amassed an impressive client base of 250 golf course. ORCA is an acronym for:

  • Occupancy
  • Revenue per Available Round
  • Channel Mix
  • Average Revenue per Round.

These are Key Performance Indicators (KPIs) that are useful to golf operators in this competitive age. They help explain performance to managers, company executives, and owners with data from a trusted, independent source.

ORCA’s #1 mission is to help golf course owners make more money through understanding the performance data of their golf courses, that of their competitors and the market. Party of it is barter, part of it is the mix of their business, part of it is a better pricing strategy through market understanding.

Their website tells their compelling story:

  • We know the tee time marketing technology space better than anyone. We have been digging into electronic tee sheets, the point of sale systems and the operations that surround tee time marketing for over 30 years. We’re always learning more and eager to help the golf course owner and operator make better, data-driven decisions based on the business intelligence platform that ORCA has created.
  • We created the business model, the technology platform and the sales and marketing strategies that became GolfNow.com. We want to help golf course owners and operators by bringing clarity to barter relationship. We can give you the tools to calculate the return on investment. We can show where the rounds and revenue impact your tee sheet helping you create an equitable relationship. Did you know that over half of the rounds of golf booked by 3rd Parties are on Friday, Saturday, and Sunday? (emphasis added).
  • We believe that golf courses have not received the full story related to rounds, revenue and performance of 3rd Parties for quite some time. Through The ORCA Report, we aim to change that by bringing clarity to the numbers related to your customers, competitors, and barter.

The ORCA Report, just like the STAR report for the hospitality industry, is the “truth serum” that provides an astute manager the key insights necessary to measure if they are effectively managing the effective yield of a golf course and whether barter is being properly monitored and controlled.

As a result, ORCA attracts the high-end, sophisticated, early adopters who have more resources available to better manage the facility.

The ORCA Report:

  • Takes The Guesswork Out of Tee Time Pricing
  • Arms a Golf Course with Validated Competitive Data
  • Manages the 3rd Party Relationship with Clarity

They key to the ORCA Report is that they sign a confidentiality agreement with each participating golf course taking every precaution necessary to protect a golf course’s information. They only report on aggregate golf course data and deploy strict standards so that every golf courses data is handled responsibly.

They have created “Pods” of multiple courses reporting throughout California, Coachella Valley (Palm Springs), Las Vegas, Phoenix, and Tucson. More importantly, they are in “conversation” with the leading management companies to import their reservation data so that they more effectively manage and boost the profits on their client’s facilities. The NGCOA also recently signed an agreement creating a “partner relationship” with the ORCA Report.

To learn more about “ORCA Getting Started” click here or download the file: Download

My Beef: A Testimonial

We utilized the ORCA services on a client course that had also deployed Fore Reservations provided by GolfNow in exchange for two tee times a day. The course played just over 50,000 rounds in which 2,635 rounds were sold by barter an estimated cost of $111,123 with the course generating total revenues slightly over $1.1 million. Before ownership of Fore Reservations by GolfNow, the client paid $4,000 annually for the software license. There were 1.5 rounds sold on the client website for every one barter time liquidated – mostly on weekends when the golf course would have sold the rounds themselves.

Hence, my objection to GolfNow. It is not the services they provide, though their POS software is rudimentary in comparison to the reporting capability of Club Prophet or the superior Teesnap, but rather the price charged in relation to the value received by a golf course I think is unconscionable.

Recently, we understand, a golf course was negotiating with GolfNow to transition from barter to a commission model. GolfNow was accepting of the alternative payment plan providing that a minimum of $75,000 in commission income was guaranteed. Golf software should cost no more than $20,000 per year or 1% of gross revenue, whichever is greater.

If there hope? We believe that GolfNow’s market penetration has reached an apex with third-party bookings down 16% and barter contracting by 14% during the past year as reflected in selected markets.

Is what we have heard reported to me accurate? We attempted to confirm these statistics with a GolfNow representative and was merely told, “I see the numbers and what you are telling me is not accurate.” No supporting data as to actual numbers was volunteered. Perhaps we only hear from the nattering nabobs and critics, but I doubt it.

Hence, what I believe is “smoke and mirrors.” Until GolfNow has an independent accounting firm audit or a qualified consulting firm like Global Golf Advisor led by the effort of the eminently qualified Henry Delozier, confirm the cost of bartered tee times per course and the impact on a facility’s REVPAR, we believe that GolfNow will continue to be viewed with great suspicion necessitating the unnecessary continuance of the NGCOA’s Tee Time Coalition initiative.

Here is what we don’t understand.  If GolfNow is good for the golf industry in attracting new golfers and increasing rounds at golf courses, why have rounds fallen for the past decade?  If GolfNow didn’t exist, would rounds have fallen even more?  Don’t think so but we can’t figure it out.

Who Will Win the Battle?

