John Brown, CEO of Brown Golf Management has been listed as one of “golf’s up & coming superstars”.
Check out the full article here →.
Check out the full article here →.
The “Taking Your Golf Back Series” is a six-part article series that was delivered throughout 2020 by John Brown, CEO of Brown Golf. These articles are aimed at educating the market on the key fundamentals of returning your golfer to direct booking channels and eliminating toxic barter and third-party channel relationships which create competitive displacement.
The series of articles navigates a multitude of topics on how the industry became engulfed in the barter model and provides insights on how your club can reclaim its rightful position as the direct contact to YOUR customer.
If you have ever questioned barter, third party tee time distribution or your technology provider, than you owe it to yourself and your golf club to read through the articles in this series.
The summary below highlights, just a few, of the key takeaways from each article in this series. The articles provide greater detail into each subject and if you are interested in learning more, please visit www.BrownGolfManagement.com/news to read any of the individual articles.
Taking Our Golf Back – Article #1: Introduction
Taking Our Golf Back – Article #2: Barter and Today’s Current Marketplace
Taking Our Golf Back – Article #3: Giving Away the Keys to Your Golf Course Inventory
Taking Our Golf Back – Article #4: How Barter Agreement Language Could Be Sinking Your Profits
Article provides overview of key terms and concepts in a barter relationship:
Taking Our Golf Back – Article #5: GolfNow is Cable, and it is Time to Stream
Taking Our Golf Back – Article #6: GolfNow vs. Golf Course and the Battle for Market Share and Attention
In closing, if you are a golf course owner or operator who believes in the principals of this series and is looking for a viable solution to transition to a better business model please contact us directly.
John Brown – CEO, Brown Golf
firstname.lastname@example.org – 717.439.2080
In 2019, GolfNow was affiliated with more than 7,000 golf courses. Ezlinks distribution platform teeoff.com was affiliated with approximately 3,000 courses. GolfNow facilitated worldwide some 17m rounds of golf in 2019. This number is up from 3.8m rounds of golf in 2009. In December of 2019, GolfNow acquired EzLinks and if you visit golfnow.com today the number of golf courses they work with currently is 9,000. How many rounds are possible in 2020 by GolfNow with this major acquisition?
Article about 2009 GolfNow Rounds:
Article about GolfNow acquisition of Ezlinks and 2018 & 2019 data:
Why would anyone critique a business that is delivering that volume of golf rounds to golf courses? If you are receiving reports that GN rounds are growing at your facility level, that is because in all likelihood they are. Growing from 3.8m rounds to 17m rounds in ten years is no small task. Their data says they are growing, and they are. Are they helping your business?
There is a major statistical flaw with any assumption this growth has helped our industry. Public golf rounds are not growing. Per Pellucid Corporation reporting (https://www.pellucidcorp.com/), public rounds dropped from 372.2M in 2009 to only 344.2M in 2019 in the United States. It is hard to know exactly how many of those 17m rounds were sold in the United States. However, by visiting golfnow.com you can see the vast majority of the courses featured are in the United States. How is it that GolfNow is growing its market share in the face of shrinking public golf rounds? Who is being impacted? There can only be one answer, the golf course owners and operators are being impacted. One scenario, that can explain what is happening in our industry is competitive displacement.
“What is competitive displacement?”
“Competitive displacement is the act of convincing companies to make a shift from their existing solutions to yours.
Competitive displacement businesses capitalize on the mistakes, mishaps, and missed opportunities of their competitors.
Organizations utilize competitive marketing tactics and campaigns to shift loyalty.”
For more information on competitive displacement please see the article below which describes this concept in detail.
The golf industry has been historically poor at collecting golfer data and marketing to their customer. Through a combination of national network distribution, acquisition, and owning the lowest rate, one company GolfNow has managed to capture 3.5M unique worldwide users that booked 17m rounds. The right questions to ask are as follows:
Is this third-party bringing in new golfers?
Is this third-party making golfers play more often?
If the answer is yes, don’t you think total rounds would be growing?
If rounds are not growing, and our market share is shrinking, are we simply just displacing our organic customers into third party channels?
How does competitive displacement occur in the golf space? Anytime a club loses one of the following:
1.) 100% ownership of its customer data
2.) 100% assurance their customers will not be remarketed to their competitors
a. Jay Karen, President of the NGCOA has posted two articles that clearly outline the marketing efforts which draw your customers away from your course and to GN.
