Golf pro warns of Groupon psychology
A golf professional has urged golf clubs not to sell green fees on discount websites as he believes they are damaging the industry.
Sean Mysel, who is also a marketing expert, said websites such as Groupon attract customers who are unlikely to invest additional expenditure in the facility, because of the psychology of the deals. He also said the companies take too large a cut from the arrangements they make with golf clubs.
Speaking exclusively on Golf Club Management’s ‘Marketing Minute’ video platform, Mysel said: “I ran a deal through a discount site and sold 36 lessons in one week. I received a 100 per cent rating for customer satisfaction. You know how many of those people I kept? One. I talked to another ten pros that ran similar deals, and between them they kept two people.
“Research suggests that two-thirds of people that buy deals from discount sites never come back. If someone pays a discount price the first time they use your golf club, do you really expect them to come back and pay a higher price the next time?
“You’re just inviting bargain hunters. They don’t care about your club, service or golf lessons. Besides, if you’re going to work so hard on your golf course, do you really you want to be considered the cheap guy on the block?”
Mysel added that while the psychology of the deals is the biggest issue he has with group discount deals, the maths also works against golf clubs.
“The discount sites normally take 50 per cent right off the back, and then they take 50 per cent of the remaining 50 per cent and all you’re left with is 25 per cent of the original price,” he said.
The warning follows comments made earlier this year by the chairman of the Organisation of Golf and Range Operators, who said that the sale of green fees by internet companies such as Groupon is causing hardship to golf venues.
Colin Jenkins said: “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.
“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.”
And Steve Rumball, the manager of Chalgrave Manor Golf Club in Befordshire, even set up a website in order to compete with Groupon, after he was visited by a sales rep from the company.
“There is a huge variety of non-golf organisations whose sole aim is to make profits on the backs of the golf clubs of this country, without ever having to make any level of investment back into those clubs themselves,” he said.
“With Groupon, we’re not allowed to decide how much to set the deal at they tell us that we are to charge £29 for a two-ball voucher or £54 for a four-ball voucher, which includes coffee and a bacon roll plus 18 holes for all players. These rounds could be played midweek or weekends.
“The end user buys the voucher from Groupon, who keep all the money until it is used at my club. I then have to take the voucher and correctly process it back to Groupon. Two weeks after I’ve provided the food and golf, I get paid 50 per cent of the voucher value from Groupon.
“If the voucher is never redeemed, Groupon keep 100 per cent of the money.”
However, some clubs have used Groupon to increase business in the last year.
Addington Court Golf Club in Surrey secured 184 customers from a recent Groupon coaching deal, and the club claims that 176 of these were retained.
In addition, a spokesman for The Kent and Surrey Golf Club, which has also utilised Groupon, said: “Without these internet deals, we wouldn’t have been as busy. We’ve been 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.”
Josephine Ellis, PR and communications manager, Groupon UK, said: “Groupon is keen to be seen as a core part of a golf club’s marketing mix.
“We are a tried and tested marketing tool that works for businesses wanting to generate footfall and recognition for their brand whilst obtaining a huge amount of advertising for no upfront cost. The Groupon price point is just the trigger to get a new customer through the golf club’s door. Once they are there the golf club owner then has a huge opportunity to provide other products and services, as well as develop a relationship with them for the long-term.”
Discount sites are great if you want bargain shoppers looking to get deep discounts on rates. Not so great if you are looking to attract loyal customers who come back, buy memberships, have parties and so on.
We ARE marketing experts and work almost exclusively in the golf market. In my opinion, there has been a very ill-conceived drive by OGRO and the EGCOA to rubbish online green fee sites when, in fact, they are an extremely powerful way to find new customers and maintain revenue.
Too many golf clubs think their tee times are precious. A tee time is not worth £30 if it’s unsold, it is only ever worth what someone will pay for it.
Sites like Groupon are fraught with dangers, but legitimate tee time sellers like Teetimes.co.uk and Teeofftimes.com should be used as part of any club’s marketing.
After Summer 2012 we believe rounds played are down around 35%. That’s revenue clubs are never going to get back unless they embrace online and use other agents to help sell their own inventory.
Stuart exactly right. Again, you’ll sell product through discount sites, but you’re going to need add on sales to make up the difference. All in all I would rather sell to less people who will buy additional items and will come back than more people who pay less and go elsewhere.
From a marketing point of view, Groupon probably takes your product to new consumers, but it diminishes the value of your product in the eyes of these consumers. There is an impact on existing consumers, such as loyal members who weigh up what their paying compared with Groupon giveaway prices. In its favour, however, those consumers are likely to buy food and drink, so it’s more about the overall spend in the club, not just the the amount of money the club gets per round from Groupon. A restauranteur that I know calls them ‘Groupon groupies’ who just use the vouchers to flit from one restaurant to another. It doesn’t generate loyalty or return visits at full price. I’m inclined to think it could be a short term gain but long term pain.
Mork & Mindy was a great…..hold on..don’t get mad bro….American show!
Mork & Mindy was a good show !!!!
We sold 1760 vouchers travel zoo in 1 week and all are spending well .
is this is a sketch from Harry enfield show the fast show
I am a golf director and pga pro and a marketing mentor advisor .
The theory that groupons and travel zoo customers do not do extra spend is down to the venue staff and management . i consult with 30 other clubs where i can assure the average spend is £25 extra per voucher .
Membership is the least likely to spend so we should all think in that direction unless of course you business is mainly members .
And the hits keep on coming for these guys: http://www.theatlanticwire.com/business/2012/11/prospect-groupons-ceo-firing-himself-thrills-investors/59430/
I agree stay clear. I think the people that use Groupon’s just want a cheap price and move on to the next cheap offer, they are not really likely to come back to you at FULL PRICE. Marcus, I like your thinking about collecting customer details but as long as Groupon golf offers abound your details from these customers wont be worth much.
i would whole heartedly with your views on this, however we have run dfeals with groupon and living social. What we got out of this was exposure to a whole new client base. We have made a conscious decision not to run any more deals with these sites. We made sure we got as many contact details as possible and its now up to us how to get these customers back, and not at silly discounted prices. I would agree for clubs to steer clear as the market has now changed for these sites.
Marcus,
That’s about the best you could have done with that deal. I’ve done a ton of research on pricing and psychology and here’s what I’ve come away with: the first time you buy something, the price for that first bit of exposure shapes how you see that experience. People who buy something that’s “more expensive” in studies got more enjoyment out of it. Ironically, vendors also had fewer returns with higher end items. You’re just much better off either getting someone to consult with you on a more personal level for marketing or doing it yourself.