Golf ‘is devalued by Groupon’
By Seamus Rotherick
The chairman of the Organisation of Golf and Range Operators has said that the sale of green fees by internet companies such as Groupon is so damaging to golf clubs that it could strip them of any power they have to control prices and tee time availability.
Colin Jenkins PGA, who is also the owner of Staplehurst Golf Centre in Kent, warned that using companies not affiliated to golf clubs to market tee times to thousands of people could result in clubs being in the same position as farmers, when it comes to negotiating prices for their produce with supermarkets.
“Supermarkets now dictate the produce, its colour, size and taste, and then proceed to impose very tough payment terms,” he said.
“If golf clubs are not careful, they may suffer the same fate.”
Jenkins stated that “third party tee time resellers”, such as Groupon, the current market leader, which saw its UK golf market grow by 100 per cent in 2011, are offering ever-cheaper green fees. “The whole world seems to have gone voucher mad with Groupon. Discount offers are now seemingly the only way to attract new trade. Great if you are a golfer and great if you are making a commission from these trades. But maybe not quite so good if you are a golf club, finding that you have less income from more traffic,” he said.
“The strangest part of this is that golf clubs seem to think that they need these companies to help them through difficult times when the tee time resellers are partially to blame for the difficult times!
“If they were, at a stroke, no longer able to offer prime tee times at a discount, then what would happen? Golfers would continue to play when they could. Golf clubs should take a firmer stand – in fact, many of the clubs that currently do not accept discounted tee time offers are doing better year on year.
“These businesses have succeeded in offering masses of people more product for less money. Golf clubs are expensive to run and prices cannot continue to fall simply because this is what the customer says they want – more for less is a poor master.”
He particularly warned of the practice, carried out by some tee time sales companies, in which they are prepared to market the club for free – provided they choose when the tee times are and what the discount is, as this would help the marketer differentiate from its competitors.
“This is the scariest development of them all, as golf clubs then lose control of their tee sheet and pricing structure to someone else,” he said. “The clubs end up undercutting themselves!”
He also stated that in the USA, where Groupon has been bigger for longer, the situation has got so severe that the National Golf Course Owners’ Association has produced a guide to American golf clubs “educating them” of the threats and dangers of online tee time resellers.
Jenkins accepted that some golf clubs do benefit from Groupon, however. “Some do require a volume of trade that is hard to achieve, and they accept that they will get less for their core green fee in return for a high number of visiting golfers. This can be very useful when the club has a busy food and drink operation and looks to capitalise on secondary spend to regain the lost margin on its golf course,” he said.
In relation, The Kent and Surrey Golf Club has been using Groupon since December. “Without these internet deals, we wouldn’t have been as busy,” said a spokesman. “We are booked up every weekend like never before, also our food and drink sales have gone through the roof. Groupon and other internet sites have improved our club, it has made us busy, given us revenue we would not have got and is putting our name back out there.”
While Addington Court Golf Club in Surrey secured 184 customers from a recent Groupon coaching deal, and 176 of these were retained.
Jenkins comments come just a few months after the manager of Chalgrave Manor Golf Club in Bedfordshire called for all British golf clubs to join forces to set up a rival company to Groupon, in order to ensure the clubs receive more of the money the players are spending on the game. “Groupon devalues memberships and green fees,” said Steve Rumball. “We need a central organisation that is operated by golf clubs for golf clubs.”
By Seamus Rotherick
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Colin we should copy the super markets as they know how to retail .
I didn’t find anything like groupon devalued golf, somehow it is favorable to golf.
It doesn’t matter what method you use to attract new players to your course, if you fail to collect their contact details, and fail to have a decent email marketing programme in place, frankly why do you bother?
If you make the extra effort required to get names and email addresses you can by-pass the voucher code route by running your own promotions direct to your marketing database.
The Groupon model works for some and not others, the only real winner is Groupon.
We stopped accepting vouchers at Mount Pleasant 4 years ago, found it was mainly the same few people using them all the time.
The only discount deal we accept is the County Card which offers members reductions at nearly 1000 courses, but usually only for 1 visit per year. It makes no economic sense to ‘undersell’ golf. If we feel the need to discount at certain times we do it though our email list and website.
Figures can easily be manipulated to back up anything you say.
Take Addington figures for instance. How many of those 184 golfers who turned up with their Groupon Voucher would have been playing Addington at full price in the first place?
If they were 184 NEW golfers that did not usually play at the Addington then I can see the benefit, but that is almost certainly not the case, and also suggests why the retention rate is so high.
Groupon is a lazy way of course promotion which ultimately benefits only Groupon and the consumer.