3.) 100% control and ownership of the lowest price in the market
Then, inevitably in time, the displacement of your customers will occur. Your customer’s data will be in someone else’s hands, they will re-market to those customers to advance their business, and they will achieve pricing loyalty by offering the lowest price. Any club that barters is subscribing to competitive displacement in the golf space. In a season, perhaps the impact is minimal, but over the course of many years, you are subscribing to a weaker business model.
So here is a scenario, every golf course owner in the country is brought to a meeting in 2009. We are told the following facts.
1.) Public Golf Rounds will drop in the next ten years from 372.2m rounds to 342.2m rounds in the United States.
2.) Approximately 800 Golf Courses will close in the next ten years in the United States.
3.) Through third party distribution, you will have access to 3.5M unique golfers who will book more than 17M rounds of golf worldwide. However, your market share will not increase. In fact, it will decrease.
Would the owners and operators sign up for such a Macroeconomic impact? I doubt yes, but this is the world we live in right now. When you give your data away, your lowest price, and when your historical market share is shrinking then it is time to take your golf back!
CAMP HILL, Pa.—Brown Golf Management will partner with the University of Maryland Eastern Shore (UMES) starting this fall to provide its Professional Golf Management (PGM) program students with real-world industry resources. This partnership (expands) career development opportunities for PGM students and elevates the program’s ability to prepare its future golf industry leaders.
Brown Golf Management will provide students with an inside look into golf club operations. They will learn about profitability through live financial reporting, budget development, schedule-leasing, and expense management tactics. Other topics will include advanced tee sheet management strategies and profitability analysis crucial to the principals of golf course management.
Students will have access to the latest technology and software used in the golf industry. This experience will provide aspiring leaders with insight into how technology impacts a golf club’s ability to create effective strategies that in turn drive profitability.
“This partnership is about providing an opportunity to upcoming golf management professionals,” said John Brown, CEO of Brown Golf Management. “It’s a chance for a rigid, stagnant business with a history of non-inclusion to advance by building opportunity channels for students of every background and ethnicity. We are excited to work with aspiring professionals that have dedicated themselves to learning our business and will be innovative future leaders.”
While access to Brown Golf’s industry professionals and management resources will aid in student development, another benefit is career opportunities for UMES graduates. Brown Golf will conduct mock interview sessions and help students develop cover letters and resumes to improve their chances of landing their first position in the golf industry. Internship and full-time positions will be available at Brown Golf’s network of facilities and will be posted to the university’s job boards for PGM students.
To learn more about Brown Golf Management, visit https://browngolfmanagement.com.
University of Maryland Eastern Shore (UMES) is a public historically black land-grant university in Princess Anne, Maryland. It is part of the University System of Maryland. UMES is a Carnegie Classification high research activity university. Committed to providing high-quality programs in an ethnically diverse environment, the University prepares students who will serve and shape the global economy. UMES is primarily a residential University with a mission focused on learning, discovery, and engagement.
The PGM program at UMES prepares students for a career in the golf industry. The PGM program attracts and educates bright, highly motivated women and men to service all aspects of this developing industry while working toward membership in the Professional Golfers’ Association of America.
To learn more about the University of Maryland Eastern Shore’s Professional Golf Management Program, visit their website at https://www.umes.edu/pgm/
Original Article by Harvey Silverman, Silverback Marketing
An old boss once told me, “If you hear the same rumor three times, it’s a fact.” Despite my former boss being a nutbag, I’ve experienced his statement proven true more than once.
During the months I spent researching, interviewing, compiling, and writing the NGCOA’s “Beware of Barter” document, I heard more than three times that EZLinks was for sale and would be acquired by GOLFNOW. But it didn’t become a fact, in November 2019, until we completed the document and sent it for legal review. The Conclusion opened with an added message about the acquisition along with, “The material in this document stands as is with the caveat that over time, things may change. They typically do when two dominant forces merge. The NGCOA will continue to remain vigilant to any changes that affect the businesses and livelihoods of our members and golf course operators across the country.”
Andre Barlow is the attorney who reviewed “Beware of Barter” for NGCOA. Barlow is a partner at Doyle Barlow & Mazard, PLCC and a former trial attorney with the Antitrust Division of the U.S. Department of Justice. The NGCOA and the USA Tee Time Coalition consults with attorneys who specialize in antitrust matters to be sure they are not overstepping their legal bounds in discouraging certain behaviors or doing business with certain companies or avoiding collusion. Boycotts or collusion by associations is an avoidable sin with appropriate legal advice.
