How to Find Growth

Recent editions of the Golf Pro Advisor have focused on two themes:

• Setting revenue and goals performance targets (number of lessons and clinics)

• How to Identify your customer segments and keep them happy

This edition combines both themes. It focuses on setting revenue and performance targets for the customer segments with the highest growth potential.

The Model

To recap, I created an Excel model for a hypothetical club, the Fictional Golf and Country Club (FGCC). To access the model, click here. You can adapt the model to your own club.

FGCC has 500 active golf members. I broke the golf membership into five segments:

FGCC generates approximately $500,000 from its golfers, primarily from lessons, clinics, and golf shop sales.

Growth Segments

Let’s say you wanted to increase revenue by 10% or $50,000 over two years. Where would that growth come from?

Overall, you’d need to increase average sp

ending for 500 golfers over a six-month season by $100 per golfer to $1,100 from approximately $1,000. That won’t happen.

You probably can’t increase spending by your top category (Heavy Hitters) or your bottom category (Low Spenders). That eliminates 40% of your golfers.

Heavy Hitters are likely at their maximum spending level. Your mission is simply to keep them at that level

Low Spenders probably won’t increase their spending no matter how much they play or how much you encourage them. They’re just wired that way.

Juniors represent a relatively small percentage of golfers (10%) plus their spending is controlled by parents. As a result, this segment won’t contribute much to your growth effort.

Focus instead on the two remaining groups: Enthusiasts and Occasionals. These havethe highest growth potential.

Each of these groups represents 25% of the golfers.

Together, the comprise about half of the total sales as well as half of the golfers (125 golfers in each group).

Enthusiasts and Occasionals are most likely to be influenced by special programs and effective communication. I described these in detail in How to Keep Your Customers Happy, the last edition of The Golf Pro Advisor

1. Group Clinics

2. Special Activities – Non-competitive women’s groups, for example

3. Golf Leagues

4. Fitness Programs

5. Shorter Rounds.

The Growth Opportunity

The challenge is to get your Enthusiasts and Occasionals to take more lessons and clinics and to spend more in the golf shop.

Look at this in two steps:

• Step #1 – What are they spending today?

• Step #2 – What would they have to spend to reach your growth goals?

Here is what each segment does today:

Now for Step #2. A simple, but not very realistic, approach is to assume that 40 Enthusiasts move into the Heavy Hitters category.

The math looks like this (Seasonal spending per golfer):

• Heavy Hitters - $2,820

• Enthusiasts - $1,560

• Difference - $1,250

• $50,000 divided by $1,250 = 40 Golfers

That would require an 81% increase in spending per golfer. Not likely!

Here’s how you could generate a $50,000 increase with a combination of additional lessons, clinics, and shop sales. It assumes a lesson fee of $100 and a clinic fee of $50.

You probably can’t get all 250 golfers (both segments combined) to spend more money. But you need more than 40 golfers to meet your growth goals.

Could you get one-third (83 golfers) to spend $100 a month more over the course of the season?

That means 250 more lessons, 250 more clinic participants and $12,500 more in shop sales.

Making Your Plan

Now you’ve got to make a plan:

• Choose an overall revenue growth goal

• Set performance targets (number of additional lessons etc)

• Decide which groups will deliver the growth

• Develop the programs to make it happen