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Golf Pro Advisor: Who Are Your Best Customers?

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You’ve probably heard of the 80/20 rule. That’s where 80% of a business’ revenue comes from 20% of its customers.

That 20% is a customer segment. And those customers need special attention.

Golf operations have customer segments, too. Most head golf professionals have a mix of customers (members). Some spend a lot of money on lessons and equipment. Others spend little or no money.

It’s important to break your membership into customer segments. You want to tailor programs and communications for each segment. You also want to give each segment the appropriate attention.

Your “Customer Segments”

I’ve created a model based upon a hypothetical club: The Fictional Golf and Country Club (FGCC) with 500 golfing members. I divided the golfers into five segments:

  1. Heavy Hitters –Play at least three times a week, take numerous lessons, and spend a lot in the golf shop.
  2. Enthusiasts – Play at least once a week, take some lessons and clinics, and spend a bit in the pro shop.
  3. Occasionals – Play at least twice a month, take a couple of clinics a season, and spend a small amount in the pro shop.
  4. Low Spenders - Some may play a lot but this group spends relatively little money on lessons/clinics and in the golf shop.
  5. Juniors – Play a lot during the season and take lessons and clinics. Parents are willing to fund improving their children’s golf games

Don’t take this too literally. The segments and numbers are for illustration purposes only. You can create your own assumptions.

What does matter is the logic behind the assumptions. I’ve created an Excel sheet (click here) you can use to build your own segmentation model.

Who Are Your Best Customers?

Here is a snapshot of FGCC’s customer segments.

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For instance, the Heavy Hitters represent 10% (50 golfers) of the golfing membership. Yet, they represent 28% of the golf operations’ revenue.

On the other hand, Low Spenders represent 30% of the golfers but only 13% of the revenue.

Why is this chart important? First, it tells you who your best customers are. Second, it tells you where your risks and opportunities are.

The risk is that you’ll lose Heavy Hitters. The opportunity is that you can move golfers up the food chain. Enthusiasts become Heavy Hitters, Occasionals become Enthusiasts etc.

The other point is that you couldn’t even compile this chart if you didn’t have detailed data about each member: Number of lessons and clinics taken and amount spent in the golf shop. That requires a tracking system.

If you used QuickBooks for your invoicing, you’d already have the necessary data for a segmentation model.

What Differentiates Your Customers?

What differentiates a Heavy Hitter from an Enthusiast? Heavy Hitters are willing to invest more money in their games.

Here is the data per golfer for each segment. For instance, a typical Heavy Hitter during a six month season will take 12 lessons, visit the range 24 times, and spend $1,500 in the golf shop.

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Now, let’s look at the revenue each segment generates (see next chart). Here’s how the math works for Heavy Hitter lessons, as an example.

Golf –  Total – $66,000

  • 50 Golfers x 12 lessons each = 600 lessons
  • 600 Lessons x $100 Lesson Fee = $60,000
  • 50 Golfers x 24 range visits each = 1,200 visits
  • 1,200 Visitis x $5.00/Visit = $6,000
  • Shop – 50 Golfers x $1,500 each = $75,000

What Are Your Customers Worth?

The two charts below show the relative worth of each segment. In total dollars, Enthusiasts are the most valuable segment. They spend $195,000 (vs $141,000 for Heavy Hitters)

However, on a per golfer basis, a Heavy Hitter is worth almost twice an Enthusiast ($2,820 vs $1,560)

unnamed (2)

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The Next Step

Once you’ve built your segmentation model, it’s time to take action. You need to build programs for each segment

That’s the subject of the next Golf Pro Advisor.

I am happy to review the segmentation model for up to 30 minutes on the phone with any golf professional at no charge. If you’re interested, please email me at paul@hermancpa.com.  

Mike Heisterkamp Cracks the Code

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I recently had the pleasure of speaking with PGA Pro Michael Heisterkamp. Mike has been the head golf pro at Chagrin Valley Country Club in Chagrin Falls, OH for the past 22 years. He seems to have cracked the member retention code.

Mike Heisterkamp’s job is to run a golf program. But his mission is to attract and retain members for his club.

Mike started with his own belief system as to what is important in doing his job well. He then looked to other pros around the country and found that the most successful pros interacted regularly with their members.

Through some study and analysis, Mike discovered that every member who has done at least one of the following three things in the past few years has stayed at the club:

  • Played a round with the pro
  • Taken at least three lessons in a year
  • Gone on a golf trip with the pro

Mike’s System

Like all good head pros, Mike interacts with members and guests regularly: playing, meeting and greeting. But behind his casual and friendly demeanor is a system.

He tracks member activity methodically. For each member he knows: number and dates of lessons, golf shop purchases,  and number of tournaments and golf trips.

He also stays in touch with the club membership office to learn which members have resigned and who has joined the club. Then he matches that info to his activity tracking system.

Playing with the Pro

Mike runs a season-long “play-with-the-pro” tournament. He plays with many members during the course of the tournament and plays with some members multiple times.

He keeps a large scoreboard in the locker room to encourage participation and maintain enthusiasm. At the end of the season, he runs a shoot-out for the top three teams.

Lessons

Mike finds that if a member takes three or more lessons a year, that member stays with the club. He tracks the lessons that each member takes and, without being pushy, encourages certain members to take more lessons.

At the same time, Mike and his assistants regularly are on the driving range giving members free tips. This shows members that the pros care. It also encourages members to take more lessons.

Golf Trips

Mike runs a golf trip each year for about 15 members. On the even years, the trip is in the US and runs for four or five days. In the odd years, it’s a 10-day international trip.

Through his network of golf professionals, Mike gets his members on some of the top courses in the US and Europe.  Sign me up!

Mike sends out an email invitation to the entire membership for each trip a year in advance. The trips are so popular that they are usually filled within a week of Mike’s email.

Mike tries to avoid having the same members on the trip year after year. He aims to mix up the group by having no more than half of the previous trip’s group on the next trip.

Attracting Members

Mike goes out of his way to make non-members feel welcome at the club. When a member brings a guest to play, Mike makes it his business to know when the guest is coming and his or her name so that he can greet and welcome the guest by name.

He also regularly plays with prospective members. He says that in the past few years 11 out of 12 candidates for membership who played with him subsequently joined the club.

That’s a .917 batting average. Awesome!

Membership is Job One

Mike recognizes that maintaining the Club’s membership is not just the Membership Committee’s job. It’s his job, too.

The head golf pro plays an important role in providing a great member experience. That’s why members join and stay.

But Mike wouldn’t be as effective as he is without a system. He has devised one that works.

It allows him to contribute in a meaningful way to his club’s well-being, increase his value to the club and hopefully increase his compensation.

I am sure it also increases his attractiveness to other clubs looking to hire a new pro.  Mike’s systemized approach is something all head pros should consider.

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