Barlow was intrigued by GOLFNOW’s acquisition of EZLinks and walked the document over to people he knows at the DOJ. The result was an invitation to Jay Karen and Jared Williams for a preliminary discussion in Washington, D.C., with the DOJ. It so happened to coincide with the 2020 NGCOA Golf Business Conference and the PGA Merchandise Show, but when the DOJ summons you, I don’t think “Not now, we’re busy” is an acceptable response. And so, the meeting ensued.
The NGCOA has long had issues with GOLFNOW’s business practices, and behaviors reported to it by members and competitors. Fueling NGCOA’s concern of possible monopolistic aspirations was a public statement by GOLFNOW executive Jeff Foster that “we want to facilitate the booking of every round, everywhere.” (Golfweek, January 25, 2016).
The acquisition of EZLinks and, with it, Teeoff.com by NBC Sports Group moved NGCOA’s concerns to a new level – GOLFNOW’s primary competitor was no longer. Jay Karen, the NGCOA CEO, cites a call with EZLinks’ leadership the day of the announcement where he learned that the acquisition had “flew through” the government’s merger approval process, and “they asked us hardly any questions.” And so began a series of meetings with Barlow and high-level leadership at DOJ.
Attorney Barlow published an article on June 9 of this year, expressing his opinion that “NBC Sports’ purchase of EZLinks deserves antitrust scrutiny.” Barlow makes the case that “few missions are as important to the U.S. antitrust agencies as preventing anti-competitive mergers,” but that some might evade their radar. And despite a merger having already closed, “the antitrust agencies have jurisdiction to challenge any transaction that may substantially lessen competition,” and unwinding those already consummated. He cites several cases proving this point.
Barlow insists the GOLFNOW/EZLinks merger should be on the antirust radar with several key points:
Colleagues have asked whether it’s the NGCOA’s place to get involved in a potential antitrust case involving two of golf’s largest technology providers. Jay Karen responded passionately (Note: I invited GOLFNOW to comment on Barlow’s article, and they declined).
Most troubling to Karen is that “the tee time distributors and marketers controlling most of the software market is the most troubling structural aspect of the marketplace. GOLFNOW has enough control of the inventory to prevent their client golf courses from distributing their tee times on sites that GOLFNOW would deem competitive. Conversely, if a competing or new online tee time agency desired access to the golf courses, GOLFNOW can lock them out or control the economic conditions for that to happen. That kind of control of a golf course’s inventory, let alone a majority of the industry’s tee time inventory, is too dangerous to overlook. I would like to see the federal government look into decoupling the software platforms from the distribution platforms as a structural remedy.”
Karen continues, “Let the distribution companies compete, let the software companies compete, and let there be more open connectivity among all systems. We are in favor of whatever allows golf courses more choice and fewer restrictions by their software and distributor vendors. In the end, the golf course should be in complete charge of their rates and where their tee times are sold. In that regard, the current marketplace is broken, and the by-far largest player seems to have stretched beyond legal bounds.”
The courts consider two aspects in antitrust cases – structural and behavioral. A structural decision might force GOLFNOW to divest of its acquisition or somehow split it. A behavioral decision would force the combined company to follow a prescribed set of conditions like DOJ did with the Ticketmaster and LiveNation online ticketing case.
Will it happen? The antitrust agencies, DOJ and FTC, have to make the first move. Should it happen? If this article starts the debate, and NGCOA has stated its case, we’ll hopefully soon hear the other side of the argument. A judgment awaits from both the golf industry and maybe the courts.
Harvey Silverman is the proprietor of his marketing consultancy, Silverback Golf Marketing, and the co-founder of Quick.golf, golf’s only pay-by-hole app. Harvey authored NGCOA’s “Beware of Barter” document and has spoken at their Golf Business Conferences and Golf Business TechCon. He writes a monthly article for the Pellucid Perspective and occasionally displays his less than stellar skills on a golf course.
