The Pellucid Perspective - May 2014 - (Page 2)

GOLF PARTICIPATION Why defectors are the key to stabilizing golf 's participation decline By Jim Koppenhaver B usiness associate Stuart Lindsay and I were having a conversation recently regarding the importance for our Sharper Edge Marketing clients to send out monthly email invites to their "defectors." As we talked through the resistance we occasionally encounter and why the upside far outweighs the downside, it made me think about defectors at the industry level and their role in the current participation slide we're experiencing. Along the way it struck me that, while stemming defection won't make our sport more appealing to the currently uninterested, non-exposed general population, it does hold the key to stopping the downward drift of golfers from nearly 30M in 2002 to 24M in 2012. Before I get ahead of myself, let me define the term "defector." It was actually coined by Stuart when we developed the Customer Franchise Analysis, in which we mine Point-of-Sale (PoS) data at the facility level looking for golfers who have previously played the course but not been back recently. The (liberal) definition we've adopted over the years was that a player playing the facility at least once in the previous calendar year who had not played that facility in the current calendar year is considered a defector and targeted for email communications. In facility analysis, there can be three potential reasons for a "defection": (1) The player is still interested in the facility, they just haven't put it in their current year rotation yet; (2) The player is playing at other facilities but has dropped this facility from their rotation; or (3) The player has dropped the game and isn't playing anywhere. We don't try to ascertain which of these has occurred, we simply work with our facility clients to identify the "defectors" and send them a series of targeted messages and offers over time to re-engage them. The conversation which spawned my thinking on this topic was an exchange with one of our facilities which was debating the merit of defector messaging because they had gotten complaints from a small number of regular players who had received "defector" offers. The facility managers were concerned about the negative customer relations to which we responded, "You have over 1,000 defectors from last year, we've sent 2 waves of emails and gotten roughly 100 of those to come back and you want to abandon that because 4-6 people complained about being inaccurately messaged as "We want you back!"? We finally convinced them that the upside/downside of that equation was pretty solidly economically in their favor and they're once again sending defector messages. (I'll bet my next paycheck they'll thank us at the end of the season when we add up the number of returning golfers vs. however many stopped playing the course due to their bruised sensibilities). This got me thinking about defectors at the industry level. I'm on record multiple times since 2001 saying that we don't necessarily have an "attraction problem," what we really have is a "retention problem." Case in point, one of the quantitative slides in our 2013 State of the Industry presentation shows datapoints from 2001, 2009 and 2012 outlining that in those years we "attracted" 3.7M new players to the sport annually. Further decomposition of those numbers in '09 and '12 showed that of the new players, actually about half each year were returning former golfers vs. a similar number of "non-exposed" newcomers. In other words, against an average base from '09-'12 of 25M golfers we attracted 15% of our current base size (if you include the former golfers) or 7.5% of our current base (just counting non-exposeds). Not a shabby outcome. It should also be said, lest people attribute that to the "success" of grow-the-game initiatives, that this number has been relatively stable over time from the inception of Golf 20/20 et al up to the present day. On the other side of the coin, that same chart in the SoI shows that the "defectors" from the sport in the '01, '09 and '12 periods were 5M, 5M and 4M respectively. This, when you put it under a microscope and quantify it, is the heart of golf 's consumer base decline dilemma. Here's the rub however. While attracting new golfers is something that you can undertake at an industry level via general media, PR campaigns, PGA TOUR broadcasts (remember they claim to have 100M+ "fans" which means, by subtraction, there are 75M+ people watching golf that don't play, but if you believe that fan number, I've got a bridge I'd like to sell you), reengaging defectors is a whole different challenge. In facility analysis, there can be three potential reasons for a "defection": (1) The player is still interested in the facility, they just haven't put it in their current year rotation yet; (2) The player is playing at other facilities but has dropped this facility from their rotation; or (3) The player has dropped the game and isn't playing anywhere. 2 The Pellucid PersPecTive May 2014

Table of Contents for the Digital Edition of The Pellucid Perspective - May 2014

TOC
Why defectors are the key to stabilizing golf's participation decline
OpenTee opens our golf season
PGA Junior League helping golf catch up
Powering up long-term savings
Tom Abts: It's always fun at the Run
April '14 golf weather impact: Two (in a row) positive months
Dallas, TX: 'Big D' indeed, relatively speaking
ClubCorp acquires TPC properties in Michigan and North Carolina
It ain't over 'til it's over

The Pellucid Perspective - May 2014