In three plus years here in the PNWPGA Section, I’ve had the privilege of meeting many wonderful professionals in the golf industry, especially PGA members and apprentices. Recently, I was talking with a friend, whose recently started working within our industry but who has incredible experience in marketing. David White, the President of Fanstactic (a social media marketing company based in south King County, WA – www.fanstactic.com) and I were talking about the how golf courses can use digital marketing and social media to grow their business, increase the size of their membership, etc.
Fanstactic is a niche company whose list of clients is made up of small businesses, including golf courses. In our most recent visit, David told me a story about one of his clients who owns a roofing business in Seattle, WA. Per David, the owner pays $150 for a “qualified lead” on a roofing job. At first glance, that may not hit home for most people. Let’s slow down and break it down:
- $150 for a qualified lead: a qualified lead is not a guaranteed sale, just a good opportunity to make a sale.
- According to Costhelper.com, the average roof replacement cost runs from $11,209–$17,060. Based on this data, one can see why the roofing contractor feels it’s worth paying for a good lead.
- Note: Before the roofing contractor decided to pay $150 per lead, they had to do the “Roofing Business Math” in order to see the value of a good lead; they could’ve also relied on costhelper.com’s numbers, or someone else’s but they likely had to validate on their own.
- If the roofing contractor can gross $15k on a roofing job (or possibly a whole lot more if the job is for a commercial or municipal property) we must assume the roofing contractor doesn’t rely on just anyone to close the deal…they rely on a trusted, knowledgeable “closer.” Why? Think of the cost of not closing the sale. In this frame of reference, I’ll bet the company’s owners would say they can’t afford to not close the sale!
That makes good sense to me. But then I must ask, how does this match up to our priorities in the golf industry? Let’s answer this question and see what we can learn. Let’s consider it based on various parts of the golf business.
PRIVATE GOLF CLUBS
Memberships: In a quick review of “player development math” for private clubs, we can easily calculate the value of a qualified lead for a golf membership. See figure for actual calculation model.
In a quick review of a few clubs in the south King County area, a fifteen year membership has a lifetime value range of $145k to $180k per member. That’s a lot more than $15,000…a whole lot more! In comparison with the roofing contractor, who has a dedicated closer (salesperson) to make the sale, most private clubs don’t have a “closer” ready to make the sale with every potential membership. Instead, well-intended staff who don’t really know the game all that well, don’t know the Club and/or don’t know how to get the member engaged or who to engage with.
What’s a closer? Mike Heisterkamp, PGA head professional at Chagrin Falls CC in the Cleveland, OH is a closer. In 2013, he played golf with 15 prospective member clients at CFCC – 14 of them joined! That is 93.3%! There were 12 other prospective member rounds/visits that same year (who didn’t play with Mike Heisterkamp.) Of the 12, just one joined, or 8.3%. Another question: If you were the President (or GM) of Chagrin Falls, would you want to ensure Mike plays with EVERY PROSPECTIVE MEMBER in 2015?
And we’re not even talking about the math yet. Assuming the lifetime value of a member at Chagrin Falls is $150k, it would seem Mike created $2.1 million in revenue for the next 15 years, and $140k for 2015 alone. Heisterkamp is not a dedicated membership sales professional, he runs a golf department, including the daily operations, member events and much more at his Club. But, if these numbers are correct, it would seem Mike should be allowed to do more of this activity AND maybe he should be incentivized for it. In comparison, many professionals are incentivized for success in merchandising and/or management of payroll costs. Let’s say Heisterkamp and his staff do an amazing job in merchandising, and increase gross sales in the golf shop by $200k (for net revenues of around $60k) it’s still not even close to the impact of his efforts as a closer with 14 new members.
Again, I ask: If you were the President (or GM) of Chagrin Falls, would you want to ensure Mike plays with EVERY PROSPECTIVE MEMBER in 2015? If you are a golf professional employed at a private club, are you a closer like Mike Heisterkamp, PGA? (Are you working on becoming one? Are you tracking your success as a closer?)
PUBLIC-ACCESS GOLF FACILITIES
Group Outings: The same value for some group outings rises to the level of a new member above. In my experience the amount of work for a 12 player group is often similar to 144…or even 360 players (a 45-hole shotgun). The quality of the work in the close, knowing that promises made will be kept can result in great bottom line value.
Golf Business Leagues: These staples of public facilities have taken a back seat to the larger group outings, but it would seem it is time to re-elevate this business model. Let’s do some math again – A group of 24 players, paying $29/week ($696 total/week) for 16 straight weeks is worth more than $11,000. Creating an off-peak golf league (focused on fun, social formats) could create significant value for the facility. Typically, these leagues happen through one or two relationships and a vision “sold” by a golf professional. Maybe your facility has some soft, off-peak times after 6:30 pm on weeknights that would be a perfect fit for a social, fun golf league.
In closing, let me ask you once more. Are you a closer? Better yet, a closer with a vision who understands their ability to drive bottom line revenue AND track. If not, are you becoming one?
Monte Koch, Certified PGA Professional/Player Development
Player Development Regional Mgr/Mentor**
PGA of America (Greater Seattle/PacNW PGA Section)
Email: Mkoch@pgahq.com Cell: 206/335-5260