In all likelihood, both GolfNow and the ORCA REPORT will prosper. While one might hope that informed with information about the cost of barter, a golf course manager would abandon the third-party agreement; the harsh reality is that the typical golf course manager doesn’t have the resources or intellectual capital to properly manage their inventory.

Unfortunately, the typical golf course owner isn’t smart enough to know that the software they have licensed from GolfNow isn’t very good nor are they smart enough to be able to utilize the fabulous insights and perspectives of ORCA to control barter and effectively manage their effective yield.

Thus, the more sophisticated management companies will be able to negotiate and mitigate the cost of barter with GolfNow based on the number of courses they serve versus the single golf course owner who will remain the chum in the seas.

But isn’t that what capitalism is about, “the strong devour the weak.”

That is what I think. What is your opinion? Comment below:

Join the Conversation

10 comments

  1.    Reply

    Impressive roster of comments on your article. Not exactly sure of the message other than Golf Now bad, ORCA good. To me, and our operations, Teesnap is the best software available. The issue is, as golf operators, we can not react fast enough because we are usually tied to a contract with companies like Golf Now, EZ LINks or Golf Prophet, etc., It is not an issue of being smart enough, but what choices do I have given the current makeup of my operation. One approach does not fit all and when we can get to the point where there is a formula for POS software, marketing, social media, etc. we will all be more efficient and profitable.

    By the way, those pop-ups are annoying.

  2.    Reply

    JJ,

    Golf Now flourishes because of the drop in golf players in the face of thousands of more golf courses. If you go back to 1990, the US population was 300-million and there were approximately 30-million golfers. By 2012 the US was up to 330-million but golf players declined to 24-million. To make matters worse, the USA had approximately 12,500 golf course in 1990. Now we have approximately 15,500. Even if I flunked grade 5, I think I might have counted my change based on those numbers.

    Here’s a Q: Do ticket scalpers make money on empty seats? Nope! Strange. We had sold out tee sheets in Florida in the mid-1990s. $75.00 recreational golf course daily fees were common. Today the same (surviving) golf course can’t get $40.00. Golf Now is a negative scalper. Strange, huh?

    If my approach, which is falling on deaf ears, Golf Now would be out of business in about three years. They’ll disappear because a seller’s market doesn’t need carpetbaggers. Golf Now thrives on the numbers illustrated above. My suggestion begins with a serious meeting with the PGA professional staff at every golf course in the USA. Subject: ORDER them to introduce golf to a minimum of 100 ordinary people in the next year, AND DON’T START LESSON NUMBER ONE WITH THE GRIP!

    I’ll say it again, “10-million Americans are waiting for an invitation to take up golf!” All the arrows point to golf. It really is a beneficial sport, pastime, healthy activity, mental break, and a great source of vitamin D. Golf should be flourishing today. It’s a real puzzle (but I know the answer).

    Please circulate my article: http://golfenomics.bizland.com/1000-more-golf-courses.htm.

    I’m starting to feel like the guy alone on Mars. There’s nobody around to hear me.

    Mike Kahn, Golfmak, Inc. [email protected]

  3.    Reply

    Don’t always agree with you but this time is mostly spot on!

  4.    Reply

    Well done!
    Unfortunately, a majority of the public golf courses operated today are not being operated by the “owner” but someone else that is normally not vested in the success of the operation or profitability of the golf course. This is where the disconnect is and why the 3rd party resellers have such a high success rate. Until we can attract more capable people to the business, this situation will not change.

  5.    Reply

    You nailed the proverbial nail on the head. Only through efforts such as this article will the harsh light be shone on the deceptive and exploitative practices of Golf Now.

  6.    Reply

    My favorite stat is 15 million rounds booked. How many of those are barter rounds – half?

  7.    Reply

    “To learn, you must love discipline: it is stupid to hate correction.”
    That is why I find it so hard to understand why people in the golf industry who have heard these words above over and over, and who have seen these types of reports are continued to be led astray by the “promises” of GolfNow. Let’s face it. We all need sage advise from time to time in managing our operations. We must be disciplined enough to seek it out and make sound business decisions to maximize profits for our operations. Clearly on this day of Halloween, more people are starting to realize that GolfNow is a Wolf dressed up in a Sheep’s Costume, looking to feast off of your Tee Sheet inventory, and use smoke and mirrors to entice you to believe that they are actually helping you. Invest in companies like Club Prophet, and ORCA! They will tell you the truth and help you become more successful, and the Truth will set you free from the lies and promises of GolfNow!

  8.    Reply

    Good article Jim. Insightful, and provocative. Always enjoy reading.

  9.    Reply

    Good Article Jim. Club Prophet users should know we do fully integrate with ORCA.

    Tom Robshaw
    President
    Club Prophet Systems
    800-793-1872 x 7002

    1.    Reply

      Yes, Tom Robshaw, you’ve been a supporter of ORCA since day one. Thank you. The data coming from your system is simple to receive and easy to reconcile. I know our mutual clients appreciate your good service to this effort.