Seven Steps To Avoid the Dark Side of the Force in the Golf Industry

My sole focus and passion are to mentor golf course owners to achieve the financial potential of their facility.  We bring an independent perspective based on detailed research and extensive field studies.

I sincerely believe that I have seen more golf courses than anyone.  Perhaps over 4,000 in 46 countries.   Based on this experience, we have created a golf management system that streamlines the operation of a golf course.   Authenticated rules of thumb guide management and staff to create value for golfers on a foundation that fosters loyalty.

Part of our role, via our blog, monthly newsletter, and biennial book, is as a writer publishing insights and perspectives to educate golf course owners.

The Role of Institutions

Winter’s dark light gives one time to reflect.  It is also a time to catch up on movies:  Spotlight, The Big Short, and Concussion were among the favorites.

In leaving each, I left disheartened regarding large institutions.  I also was chagrined to realize that outsiders tend to be the first to recognize the inadequacies of institutions, but precisely because they are outsiders are usually in an inferior position to fix them.

Whether it be a religious institution, Wall Street, or the largest professional sports organization in the world, the lack of transparency was a dominant theme throughout the movies.

Glad-handing, lip service, and cover-ups are the fundamental roots of many organizations.  Their principal focus is their welfare, not necessarily those they were meant to serve.  And, it is the naiveté of the humbled masses that believe these organizations have their best interests at heart serve as the cog that allows these practices to perpetuate.

Such is the case with me as an outsider within the golf industry.

I was told by the head of a National Association’s educational department that “I represented a mosquito on the ass of an elephant, and all he wanted to do was kill me.” Another time, I had a confirmed appointment at ten a.m. with the head of another national association and wasn’t greeted by him until two p.m. though he was in the office.  The head of a third national golf course association stated to me, “That the only individual qualified to teach managers and professionals within the golf industry were PhDs from Division One universities.  And, wanting to ensure that I represented another Association properly in my book, “The Business of Golf – What Are You Thinking” an advanced copy of a manuscript was provided for their review.  Their response, as the draft lay on a conference table between us was, “You really don’t think our members will read a book on how to manage a course better, do you?”

Recently, Andrew Wood, Impresario of Legendary Marketing, and I were contacted by another association which was seeking to expand the educational opportunities of their members.  We provided two executives of the Association complimentary access to our vast online resources.   I also offered to provide each registrant at their annual conference complimentary copies of the book “The Business of Golf – Why? How? What?” – A donation at retail that was worth $60,000.   Their response?  Neither senior officer ever logged on to view the resources at Legendary Marketing or JJ Keegan+.  Further, they wanted me to pay the $500 in shipping costs.  Go figure as they hailed the quality of the book stating that they were “… impressed with its thoroughness and supporting analytics and that two of their associates also had nice things to say about it.”

These movies I recently watched motivated me to ponder if there is any correlation of those institutions featured in the movies to the golf industry.

Who are the dark forces in the golf industry that are impeding the success of golf course owners?

Golf is an Awesome Sport

Golf is a great game.   It is a fabulous industry as a spectator can watch in awe the amazingly talented professionals compete or as a golfer, one can appreciate the recreational aspects of the game.  The blend of green grasses with blue water features, white sand bunkers, flowers with their different hues, and trees that change colors throughout the season, create a picture of unparalleled beauty.  A golf course is very much like a walk through a botanical garden.

Golf has a lot going for it.  The January issue of Golf Magazine featured 59 things that are right about the golf business.  With a laser focus on the golfer, a very accurate and bright picture was presented to attract and retain their interest.

If for no other reason than the values golf inculcates in those who play, the presence of golf plays an important role in our society.  To the extent that I can, through my resources, positively impact the quality of this fine sport, I am “all in.”

The Dark Side

I often see a different side.  Clearly the vast majority of golf courses dramatically underperform their potential. Why is that?  There are only four reasons a golf course owner can’t execute:  lack of knowledge, lack of ability, lack of time, lack of money.  While knowledge and ability are forefront – it is the unwillingness to change, and embracing new lessons that serve as perhaps the biggest hurdle.

However, beyond the owner impaling himself, there is an influence that is negatively impacting the ability of a golf course owner to succeed – the invisible hand that guides the business of golf by the leading Associations, i.e., American Society of Golf Course Architects, Club Managers Association of America, Ladies Professional Golf Association, National Golf Course Owners Association, National Golf Foundation, PGA of America, PGA Tour and USGA.  Bit actors, though influential in this play, are the software vendors.