Original Article Written By Jay Karen, CEO | National Golf Course Owners Association
While there are promising indicators and progressive things happening in golf that cause me to be quite bullish about the long term prospects of our industry, the business of running golf courses in America – by and large – has been a slog for the past 15 years. The supply and demand curve has been moving in the wrong direction since before the Great Recession. Most experts agree the number of course closures will continue to far outpace course openings for the next decade. If you compare the average price of a round of golf ($38 according to We Are Golf) to the change in Consumer Price Index, golf is arguably cheaper than it has ever been. Pellucid Corp reports that 39% of golf courses in America operate in the red. Despite the challenges, I do not believe there is a macro, existential crisis (there are over 14,000 golf courses generating an $84B impact on the American economy). However, this is our current climate. It’s still a great business, but it is hard to succeed.
While the economic pie of rounds and revenue seems to shrink, one can’t help but notice the prosperous rise of Online Tee Time Agencies (OTTAs). With too many courses and not enough golf being played, the supply and demand plight naturally causes downward pressure on the price of golf, thereby creating conditions incredibly challenging for the typical golf course operator. Golfers can find affordable golf in every market in the United States. It’s a buyer’s market, plain and simple.
The OTTAs in golf claim to serve both the supply side (primarily through technology and marketing services to golf courses) and the demand side (primarily through easy booking of tee times for golfers). However, from my observation, their value is heavily weighted towards the needs and desires of the golfers – the aggregation of tee time options at multiple golf courses, all on one screen. I don’t believe golf courses need the marketing services of OTTAs to meet the natural demand for golf in our marketplace, nor do I think they stimulate incremental demand for golf. But that’s me. Unfortunately, despite the positive contributions to the game of golf from the parent companies and organizations affiliated with the OTTAs, the dominating push by the OTTAs to sell the lowest priced tee times, which conditions golfers to favor those times, is an albatross around the necks of the golf courses who provide the inventory.
If you are among the audience or followers of NBC, NBC Sports or the Golf Channel, you’ve likely seen the recent launch of the new GOLFPASS program. GOLFPASS is Golf Channel’s investment in the subscription model of services for their golfing customers. Leveraging the celebrity of Rory McElroy to give it serious fuel, GOLFPASS offers golfers one free round of golf every month, access to subscriber-only golf content, 400+ hours of instruction, travel credit at golf resorts, and more – all for as little as $99 for an annual subscription, or $9.99 per month.
As a subscription service, there’s actually a lot of value packed into GOLFPASS. It reminds me of Amazon Prime. For the low fee of $12.99 per month, Prime subscribers get free, two-day shipping on over 100 million items, exclusive access to favorite moves and shows, unlimited access to millions of songs, unlimited photo storage, free online gaming, and more. Compared to when free shipping was the only benefit, it’s easy to see why consumers are so attracted to the value package. Looking at GOLFPASS, there’s a lot of value packed into the offer. It will no doubt increase engagement in golf, and that is a good thing for all of us concerned about retaining interest and involvement in the golf economy. Although GOLFPASS marketing doesn’t appear to single out the free round as the primary feature (as free shipping has been the primary feature of Amazon Prime since the beginning), I cannot help but be fixated on the free golf. But I am biased, because I represent the supply side of the industry – the golf courses around the United States. Free golf is the fatal flaw for all the golf courses now inextricably and unwittingly involved in the program.
Let’s attempt to follow the dollars and see what is happening. Joe Mulligan gives his Visa card number to the Golf Channel as a new GOLFPASS subscriber, and the Golf Channel bank account increases by $10 per month – automatically (and exponentially, of course) – while Joe likely forgets over the next four years that his card is even being charged. Isn’t that the little secret of the subscription model – that the seller benefits from the “breakage”? Meaning, if Joe doesn’t actually – or frequently – use the benefits being offered, the Golf Channel still gets Joe’s regular monthly payment. Many companies – even golf courses themselves – are moving in this direction. Nevertheless, score one for the Golf Channel!
Joe gets his first monthly promo code from GolfNow and goes to GolfNow.com to book his free round of golf in the Orlando market, and claims his “Hot Deal” (free round promo codes can only be used on the bartered tee times, and only Mon-Thur after 12:00 pm). If the Golf Channel is lucky enough, Joe got his buddies to sign up for GOLFPASS, and they all sign up for the 12:08 p.m. tee time on Monday. Joe and his buddies enjoy their round of “free” golf, go home, and hope to do it again next month after GolfNow emails the next promo code. Score one for Joe and his buddies!
See how the monthly promo code reduced the price from $38 to $0. Price integrity be damned!
