The Customer Corridor of a Golf Resort

A few months ago, I discussed the customer corridor of a public golf course.  A customer corridor map can be a helpful tool that can help companies understand the needs of the customer. In this posting, I hope to help golf resort operators rethink the needs of their customers by mapping out the touchpoints of a guest visiting a golf resort. The goal of this map is to help resorts shift their focus on customer needs from an inside-out approach to an outside-in approach.

Bottom Line: There are many touchpoints at golf resorts that impact guest satisfaction. Although you may perform well at some of these touchpoints, if you fall short on others, guest satisfaction may suffer.

NGF’s golf engagement services help clients measure the customer experience, engagement of employees and perceptions of golfers in the local market. NGF’s systems deliver “Voice of Golfer” (VOG), “Voice of Employee” (VOE) and Voice of Market (VOM) intelligence. These systems identify individual factors that are most influential in creating satisfied customers, engaged employees and an interested marketplace. NGF is experienced building and executing these systems for golf course operators, management companies, resorts, retailers, equipment manufacturers and golf travel organizations.

 

To learn more about how NGF’s VOG, VOE & VOM systems can help your company succeed, click here.

Read Full Post »

Introducing the NGF Customer Satisfaction Index (NGFCSI)

In my last post, I discussed the difference between satisfaction and loyalty. I alluded to a method that would allow operators to predict the future behavior of their customers by understanding satisfaction factors and their influence on causing customers to behave loyally.

At NGF, we have developed this method. Introducing the…

NGF Customer Satisfaction Index (NGFCSI)

The NGFCSI is a proprietary formula that links satisfaction with the economic value of a customer. Customer value is determined through a unique customer score for every golfer ranging from 0 to 100 (0 the worst, 100 the best). The customer value is determined through the amount of course rounds that the customer plays, the word of mouth referral value of a customer (both good and bad) and the likelihood that the customer will be retained a year from now.

Simply put, the NGFCSI tells golf operators not only how the course has treated the customer in the past, but how the customer will treat the course in the future. As the NGFCSI increases, the customer asset value of the course will grow. Through preliminary benchmarks, we have determined that for every 5 point increase in NGFCSI, a course will grow their customer value by an average of an additional $60 (assuming a $50 spend per round) per customer, through increased play and better word of mouth referrals. For a facility with 3,000 customers this translates to a growth of the customer asset of $180,000!

Through the NGFCSI, we have grouped golfers into one of five categories.

• Super Advocates
• Satisfieds
• Apathetics
• Hostiles
• Assassins

The NGFCSI precisely predicts profitability through science. An operator that increases their NGFCSI score will financially benefit through increased rounds, improved word of mouth and reduced churn of existing customers.

Read Full Post »

Think You Know Your Customers? You Probably Don’t

Most companies approach what their customers need from an ‘inside-out’ perspective. This type of thinking dates back to the acquisition or business development stage. Unfortunately most businesses use this inside-out thinking from the conception stage and it continues during the operations stage.

I was recently reading a great book¹ that discussed the stories of Sony and McCulloch (chainsaw manufacturer). Both companies paid dearly by using an inside-out approach instead of an outside-in approach.

When Sony invented the Beta Max video recorder in 1975, they had a monopoly on personal video recording, and the recorders sold briskly even at a price point of around $2,000. A few years later, JVC introduced the VHS player. At the time of the introduction of the VHS format, Sony executives were unconcerned. The picture quality of the Beta Max format was far superior and they already had a head start on the VHS format as Beta Max was introduced a year earlier. Also the format of the VHS tape was larger and bulkier.

Yet, to the shock of Sony executives, the VHS format started to gain market share. By 1980, the market was split 50/50 and a few years later the Beta Max format was extinct. So why would consumers choose a format that was introduced later, had poorer picture quality and used heavier/bulkier tapes? The reason was that Beta Max tapes only recorded for one hour. The Beta Max was great for videotaping a sitcom episode, but not for videotaping a sporting event. The fact that Sony didn’t understand that consumers wanted a tape recorder that could record three hours, more than they cared about picture quality, cost Sony billions of dollars in profit.