Realizing that that I am often not without controversy and that I am viewed by Associations as an antagonist where I view myself as a protagonist, each of the entities, in my opinion, represents their agenda without regards to the success of golf courses.  It is the pushback that I receive from them that convinces me that they don’t have the best interests of their members at heart.

Below is a basic primer of the strengths and opportunities for those Associations that have the largest influence on daily golf course operations.  There is a seven-step formula at the end of this article that if followed, will provide a clear path to financial success so that you do not succumb to the false perception that Associations are here to help you.

Golf Course Architects

Role:  Golf Course Architects are like artists.  Their canvas is the earth.  Their paint brushes are bulldozers.

Led Astray by:  From its inception, golf was a ground game.  The introduction of the aerial game by Robert Trent Jones, Sr., the devilish British Brutes by Pete Dye which brought forced carries to the fore, and false fronts and small green targets by Nicklaus were the fork in the road that has contributed, along with changes in equipment that were perceived as making historic courses obsolete, to the industry’s decline.   Difficult became celebrated as the slope rating of golf courses increased from the average of 120 before 1980 to 127 after that.  The courses they built were without concern to the cost of maintenance or other operational considerations.  They defend their Machiavellian practices meekly stating they were merely fulfilling the wishes of those who retained them.

Other architects became enamored and built courses on steroids amplifying their egos.  They catered to a small group of elitist and highly skilled golfers.  Or, they used their ability as a basis for their designs continuing to make the game too challenging and not much fun for the masses.

In equity, it should be noted that not all, but many, architects have played a role in making the courses too difficult.

Opportunity:  Kevin Norby, ASGCA, believes that if you are creating a municipal or resort course where the average golfer might shoot 100 -115, you certainly have to design that differently than you would at a private club where the average golfer might shoot 90 or 95, or a championship caliber course played by tour pros.

It is the opinion of Armen Suny, with whom I heartily agree, that architects should study the ability and potential of the 24 million golfers who play the 350 million recreational rounds annually in the United States as guiding principles for their work.

The golf industry often claims that it is the cost and the long hour required to play a round that are the inhibitors to growth.  Top Golf has proven those excuses are fallacies as the average ticket exceeds $100 and the wait to be assigned a bay often averages over 2 hours.

The difficulty of golf courses has led to the decline of participants and rounds.  I have yet to hear a golfer say, “I shot my best round ever, this course was too easy, I am not coming back.   I frequently hear, “This course was insanely hard, and I have no desire to play it again.”

PGA of America

Role: PGA Professionals, as stated on their website, “Have one goal in mind – to make the game of golf more enjoyable for you.” [1]

Lead Astray By:   Patrons, Partners and Licensees are the primary focus of the PGA.  The PGA is almost exclusively interested in signing the back rather than the front of checks.

The tools they provide to their members are not widely adopted.  The effective Get Golf Ready program, after five years, has been adopted by less than 1,750 facilities.  The PGA PerformanceTrak Annual Operating Survey handles less than 1,600 golf courses.  This set of 45 insightful reports has not been updated since 2014. The PGA PerformanceTrak KPI (key performance indicators), though available in over 60 markets, isn’t used by many and has little credibility with leading PGA professionals.  Example reports have not been updated since April 2012.  The department that oversees these member services is a money loser at the PGA.

It is my belief that the Certification Programs for General Management and Golf Operations are weak and don’t focus on key strategic issues required to ensure the financial success of a golf course.

Opportunity:  If the PGA of America, a trade association that was established to enhance the opportunities of its members, truly cared about their employment success, it would equip them with the proper tools to manage their facilities adroitly.  There are two easy things they can do with a relatively small investment.

First, the PGA of America should license the fabulous software of Club Benchmarking and its affiliate Links Insight.

Links Insight is a subscription-based online management tool that provides a 360-degree view of key performance indicators of your business. Links Insight captures critical metrics in your facility to provide you with the ability to analyze your business against your comp set, your geographic market or the industry as a whole.

The tools within Links Insight give context, relevance, and meaning to your data, giving you greater knowledge and control that ultimately allows you to manage your business using fact-based analysis and benchmarking.

Second, the PGA of America should license the ORCA Reports. ORCA report provides real-time data and information that helps golf course owners make decisions about price, availability and the opportunity cost of barter.  While the PGA PerformanceTrak has four reports, ORCA offers 17 different views on the data that is marvelous.

