The Key to survival. Stay out of the rough. Monday, 9 September 2013
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1 The Key to survival Stay out of the rough Monday, 9 September 2013
2 Cash, Sinkholes and Sources 69.3% of revenue comes from membership. 41.9% of clubs reported declining revenue. 49.6% of clubs reported that their membership numbers had declined. Only 24% reported growth. 84.2% of clubs applied for at least one grant in the last year. A number of clubs are technically insolvent, based on the quick (acid) ratio. 2
3 1. Attracting new members 2. Retaining existing members 3. Attracting and retaining volunteers 4. Training volunteers 5. Recruiting paid staff 6. Retaining paid staff 7. Finding a treasurer 3 8. Obtaining sufficient income 9. Being an attractive alternative in a competitive market 10. Reporting to funders 11. Reporting to government 12. Maintaining financial viability 13. Funders
4 Main challenges = Agenda Attracting new members Retaining existing members Being an attractive alternative in a competitive market Obtaining sufficient income Maintaining financial viability 4
5 Critical issues facing Golf Clubs in New Zealand Lack of income diversity Untapped target markets Increasing operational costs Lack of genuine differentiation Majority are not for profit organisations with member governance Creates an inward facing culture with reluctance to change It is the lack of responsiveness to the changing environment that prevents golf and golf facilities from achieving their potential. Source: National golf facility strategy
6 Is golf relevant? Why? What purpose does it serve? What challenges hold people back from participating? Why are people leaving the game? How do you think the industry will change in the next 5 10 years and what do you need to do to adapt? Is your club sustainable in its current form? We cannot solve our problems with the same level of thinking that created them - Albert Einstein 6
7 Competition facing Golf Clubs 2007/08 Active New Zealand Survey 7
8 Demographic profile 8
9 2007/08 Active New Zealand Survey findings 12.8% of NZ aged 16 years + (416,221 people) played golf at least once in 12 months In any week 3.4 percent of all NZ adults (109,371 people) played golf at least once. Adults who played golf also took part in 7.6 different sport and recreation activities (national average is 4.6). Other activities include walking, swimming, gardening, equipment-based exercise and cycling. Men also participated in fishing, jogging, cricket and tennis Women also participated in tramping. 9
10 Being an attractive alternative In a competitive marketplace, are you an attractive sporting/recreational activity in your local area? What other activities are available in your local area? Why should people play golf rather than doing something else? What is your club s point of difference? What are the barriers to joining your club? Cost Perception Time Ability Equipment What do you do to help people get started in the game? 10
11 Innovate to survive and grow Identify other services that you could offer Offer group coaching for beginners to reduce entry costs Provide affordable entry level equipment, apparel and accessories 11
12 Innovate to survive and grow new members Create a short game to appeal to those with less available time Offer easier courses for beginners Establish a course grading system to help people navigate through the game on appropriate courses for their level of play Set tee times for beginners Make someone responsible for welcoming new players into the club and introducing them to other players Introduce a buddy system If a new member doesn't feel fully 'connected' with the club within the first 12 months you risk losing them at renewal 12
13 Creating the Third Space 3 rd spaces are anchors for community life Affordable Food and drink should be available Easily accessible (easy to get to and park) Have regulars (people who frequently visit) Welcoming and comfortable New friends and old friends can be found there Community Home Work 3 rd Space By definition, human beings are social creatures having a strong sense of community and wanting to belong to something. 13
14 Do you create a third space environment? Create a community environment that people want to be part of Remove the perception of elitism First impressions count What does your website say about your club? Are staff welcoming and friendly? Do your members welcome new people? Do members like to stay after the game to socialise? Would people go for a drink or to socialise even if they are not playing? 14
15 Dress Code and Etiquette Dress Code Members, guests and visitors are required to comply with the following dress regulations ON COURSE ATTIRE A high standard of golf attire is required to be worn on the golf course and practice area This includes: Tailored shorts, sports trousers or skirts A golf or collared shirt or blouse Golf shoes and socks Beach shorts, beach wear, track pants & suits, jeans, t-shirts & hoodies are prohibited Soft spike golf shoes are preferred CLUBHOUSE ATTIRE A clean, neat and tidy standard of dress is required at all times Beach attire, track pants or suits, t-shirts (unless with a jacket), singlets & jandals are prohibited Dress jeans are acceptable The Club has full and final authority to determine what is acceptable Please conform to the required dress standard to avoid embarrassment 15
16 Communicating your club as a third space? At Settlers Ghost our Core Values are: We C.A.R.E We CARE about our members, our customers and our employees. We CARE about maintaining a positive social and golf experience. We CARE about being good stewards of our land. We CARE about continuous improvement and innovation. We CARE about community responsibility. We CARE about doing the right thing. C. - Commitment A. - Accountability R. - Respect E. - Excellence 16
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18 Marketing your club - How Kiwis Buy Word of Mouth Recommendation Testimonials Search 18
19 Create advocacy to increase membership Customers want what they came for Do the basics right and your customers will only be satisfied Exceed expectations if you want advocates What do your customers expect from you? Do you always meet those expectations? Is there anything that you can do to improve? What can you do to exceed those expectations and develop loyalty? How would people describe their experience with your club? 19