If Sony used an outside-in approach to what their customers wanted, we may have never seen the invention of the VHS video format. The best ways a company can develop an outside-in approach is by developing a ‘customer touch-point map.’ This type of needs assessment is necessary for every type of business, from retailers to manufacturers to facility operators. A customer touch-point map will match up your offering to the needs of your customers.

In the 1960s, McCulloch dominated the marketplace of chainsaw manufacturers. Lumberjacks were the predominant buyer of chainsaws, and the McCulloch chainsaw was THE brand to own. The McCulloch chainsaw was extremely loud and spewed smoke everywhere. But these factors were not of concern to lumberjacks. The problem wasn’t that McCulloch didn’t understand their customers; they didn’t understand who their customers were! McCulloch completely overlooked the growing residential market of homeowners looking to trim a couple of branches and cutting some firewood. In 1963, Homelite entered the chainsaw marketplace with their XL12 saw, the first lightweight chainsaw, weighing just 12 pounds. In just two years, Homelite overtook McCulloch as the dominant chainsaw manufacturer.

My Take: America has changed tremendously over the past 30 years. I consider the three greatest obstacles to growing the game are time, difficulty and money, in that order. Fifty years ago, golf was a game for America’s elite, but not today. Today the game is more accessible to people of all income brackets than ever before. Yet the game is declining!

I think the reason for this decline is that many golf businesses don’t truly understand the needs of their customer. The private club sector is facing enormous pressures today, but most clubs are still operating with the same offerings and policies that they used 20 years ago. The needs of the customer have changed, yet the private club model has not.

The Sony story illustrates that businesses need to use an outside-in approach to understand the needs of their customer. The McCulloch story shows that businesses also need to understand not just the needs of the customers, but who their customers are. It is crucial that these concepts, although extremely basic, are not taken for granted. Both Sony and McCulloch thought they understood their customer and didn’t feel the need to actually ask their customers what they needed. So the question is: “Do you actually know who your customers are and what they need, or do you just think that you know?”
Source Notes
¹Denove, C. & Powers, J. (2006). Satisfaction. New York: Penguin Group.

Read Full Post »

NGF’s 2010 Customer Loyalty Awards

The NGF customer loyalty awards are based on surveys fielded through NGF’s Voice of Golfer Program. Awards are given to facilities that had the highest customer loyalty and most improved customer loyalty. Multi-course operators are also recognized for outstanding customer loyalty across their entire portfolio of properties.

I would like to start by congratulating the management team that set the record in 2009 for having the highest customer loyalty score of all time for any one facility…

 

Honours Golf manages Farmlinks Golf Club. In 2009, Farmlinks broke its own record, of having the highest customer loyalty for any facility measured by the NGF! This is the third consecutive year that Farmlinks has achieved the best customer loyalty for a golf facility within its pricing category.

The NGF multi-course operator award has two categories, management companies and municipal golf system.

For the management company award, the NGF recognizes both:

Both Honours Golf & OB Sports won the award for having the highest customer loyalty across all of their managed properties.

For the municipal golf system award, the NGF recognizes the:

 

The Decatur Park District earned the award attaining the highest customer loyalty for a municipal golf system across all of their facilities.

For facilities within the $40-$70 price range, Sand Creek Station Golf Club in Newton, Kansas, earned the honors of having the best customer loyalty in 2009. Sand Creek Station Golf Club is managed by:

KemperSports also earned the most improved customer loyalty award at Highland Park Country Club (>$70 Peak Green Fee) and at Goose Creek Golf Club ($40-$70).