USGA 

Role:  The mission of the USGA as stated on their website is “The USGA promotes and conserves the true spirit of the game of golf as it is embodied in the ancient and honorable traditions.  It acts in the best interest of the game for the continued enjoyment of those who love it and play it.”[2]

Laid Astray By:  The USGA blood bleeds blue as they represent the game of golf and not the business of golf.

In an interview with a USGA staff member, he commented how insulated the organization is from the public golfer.  The Executive Director, who is amongst the best of all time in course set up for championships, and the patriarchal Executive Committee represent the upper crust of America.  I doubt they have played golf in decades at a municipal, military or low-end daily fee course, save for facilities hosting their Championships.

During the past ninety days, the USGA began stepping out of its historical role to address the financial health of the game.

In December 2015, the USGA announced,

“The United States Golf Association and the American Society of Golf Course Architects (ASGCA) have launched a collaborative program to help publicly accessible golf facilities improve the design and maintenance of their courses to deliver a better experience for their customers.

Combining the expertise of ASGCA member architects and USGA agronomists, scientists and researchers, the program will provide pro bono consulting services to facilities that need assistance to achieve their goal of making their layouts more enjoyable and reducing their maintenance costs.” [3]

The USGA is going to provide services to facilities with the goal of making their layouts more enjoyable and reducing their maintenance costs.  They could easily allocate resources to golf courses that have little chance of being economically viable or achieving the USGA’s mission.  It is my opinion that the Executive Committee and management at the USGA has little knowledge of what is required to successfully manage a golf course.

Further, in November 2015, the USGA announced (click here),

“In the first research effort of its kind, the United States Golf Association has enlisted the University of Minnesota for an extensive study that it hopes will revitalize the game as it is known today.”

The USGA is setting “a modest goal” to save the industry 10 percent of the roughly $10.4 billion being spent on course maintenance, irrigation, and restoration at America’s 15,300 golf facilities.”

While I am thrilled that the amazingly talented and entrepreneurial Dr. Brian Horgan and Dr. Jim Turmin are the beneficiaries of the partnership with the USGA to renovate the University of Minnesota golf course, in touring Dr. Horgan’s turf farm several years ago, he stated to me that his findings only apply to a very narrow area of 100 miles north or south and 400 miles east or west due to typography and climate.

If $4.2 million is allocated that many benefit up to 500 golf courses, what is the capital investment required to address the golf courses for the entire nation and how should it best allocated?

Opportunity:  Resources that the USGA might invest to improve the financial health of the game could benefit astute owners and facilitate the USGA accomplishing its “modest goal.”  However, the USGA management and Executive Committee, in many opinion, are too insulated from the business of golf to make informed decisions that will improve the financial health of the game.

If the USGA is to continue these positive initiatives, the Executive Committee and staff should become far more diverse in educational backgrounds with deeper experience in the golf industry.   Those on the Executive Committee should be paid and include Executive Directors from State Golf Associations, senior leadership from multi-golf management companies, successful golf course owners, and representatives from the PGA of America and National Golf Foundation.

Software Companies

Role: Create the technology to provide information on which a golf course can operate efficiently to optimize the financial return on its capital investment.

Laid Astray By:

Creating all the software tools that a golf course needs is a daunting task and isn’t effectively achieved by any firm.  Golf course owners are left with little options to license point of sale and tee time reservations, a food and beverage module, email marketing tools, website development and yield management from multiple vendors.

Software companies, save for Golf Channel and Jonas, are small businesses with the net income providing a standard of living for the owner.  Thus, self-preservation at the expense of a golf course owner’s interest is a dominant theme.

The issue is that nearly all software firms – especially GolfNow (Golf Channel), effectively block the integration of software by various vendors for a common client.

IBS has long refused to allow the integration of its fine software with the EZ Links Tee Sheet.  EZ Links and Golf Channel have blocked the integration of their tee sheets with Quick 18.  Club Prophet, who through assistance of an Executive Director of a PGA Section was able to win a major contract, then refused to assist him establish a state-wide tee time reservation system by facilitating an interface from their tee sheet to a web booking engine for a dozen golf courses.  Club Prophet, because they couldn’t agree with the licensing fee they wanted to receive from Golf Channel for integration to its software, dropped GolfNow as a supported vendor blocking their clients from using GolfNow.

Opportunity:  There may be none.  A golf course owner must hold software firms accountable for the integration to platforms they desire requiring, by contract, that vendors agree to such a provision before being selected.

