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By Todd Anderson President, MPGMA
COURSE ACCESS & PRICING POLICIES
For a course to succeed in the ever-changing golf market, one must revisit its course access/pricing policies for relevance . I have previously written articles on revenue management and variable pricing and have found that many operators have a great fear of discounting. I do however, believe in selective variable pricing, but not in across the board "blanket discounts". In addition, there are ways to capture additional market share and revenues by policy changes that wouldn't be considered traditional discounting.
An example of reviewing and changing an access/pricing policy was for our two executive courses. The play at the courses isn't near capacity. In addition, the clientele of these courses is somewhat fickle in regards to playing in less than perfect weather, making advance tee times, etc. We offer a Patron Card to Edina residents valid for both the regulation courses and executive courses. We also offer an Executive Course Patron Card valid only for the two executive courses. The Patron Card holders can make reservations further in advance in addition to a discount on greens fees.
This year we implemented a Non-Resident Executive Course Patron Card. The cost is $35.00 (versus $25.00 for residents). The Patron rate is $10.00 versus $13.00 for a Non-Patron, a discount of $3.00 per round (the Patron discount is the same). Although the customer perceives this as a discount from the start, they are actually paying the equivalent of the Non-Patron rate for the first 12 rounds ($35.00 ÷ $3.00 = 11.6).
The number of resident Executive Course Patron Cards sold in previous years had remained relatively flat. We implemented this policy without advertising, basically only using in-house promotion. The results have been impressive. The increase in cards sold this year will be up in the 175% range. The benefits include nearly $10,000.00 in up-front revenues through card sales, increased loyalty to the facility resulting in increased rounds (it is still too early to measure the true effect), and more advance tee times.
We have had virtually no complaints from resident Patron Card holders. It appears that they realize that we need a certain level of play to keep their cost down.
Another policy change that we made in 2006 was to sell single or "half" of riding carts. Our rounds for the previous year were up about 1%, while cart revenues were up 11%. Although it is difficult to measure, I feel that the increase was in part due to the policy change.
I realize that these scenarios wouldn't apply to all courses, but managers should always be looking for solutions for improving revenue.
From the Editor...This is the eighth in a series of advanced management strategies written by Todd Anderson. Each issue of MPGMA News & Views will offer another contribution. Copies of previous articles are available from the MPGMA Office at 952-512-0559