For facilities under the $40 price-point, Lake Spanaway Golf Course in Tacoma, Washington, attained the best customer loyalty in 2009. Lake Spanaway Golf Course is managed by:

The full list of award-winning courses, municipalities and management companies are:

First Category – Facilities with Highest Customer Loyalty Scores

Premium (>$70) (1)	City	State	Company
FarmLinks Golf Club	Sylacauga	Alabama	Honours Golf	Winner
The Newport Dunes Golf Club	Port Aransas	Texas	KemperSports	Runner-up
Peninsula Golf & Racquet Club	Gulf Shores	Alabama	Honours Golf	Runner-up
The Wilderness at Fortune Bay	Tower	Minnesota	KemperSports	Runner-up
Kelly Plantation Golf Club	Destin	Florida	Honours Golf	Runner-up
Standard ($40-$70)	City	State	Company
Sand Creek Station Golf Club	Newton	Kansas	KemperSports	Winner
Rock Creek Golf Club	Fairhope	Alabama	Honours Golf	Runner-up
Morro Bay Golf Course	Morro Bay	California	County of San Luis Obispo	Runner-up
Tunica National Golf and Tennis	Tunica Resorts	Mississippi	KemperSports	Runner-up
Value (<$40)	City	State	Company
Lake Spanaway Golf Course	Tacoma	Washington	Premier Golf Centers	Winner
West Seattle Golf Course	Seattle	Washington	Premier Golf Centers	Runner-up

Second Category – Facilities with Most Improved Loyalty Scores (2008 to 2009)

Premium (>$70) (1)	City	State	Company
Highland Park Country Club	Highland Park	Illinois	KemperSports	Winner
Peninsula Golf & Racquet Club	Gulf Shores	Alabama	Honours Golf	Runner-up
Longbow Golf Club	Mesa	Arizona	OB Sports	Runner-up
Tijeras Creek Golf Club	Rancho Santa Margarita	California	OB Sports	Runner-up
Standard ($40-$70)	City	State	Company
Goose Creek Golf Club	Leesburg	Virginia	KemperSports	Winner
Falls Road Golf Course	Potomac	Maryland	Montgomery County	Runner-up
Pipestone Golf Course	Miamisburg	Ohio	KemperSports	Runner-up
Northwest Golf Course	Silver Spring	Maryland	Montgomery County	Runner-up

 Third Category – Multi-Course Operators

Management companies:	City	State
Honours Golf	Atlanta	Georgia			Winner
OB Sports	Scottsdale	Arizona			Winner
Municipal Golf Systems:	City	State
Decatur Park District	Decatur	Illinois			Winner
County of San Luis Obispo	San Luis Obispo	California			Runner-up
Baltimore Municipal Golf Corporation	Baltimore	Maryland			Runner-up

(1) Green fees are based on peak season weekend with cart.

The official press release announcing award winners can be found here.

My Take: Congratulations to all facilities that earned recognition from the NGF for customer loyalty in 2009. 2009 was a very challenging year for golf operators, yet the recognized facilities are overcoming market pressures by gaining wallet share, through customer loyalty.

Read Full Post »

Your Infrequent Golfer Plays Frequently – Just Not With You

As we enter a new decade, we face many challenges: a depressed economy, an oversupply of golf courses and stagnant rates of player development. Yet today’s message is one of hope. In the face of all of these challenges, many operators may not recognize that a sizeable opportunity exists – the opportunity to convert your infrequent and regular golfers into diehards.

Through NGF’s Voice of Golfer system, we have been collecting information over the past several years from golfers about the courses that they play. Based on our analysis of over 200,000 surveys, we have found that golfers fall into one of four groups: Diehard, Regular, Infrequent and Transient. Understanding these groups is key to your opportunity to capture more rounds from these customers.

Golfer Segment	Description	Size of segment	Facility Rounds
Diehard	> 50% Wallet Share	22%	62%
Regular	<50% & >25% Wallet Share	23%	21%
Infrequent	<25% Wallet Share	46%	15%
Transient	Play 3 or less market rounds, regardless of wallet share.	9%	2%

Diehard

• The lifeblood of a golf course, they play 31 rounds a year at the subject course and 39 rounds in the market, resulting in the subject course capturing 79% wallet share from these customers.
• Account for a whopping 62% of all rounds at the subject course.
• Represents the greatest risk to a golf course – lose some of these customers and rounds will plummet.
• Since golfers like variety, the opportunity to get more rounds out of these customers is low.