Further, the NGCOA and PGA of America should undertake an independent review of the software products available and the integration between platforms that exist so that a golf course owner can make a knowledgeable decision before investing in this critical component necessary to successful manage a golf course.

What are the Lessons for the Golf Course Owner?

As a realist, I understand that many of the above thoughts being considered by the Associations or software firms maybe slim.   Thus, as a golf course owner you are on your own.

However, here are seven steps that you can implement that will define and help you achieve the financial potential of your golf course.

Step 1 –GLMA

The interrelationship of seven yardsticks within a ten-mile radius of your facility defines its potential:  MOSAIC profile index, the ethnicity, age and income of those likely to visit your facility, the number of golfers per 18 holes, your course’s rack rate and its slope rating.  Learning these numbers is paramount.

Step 2 – WEATHER

A golf course can measure, through the services of Weather Trends International, the number of playable days during the past ten years highlighting where management has out-performed or under-performed.  More importantly, you can leverage reliable weather forecasts to learn:

• When should seasonal labor be hired and when to notify their services should be curtailed.
• The optimum window to aerate and over-seed.
• How to minimize irrigation and fertilizer expense.
• The ideal days for outings, tournaments, and wedding.
• When to implement off-season rates in the Spring and Fall.
• Ideal delivery dates for merchandise and when specials should be run to liquidate dated inventory.

 Step 3 – TECHNOLOGY

The website design of 98% of all golf courses is poor; thus, revenue opportunities are missed.  The golf course website should be transaction not merely information oriented.

Step 4 – FINANCIAL BENCHMARKS

Financial benchmarks provide keen insights.  Examining the data provided by Golf Datatech, Links Insight, ORCA, and PGA PerformanceTrak, can identify how outliers are adversely impacting your operation.

Step 5 – AGRONOMY AND ARCHITECTURE

The golf course is a living organism that requires constant capital reinvestment to maintain the customer value proposition to avoid the death spiral of a declining experience.  There are 13 components to a golf course with varying life cycles.  Maintenance crews perform 38 tasks at different intervals.   Ensuring the playing field provided to the customer is consistent and that the fees posted and expenses incurred are in balance is essential.

Step 6 – THE ASSEMBLY LINE OF GOLF

Perhaps the most valuable asset a golf course creates is its brand.  That brand becomes enhanced or negated as a customer proceeds through the 14 touch points.  Few golf course owners secretly shop their facilities to independently test service levels.

Step 7 – THE GOLFER

A golfer’s habits, preferences, and loyalty are distinct serving as the catalyst that motivates them.  Eighty-two percent of golf courses don’t survey their customers.   You should.

WHAT?

The key to the profitable operation of a golf course starts with knowledge.   To ensure you are on the proper pathway to success, at JJ Keegan+ we offer a bevy of options to guide you.

Our business of golf book series offers a textbook for the seasoned professional – Why? How? What? and a basic primer – What Are You Thinking?  The series has sold over 5,000 copies in 17 countries is the largest selling textbook in the golf industry and is used by 16 colleges for their capstone class in professional golf management.

Our enhanced knowledge program comprises a cafeteria approach.  Select the local market analysis, the weather service, the secret shopper service or undertaking a customer survey on your behalf.  Many of our clients like to access our RESOURCES library which includes a complimentary private quarterly Webinar.

For those who are self-starters and like to work independently, our set of 21 analytical, financial and operational templates is available for download in three sets:  basic, superior, and elite.

One of the most efficient and economical ways to benefit from our vast research and experience is to participate in the quarterly webinar series of 10 classes where we privately guide your team in creating a winning playbook.

The most comprehensive option available is for an in-depth field study in which all of our affiliated industry experts are engaged for your direct benefit.

WHEN?

We know that the vast majority of people resist change.

If you are an innovator who is willing to brainstorm what is possible, if you are an early adopter who likes to lead an industry by testing new paradigms, or if you are part of the early majority that seeks to benefit, confirm, and leverage the successful efforts of others to gain a competitive edge, at JJ Keegan+ we can provide you a tremendous advantage.

While the industry’s Associations and Software Firms are likely to continue spewing academic pabulum, our real world answers will prepare you in 2016 to dramatically improve your financial results.

[1] https://www.pga.org/membership

[2] http://www.usga.org/about.html

[3] http://www.golfcourseindustry.com/article/USGA-ASGCA-public-golf

What do you think?   Comment below.