20 Finding new members - Who are your target customers? Age / stage / Gender / Financial status Where do they live? How can you reach them? Do you offer what they want? Do you know the population and demographic breakdown of your catchment area? Do you know what percentage are members? 20
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24 Is your biggest competitor the nearest club? Is the market saturated? 393 clubs in New Zealand, 88% traditional mid level Average utilisation 14% urban (Auckland 23%), 8% rural Titirangi Akarana Maungakiekie The Pines Golf club 24
25 UK and NI Golf trends Registered golfers club member Nomad golfer no membership. 68% of golfers (2.1 : 1) Occasional golfers - play 1 to 11 times a year Regular Golfers play 12 to 51 times a year Avid golfers play weekly Regular + avid golfers = 39% of golfers but make up 75% of expenditure What is your strategy to transition players from occasional to avid? From Nomad to member? 25
26 Reasons golfers give up Golf is competing with other sports and entertaining experiences Unwritten rules and culture creates insecurity Snobbish attitude exists Pressure to perform Difficult to book a tee time Pace of play - pressure 26
27 CANADIAN GOLF CONSUMER BEHAVIOUR STUDY 27
28 18-25 years Excited about the game, (more entering the game, playing more often) They want a game that is fun, social, enjoyable and challenging. Present the game as one that is difficult to master while providing evidence of how you can learn, improve and satisfy the desire to get better. You just can t leave them to their own devices to grow in the game. You have to show them and help them make the connections. 28
29 26-35 years of age less enamoured Their initial excitement is fading (equal uptake and lapse) Beginning to see the game more as a series of challenges (time, money, improvement and growth) that are difficult to overcome. Remind them what attracted them in the first place - fun, enjoyment, socializing, challenges and pride, or you risk losing them forever. Provide them with an affordable fun learning environment 29
30 46-59 year old group - disillusioned Disillusioned (More players leave than join) Become frustrated with their play not getting better, not growing their game (26+ handicap highest risk of defection) Frustration over booking tee times, pace of play rules etc. Challenges of time and money more likely to drive them from the game. 30
31 Retention strategy = market research Key things you MUST know about your members Who they are? (Age and gender) Their playing habits (frequency and preferred playing times) What motivates them? How can you keep them interested in the game? How much they spend What percentage use the bar, or catering facilities? How many support the professional? Who buys equipment from the pro shop? Why do members not renew? Do you send out exit surveys? What percentage of players are casual? How many casuals come back? 31
32 Innovate to survive and grow - Retention Help players overcome time & money challenges. Shorten courses (takes less time to play) Create a more challenging environment by grading courses to inspire players to improve Offer group lessons for different levels to make coaching affordable and retain at risk members Help them with tough shots e.g. under trees members that have not played in the last 4 weeks Identify times that members like to play and them available slots Help members find playing partners (Buddy system) Survey players Send out exit surveys 32
33 Maintaining Financial Viability Money in money out No surplus for reinvestment Depreciation claimed in P & L is spent No provision for equipment repair and replacement No provision for refurbishments Perception that cashflow issues solved with: - More members Inheritance Land sales 33
34 Diversification of revenue Membership Green fees Corporate events Bar/restaurant Venue hire and catering Competitions Golf lessons Pro shop 34
35 Analysis required to identify issues What is the financial status of the club? Can you separate income and expenditure for: - Course Club house Pro shop Which component is covering its costs What is the most profitable part of the business? 35
36 Club house Viability Restaurant and Bar What percentage of members use it? Do you welcome non members? Do you hire the venue for events? Do have credit card payment options? Does the revenue from the bar/restaurant cover its costs? 36
37 Course viability Is membership growing or declining What percentage of players are casual Do membership and green fees cover Admin staff Green keeper Course maintenance Water 37
38 Pro Shop Viability How many members buy from the pro shop? Where else do they buy their equipment? Why? How many members book lessons? Does the revenue from the pro shop and lessons cover it s direct costs and wages? 38
39 Testing profitability across businesses Income Direct/Variable Expenses Bar/Restaurant Food and alcohol sales Venue hire Bar/Restaurant Bar and restaurant staff Cost of goods sold (food and beverage) Pro Shop Golf tuition Equipment sales Course Green fees Membership fees Sales Pro Shop Direct salaries Cost of goods sold (products sold in the shop) Course Green keeper Fertilizer and course maintenance products Club administration staff Mower and equipment fuel Water 39
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41 Testing Financial Viability A Profit Forecast is a map, that indicates the financial direction the business expects to follow 41
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43 Conclusion Global research shows a worldwide trend in declining memberships Defection is highest in year olds Remove elitism and create a 3 rd space in your community Clubs need to adapt to survive Creativity is key to finding workable solutions in each community Graded courses will provide a progression framework for players 43
44 The Formula for Success D x V x P > C = S Dissatisfaction x Vision Fear of x Plan > Change = Success The most important shot in golf is the next one. Ben Hogan 44
45 45
46 Thank you 46
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