Regular

• These customers know your course well and it’s likely one of their top three courses in the market.
• These customers give you between 25% and 50% of their rounds.
• The opportunity level with these customers is still good: they play on average 17 rounds at other local competing courses.
• 23% of all customers fall into the Regular category.

Infrequent

• The group representing the most opportunity. These customers play 36 market rounds but only 3 at the subject course, resulting in a 10% wallet share and 33 rounds going to competitors.
• The largest group, almost half of the population of customers at a golf course are infrequent.
• Converting just 37 infrequent customers to Diehards would result in an extra 1,000 rounds as Diehards play 27 more rounds than infrequent customers do. This is very attainable: 37 infrequent customers represent only 2.7% of all infrequent customers for a typical course.

Transients

• Customers who played less than four rounds in the local market in the past 12 months.
• Either out-of-towners or very seldom players.
• Very limited opportunity due to the fact they play three or less market rounds.

Below is a table that profiles these different player types for a typical golf course.

Player Type	% of Customers	Avg. Market Rounds	Avg. Wallet Share	Avg. Course Rounds Played Annually	Number of Customers	Number of Rounds	% of Course Rounds
Diehard	22%	38.7	79%	30.5	660	20,130	62%
Regular	23%	27.3	37%	10.0	690	6,900	21%
Infrequent	46%	36.2	10%	3.5	1,380	4,830	15%
Transient (Plays 3 or less market rounds)	9%	1.9	N/A	1.5	270	405	2%

My take: You need to be able to identify and communicate with all groups of your customers. My hunch is that most golf courses have databases that are comprised mostly of their diehards. If you want to grow rounds, it’s critical for you to market to your regular and infrequent customers. The opportunity to communicate with them is there. THEY ARE ALREADY COMING TO YOUR PROPERTY.

The infrequents have the opportunity to deliver many additional rounds to a course. Marketing your course to your regular and infrequent customers is vital as these customers have the capability to become diehards. THEY ARE FREQUENT GOLFERS – JUST NOT WITH YOU.

Read Full Post »

Make a 250K Holiday Bonus Through Improved Word-of-Mouth Referrals

Word-of-Mouth Marketing Impact Continues to Rise

NGF has measured the impact of word-of-mouth referrals regarding the golf courses that golfers play, and the frequency with which they issue referrals (both good & bad) to their friends. During this time we have seen the impact of word-of-mouth referrals continue to increase. Our latest benchmark update on the impact of positive and negative referrals is shown below:

The first box shows the percentage of golfers who have issued at least one positive referral from customers who are promoters (green) or the percentage of customers who have issued at least one negative referral from customers who are detractors over the last year (red). The “Number Referred” box shows the average number of referrals that these customers made in the past year. The ‘Conversion Rate” box shows the percentage of times that these referrals have converted to a new customer gained (green) or lost (red). The last box indicates for every customer at a facility, on average, they will deliver an additional 1.32 new customers per promoter and they will chase away just about 1 customer per detractor.

This latest benchmark update has significant financial ramifications for improved customer loyalty. The chart below shows that now, with a 10 percentage point improvement in customer loyalty for a typical golf course, a facility will increase their total customer worth by $236,755.

However, this bump in customer worth ($220,478) is almost solely attributable to the spike in the positive referrals that these more loyal customers will make. This referral improvement represents 93% of the increased total customer value at this facility.

 You may be asking yourself; “why is the ROI of improved customer loyalty so large?” The reason is due to the enormous referral impact that promoters and detractors have on a golf course. An average golf course has 3,000 customers. Improving customer loyalty by 10 percentage points can be acheived by a:

 5% Gain in Promoters         ► 150 More Promoters

5% Reduction in Detractors  ►  150 Less Detractors

= $220,478 Increase in Customer Worth Through Word-of-Mouth Referrals! 