I’d say that Groupon is actually encouraging people to play more!” AGREE! In capital letters
2-4-1 and Groupon deals discourage membership overall & are bad for golf IMO-More benefits for members required
Clubs choose to use the service though,if all clubs did not accept groupon or 2-4-1 vouchers membership would be more attractive
and at the same time, I’ve been back to 3 places I discovered through group-on and paid full price
I know people who follow the deal, they wouldn’t pay full price somewhere where they got a discount
I would say courses are getting rounds sold cheap but only 70% are used by the purchaser it is win win for all
@DulwichGolfClub I think clubs need to look at the value proposition and not simply see low cost as being the way
@Dulwich Golf Club – that would depend on the experience- if it’s good enough, players will return
We have been using the likes of Groupon now since December and without these internet deals, we wouldn’t have been as busy, we are booked up every weekend like never before, also our food and drink sales have gone through the roof. Groupon and other internet sites have improved our club, it has made us busy, given us revenue we would not have got and is putting our name back out there.
I can’t see nomadic golfers going back and paying a full fee at a club where they got a great deal.
but agree its a very good way of growing the game and generating interest from non-participants
Grpn can b a gud way 2 explore new clubs. Persnally i want clubs 2 give gr8 2ball+buggy deals on ther website. Food/Tea irrlvant
It’s all about the club and their management. Groupon encourages newbies, but clubs must give priorities to members
Understand the principle. Cheap golf for the end user and everyone loves a bargain. Not good value at all for golf clubs. Empty tee or cheap cheap golf? Great arguments on both sides but for my club its a no.
@HirselGolfClub We would agree. We are also trying promotions through @GolfinScotland1 Its a tough time for all leisure sports
Groupon is great for the customer but not for the supplier. You pretty much give groupon 60% of the offer price and you have to discount perhaps 50% at the start so you are only getting about a fifth of your normal price. The principal is that they will return and pay full rate, so its an advertising promotion, in truth it just does not happen and the ‘voucher hunters’ just hop from deal to deal. Golf clubs must stop doing silly deals that encourage golf to be cheaper by not being a member. Once you become a K-Mart its hard to get back on Saville Row. The remarks that say you are getting some money rather than no money really do not understand the business world, people wont like that its £10 green fee last week and £30 this week. Most golf clubs need about £20 per round to break even, it does not take much of brain to realise that if you sale at inside that price you will go bust. Groupon could be good for some promotions if you can upsale, but for the green fee market they just want to pay and play as cheap as possible. I have spoken with a lot of clubs that have trialed Groupons and every single one is ‘never again’, I was open minded and we trialled lessons and a trial membership with a flexible membership scheme. I hoped it would work but I am a never again as well.
I would rather take 2 for 1 and that is saying something!
We looked at Groupon but it wasn’t worth it. We would have been making no money by the time we paid caterer for food in deal.
In economic terms it benefits clubs. 4 ball at 50% reduced or empty tee box? Furthermore it benefits golfers aswell #savings
I think its the same with everything, golf has entered the competitive world! Even TM have a driver for <£200 😉
Retaining customers is most impt thing. Too many companies see a quick income fix, vs. a long term business builder.
I just find it very confusing that clubs keep trying to out do each other with cheaper and cheaper offers!
I’m a member at a club but friends aren’t and they got the chance to play very good courses for cheap!
been to so many courses that don’t capture visitors emails etc for database so they can contact them with promo’s #lazy
here in Florida there are early bird specials to dine with to attract those who mightn’t otherwse come- lesser$- but diff
I don’t agree. I’ve played couple of courses this year that I wouldn’t have otherwise. that’s all money into their coffers.
i agree it is making golf affordable and accessable to many, who may then take up game full time
groupon is affecting the restaurant bus. Too. I can see the plus and minus’
however most clubs don’t have the products on offer to be able to capture customers (ie flexible membership).
if we look at coaching – @addingtoncourt retained 176 customers out of 184 that signed up to their Groupon coaching deal.
Groupon does not make you money in the initial hit but if you retain them thats when clubs get their payout
Richard, that’s the keen similar to the Alnwick case study but I too like others have tried/tested daily deals and shocked to find some clubs not making any effort to do data capture or drive the players into the pro shop/club house pre or post round.
Groupon is obviously a fantastic market channel but you do wonder if they are driving down prices far too much on top of taking very large commissions!
having talked to 15 clubs in Surrey about Groupon, there is a real mix of experiences. Good if you can retain them as customers
from my point of view,i am a memeber of a club so to go play other courses cost money i see it as a goodway to get out and about
I’d say that Groupon is actually encouraging people to play more!
absolutely. I’ve used it many times- good chance to experience courses/clubs that you wouldnt usually consider
how come? surely it brings in people to new courses they may not normally play, we booked a 4 ball through it yesterday