How barter agreement language could be sinking your profits
As the golf technology landscape has changed, companies like GolfNow “GN” and EzLinks “EZ” began to offer more and more tools to golf course operators. These tools consisted of items like hardware, point of sales systems, marketing tools, websites, reservation centers, email tools, and of course distribution on third-party platforms. In exchange for these tools, GolfNow and EzLinks asked for more trade. In addition, these technology relationships were outlined with a formal agreement by the parties.
Below is an overview of key areas that every operator should understand when entering into a barter agreement. These are the areas that could have an immense impact on your profitability.
Barter/Trade Time(s) Defined:
The generally understood and communicated barter arrangement that is sold in the marketplace is one, two, or three tee times per day based on the services you elect. Based on that statement, an assumption may be made that this inventory is expiring. Meaning if a tee time is not sold by the bartering company the inventory is lost. What operators will generally find here is the language that defines a barter tee time as (4) individual rounds. If this language exists it converts 1x, 2x, or 3x tee times per day that may expire into (120x, 240x, or 360x) rounds available per month.
This language has ensured the bartering tee time company protection that they will have every opportunity to fully liquidate their trade.
This language often gives GolfNow the ability to roll trade times that do not sell from one day to another.
Online Rate Parity:
Online rate parity is a requirement of many barter agreements. This language ensures that a club’s website online rate is never lower than what is being charged on a distribution platform like golfnow.com. This parity requires a club to maintain online rate parity but does not require a third-party platform to do the same with its bartered tee times. This ensures the lowest rate a customer will find to play your facility will always exist on golfnow.com and never exist on your club website. It is a powerful tool to own the lowest rate in the market and it is the reason GolfNow has grown such a large database of loyal golfers.
Barter technology companies like Golfnow will either give a booking engine complimentary or require a booking engine to be placed on a club website. If for instance, a golf course has a GN hosted website and electronic tee sheet then you likely have a GN booking engine. GolfNow has access to your customer information via these booking engines. Golf Courses likely can access the information via the GolfNow Central marketing tool, and the email data is exportable, but only if they have opted in to receive communication from the club.
If you have a GN booking engine on your golf course website and you are listing “Hot Deals” on your club website then you should address immediately. If a customer visits your website to book a tee time they should not have an opportunity to purchase a tee time that only benefits a third party.
Offering your lowest rate on your golf course website is a great practice to increase traffic and key to direct consumer relationships, but only if that price point is not a trade time.
I find that most operators overlook the option to export the data. You will need to login to GolfNow central, go to reports, click on “export data” and you can download the opted in golfer data. This data will pertain to paying customers and not the trade rounds information. At the very least it is giving you a centralized location to collect the data you can from GN.
Booking fees are charged on golfnow.com which likely means GN is keeping 100% of these booking fees unless there is another unknown arrangement. GN encourages golf courses to add booking fees on golf course websites where GN booking engines exist. GN is likely offering degrees of revenue share to clubs for booking fees on golf course websites. Some of the fees go to the club and some go to GN.
Technology barter deals typically require the signing of agreements. These agreements typically have renewal language. It is important to know the parameters by which you need to communicate if you do plan to terminate any agreement. The auto-renewal has caught many a golf course in the past and is one of the tactics to block a club from leaving a technology relationship.
In summary, many of the areas above can be impacted during negotiations. However, as a stand-alone club, it will be difficult to negotiate. The information above largely summarizes what a relationship and agreement may look like to list your inventory on platforms such as golfnow.com. To be able to effectively understand your exposure you need to understand these components. However, no matter what you agree to or negotiate you will always find strong resistance if you attempt to mitigate the collection of customer data or third-party platforms opportunity to own the lowest price.
- To take your golf back as it relates to this article these steps should be taken:
- Understand exactly how much trade and more importantly trade liquidating flexibility you are giving up.
- Avoid online rate parity.
- Understand the mechanics of who owns the customer data that is booked through your online booking engine.
- Export the data you can from GolfNow or any other third-party platform.
- Offer your lowest price on your club website and make sure it is not a trade time! Preferably on a booking engine that you control the data.
- If you are going to use booking fees make sure the booking fees on your course website are lower then booking fees on third-party platforms.
- Sign only agreements that have flexible options for cancelling and eliminate auto-renewals if forced into an agreement.