Read Full Post »

Who Defines Your Brand?

Recently, I talked about an unpleasant round of golf that I had and how the golf course failed in customer service. In the past week I have been thinking a great deal about this golf course which had just reopened after a renovation. I realized that the one constant thread involving every memorable bad experience I have had at a golf course is that it always involved the staff. Without fail, some staff member was always at fault in my memorable bad experience. Even if a golf course is in poor condition, such as just after an aerification, if the staff communicated this to me before I arrived at the course, my expectations are set to see an aerified golf course and I am still capable of being a promoter after that day’s round. If the conditions aren’t communicated before my arrival, that is when there is a problem, because the experience is not going to live up to what the brand promise is of the facility.

But does the marketing that management put forth, define the brand of a course? Well as you can see from my recent bad experience at this course, absolutely not. The brand of any golf course is most defined by the frontline employees at the facility. This is the outside operations staff, the golf shop attendants and the food & beverage staff. Like the Alanis Morissette song goes, isn’t it ironic that these are the lowest paid staff at any facility. These are the people that define your brand, not the General Manager, not the Director of Golf, not the head Chef, and not the Marketing Manager. Management can create the vision of the brand, but it’s up to the frontline staff to execute this vision. This is where most brands fall apart. The best brands are not comprised of just a marketing message; they are brands that have the total alignment of all employees with the customer in pursuit of their brand image. Yet this doesn’t happen for many courses.

Why??? Research suggests that less than one in three employees are truly engaged in their career. Can your course fulfill its brand promise with less than one in three employees engaged?

An engaged employee is one who believes the company cares about them, cares about the customer, and as a result is motivated to go the extra mile for the company and the customer at all times.

Without employee engagement, everything else falls apart. The customer experience does not meet the brand promise, which results in low customer satisfaction and loyalty. The employee sees their job as just that, a job. They are there to collect a paycheck, and are not willing to put forth extra effort to achieve the goals of the brand. The company suffers because employee turnover will always be a problem and they will have challenges in recruiting good talent. They will have very few hires as a result of referrals from existing staff and there may be a great deal of negative word of mouth about working for that company. Also, employees will be more likely to be absent and they will be more likely to file a workers compensation claim.

One statistic that I found interesting was that the electronics retailer Best Buy found that stores which can increase employee engagement by a 10^th of a point (on a five point scale) will realize a $100,000 increase in sales for the year.

Bottom Line: For your course to fulfill its brand promise it all starts with your frontline staff. Disengaged employees will rarely provide a satisfying experience to the customer. A key ingredient of having high customer loyalty is employee engagement. Only when your course has the entire staff working towards the common goal of the brand will you be positioned to have high customer loyalty. We at NGF have spent a great deal of resources in researching what employee engagement is, why it’s important and how it should be measured. If you’re interested in learning more about our research into employee engagement, contact Ben Fowler at 561-354-1628.

Read Full Post »

Happy Thanksgiving

I would like to take the opportunity to just say Thank You to all of the readers of my blog! I hope the posts that I have made have been insightful and hopefully helpful to your operations.

This thanksgiving, I would like to thank everyone who has been reading, linking to, writing about, and passing along my blog. I hope you have enjoyed the past 24 posts, keep reading and tell your friends about this blog.

The bottom line: Happy Thanksgiving!

Read Full Post »

Municipal Golf Course Fails in Customer Service

I would like to take time to tell everyone about my round yesterday at a newly renovated municipal Golf Course. The course has gathered a great deal of media attention related to the reopening as various celebrities were in attendance at the grand reopening.

