By Team foreUP on Dec 27, 2018 12:24:00 PM
Operating a golf course can be a relatively niche and difficult business idea. Golf has to compete with several other recreational sports or hobbies and the space required by a golf course is far greater than most other typical businesses. That’s why turning a profit from a golf course can seem like an ever-increasing challenge. It’s not easy to operate a golf course and you’d also be surprised at just how tough it can be to retain customers and draw in new ones.
In fact, around a dozen golf courses closed across America in 2017 and the number seems to be growing every year. What's more, many golf courses have seemingly been abandoned in 2018 and the land is being converted into housing, parks and even flood protection systems. To many people, it would seem like the golfing world is slowly starting to die off–but that’s far from the truth.
The reality is that these are changing times and it’s time for golf courses to be proactive in finding new golf course revenue-generating ideas. In this article, we’re going to give some helpful advice on how you can boost your profits and stay in business for many years to come.
Adding Value to Memberships
Some of the most expensive golfing memberships in the world cost several thousand dollars per year. They offer some of the most exquisite courses in the world that you can play on, but do you think those clients are paying just for the golfing experience? Absolutely not!
When it comes to adding value to a membership, you need to introduce more golf course revenue ideas that extend beyond just the golfing. Remember that your membership should be more than just an entry to the course–it needs to be an experience. Look at the value your membership is offering and ask yourself truthfully if it’s enough for your business. Should you be adding more amenities? Should you be increasing the quality of your facility? Should you add extra health and fitness services?
Prestigious golf courses don’t command membership fees in the thousands for no reason–they’ve built up that reputation because of the experience and services they offer, not just because they got lucky. Look for additional ways to add value to your golf course membership and you’ll realize that people are willing to pay more to play on your course provided that you offer additional services and bonuses.
Utilizing Loss Marketing Strategies
In marketing, there’s a concept known as the loss leader strategy. The idea is that an item of yours will be sold at a loss in order to attract customers to your store so that they’ll buy other items. This is typically seen during Black Friday and other holiday sales, where a specific item will be marketed (in some cases, manufactured or produced for that specific holiday) and sold at a loss to attract customers. In many cases, your loss leader isn’t actually a loss at all and could net a very small profit or even break even.
A good example would be offering your customers a set percentage off a friend or family member’s first round of golf. This will attract new customers and tempt them into signing up and becoming a member themselves or even playing a couple more rounds. It means more people will come to your course, resulting in more people spending money on things such as food and golf club rentals.
Although it might seem like you’re losing money selling tickets at a reduced price, you’re effectively drawing in more customers that will likely purchase additional items when they’re actually in your course. This is one of the best golf course revenue-generating ideas because it not only increases immediate profits but also introduces new clients to your course.
Focus on Your VIPs
There’s a concept known as the Pareto Principle, or more commonly referred to as the 80/20 rule. The idea is that 80% of the results you see will come from just 20% of the causes. In the case of golfing, it means that 80% of your profit will likely come from just 20% of your players. It’s not going to match exactly, but the principle is that a smaller portion of your causes will lead to the results.
This is a concept that is well-known in the mobile gaming industry as well, where games are offered for free to all players and revenue comes from microtransactions that are used to pay for in-game bonuses. In that industry, anywhere from 50 to 90% of a game’s revenue can come from as little as under 1% of the game’s population. The numbers are skewed because anyone can download and play the game, but the idea is still the same.
Applying This to Golf
This rule can also be applied to the golfing world.
Whether it’s hosting VIP-only events to generate revenue or offering your most loyal players extra bonuses and discounts, you want to treat your most loyal customers to a better experience, entitling them to a much more unique and luxurious experience which regular players can’t get.
As you offer more advantages for loyal and higher-paying customers, you’re going to realize they will keep coming back for more and you need to continue to reward their choices to make them feel like they’re a valued member of your club. Simple milestones for the number of rounds they’ve played can give them a sense of accomplishment, hanging up nameplates in your club’s lounge could give an air of prestige, and offering them private or personalized services will make them feel like a real VIP in your club.
Hopefully, this article has introduced some unique and creative ideas to help you boost your golf course revenue. It’s time for the industry to move forward by taking a look at how other industries have prospered with the help of technology and marketing strategies that have been tried and tested in other scenarios. There’s always room for growth in any industry, and the golfing world is just starting to scratch the surface.