Like many other golfers, I wanted to see the course after the renovation. Yesterday, I checked in at the pro-shop and the attendant took my money but did not convey the delay that I would soon find at the first tee. I was told to see the starter. Arriving 10 minutes in advance of our tee time, I saw approximately five groups on the tee. We checked in with the starter and I inquired about the delay. The starter’s response was “it’s not my fault.” I went in to the pro-shop seeking a partial refund. The attendant agreed to only charge us the twilight rate, since we wouldn’t be able to get in 18 holes. This, in my mind recovered the service error. However, we went back to the first tee and we found that the starter had given up our spot in line! Needless to say, we were not happy and we told the starter that we were never coming back. A single player that was paired up with our group had a similar situation in which the pro-shop lost his tee time and then, after he had checked in with the starter, the starter forgot that he was there.

So what went wrong? Simply put, the staff was incapable or not interested in serving the customer. This anecdotal story is a perfect example of how a disengaged staff can burn customers and, in the end, profitability. The municipal golf course is getting a lot of new customers that they have not had because of the upgraded facility. Unfortunately for the city, these customers won’t be back if the staff continues to perform their duties in the manner in which they currently are.

To make matters worse, the city has no independent means of actively capturing customer feedback. The city is completely dependent on the information that the management company is providing them. The only way that I could communicate my problems yesterday would be by sending a letter to the city. Instead, I will just tell all of my friends about the poor service that I had. I won’t be back and, based on the damage a negative referral causes, my friends won’t be visiting the course either. It’s too bad for the city that they have no solution to measure the customer experience and provide oversight on the performance of the management company. If they did, they would know they have a problem and could work to resolve their staffing issues. Instead, the tsunami of negative word of mouth will quickly erode the demand for the course and the city will be left with a $140,000 annual debt service payment in its wake.

Read Full Post »

Spend $2,000 Per Customer & Grow Profitability

Forbes Magazine recently had an interview with Simon F. Cooper President of the Ritz-Carlton Hotel Company. In this interview Cooper shares some of the secrets that have propelled Ritz-Carlton to the top of the pack in the luxury hotel business. Click here to read the full interview.

 Here were some of Cooper’s remarks that impressed me:

•  “We entrust every single Ritz-Carlton staff member, without approval from their general manager, to spend up to $2,000 on a guest. And that’s not per year. It’s per incident. The concept is to do something, to create an absolutely wonderful stay for a guest. Significantly, there is no assumption that it’s because there is a problem. It could be that someone finds out it’s a guest birthday, and the next thing you know there’s champagne and cake in a room. A lot of the stuff that crosses my desk is not that they overcame a problem but that they used their $2,000 to create an outstanding experience.”

• When asked how he measures success, Cooper remarked: “On the customer side, Gallup does phone interviews for us, asking two types of questions, functional and emotional. And Gallup has established “indicators,” where this is one question that, if answered as five out of five, indicates that all other questions will be answered positively. Our functional indicator is “The room was clean.” On the emotional side, our indicator is ‘I had a sense of well-being.’ We know we must first pass the functional question before the guest will focus on the emotional question.”

My Take: This interview really shows how the customer-focused culture that Ritz-Carlton has built, did not happen by accident. Ritz-Carlton hires only the best of the best. They are the best company in the nation for employee training (as recognized by Training Magazine) and they understand that a successful corporate culture requires senior leadership to live the values of the organization. Some of the tips Cooper offers may be helpful to your business. The key takeaways are:

• Be selective with your talent acquisition.
  • In today’s current economic climate there is no excuse for hiring poorly.

• Develop superior employee training and organizational communication programs to ensure a consistent guest experience.
  • Use programs like the lineup, a program Ritz-Carlton uses to get everyone on the same page. It’s important to take a little time to make sure every staff member is concentrated on doing the right things every day to wow the guest. For a brand like Ritz-Carlton, consistency is a key element in success. When I think of consistency, I think of Vince Lombardi’s quote: “Winning is not a sometime thing; it’s an all time thing. You don’t win once in a while, you don’t do things right once in a while, you do them right all the time. Winning is habit. Unfortunately, so is losing.”

By hiring the best talent and providing the best training to the superior talent that you have hired, you will be setting yourself up to win.

Read Full Post »