While incurring the costs associated with Joe’s round of golf, the golf course received no income and attracted customers whose primary motivation was to pay as little as possible. One can make an argument that the golf course scored by receiving some marketing and technology benefits (among other possibilities) from GolfNow in exchange for no-revenue, bartered tee times. And some might argue that Joe and his buddies are going to buy some hot dogs and beer while on property. But I think that is a dubious position (more on that later). So for argument’s sake, I say the golf course scored zero.
No matter the deal or the no deal between golf courses and GolfNow, the last thing our industry needs is major corporate media promoting free golf to the masses on the back of golf course owners and operators. OTTAs are already adept at peddling rounds of golf at 20-80% off the rates of adjacent tee times on the tee sheet. Do golfers now need free golf in order to play? Is it hyperbolic to think the only natural progression after free is that golf courses will one day have to pay golfers to play their courses?
GolfNow’s first Tweet after the media launch of GOLFPASS. Notice the emphasis on FREE golf.
If GOLFPASS is wildly successful, it could very well mean millions of rounds of free golf being played all across the land, while golf courses continue to bear the burden of the significant fixed and variable costs needed to keep the golf courses running. The shrinking effect on the bottom line will be harmful at best and devastating at worst, leading to greater struggles and possibly more closures of good golf courses. How would this ultimately good for the golfer? How is this good for anyone in golf, including employees that work at golf courses and vendors that partner with golf courses? What about the housing development adjacent to those courses now offering free golf? Are they looking forward to viewing fallow land out their back windows?
We cannot separate the danger of free golf from the fact that over 6,000 golf courses willingly provide the bartered inventory to allow this to happen. Barter itself is not an evil concept. As a method of exchange, it dates back to ancient times. If bartering involves the fair trading of goods or services between two willing parties receiving comparable value in the exchange, there is no problem. However, a “haze of ambiguous value” clouds the entire barter economy in golf, thereby preventing course operators from truly understanding what they are giving up in this exchange.
OTTAs that offer barter to golf courses as a compensation option are not evil per se. OTTAs, like GolfNow, capitalized on an incredibly clever business concept that was once much more discreet in nature. Before the meteoric rise of GolfNow as we know it today, the lowest-demand tee times were once peddled only through vehicles like email, where a golfer couldn’t easily compare the discounted rounds against all the other rounds in an aggregated view.
When the bartered round of golf was made the centerpiece of the relationship in an online environment, which included handing over partial or total control of pricing to the OTTAs for those rounds of golf, the OTTAs found themselves sitting on a treasure trove of inventory over which they had partial or total price control (certainly the fatal flaw operators have made over the years in these dealings). The decade around the Great Recession only made the conditions more conducive to build this treasure trove, because they were offering services for no cash-out-of-pocket. There might be nothing more seductive to a cash-poor business that runs below 50% occupancy than free technology and marketing. Thus, the permeation and influence of the OTTAs spread like a viral infection in our weakest moments. Some argue that the bartered inventory did nothing more than create new, virtual golf courses that compete directly against the very ones that supply them with their inventory. Research from the Golf USA Tee Time Coalition reveals that 47% of golf courses participating on OTTAs believe they are in direct competition with their OTTAs (an additional 26% are on the fence). Unfortunately, Coalition data also reveals that golf courses that barter don’t appear to be ready to give it up. While more than half of golf courses do not agree that barter should be a payment option in our industry, 86% of those who barter would prefer it to continue. These relationships are complicated, to say the least, and wrangling back control of pricing and inventory is going to be its own slog.
The ORCA Report, which has approximately 700 public golf courses sharing performance data every month, yields one of the most important data points in our industry and helps to remove the haze: Barter Opportunity Cost. BOC indicates what income a golf course might expect to earn had they sold those bartered rounds on their own (at an average price based on the price sold of adjacent tee times). Early insight into ORCA data coming from nearly 400 golf courses engaging in barter reveals an average of $37,000 in BOC for 2018. I recognize that golf courses participating in barter might not sell all of those tee times on their own, and OTTAs are not getting full price for those rounds. But this certainly gives you an indication of what the recapture could be if golf courses employed better marketing and price controls.
One real course example of Barter Opportunity Cost in 2018 – nearly $90K.
OTTAs do anything they can to monetize those bartered rounds, including the use of discount codes, gift cards, and now subscription. They’ve moved from gluttony (who remembers the rap video at the GolfNow sales meeting about selling boatloads of trade time?) to desperation (free): both deadly sins in business. All this on the backs of golf course owners and operators. I am gravely concerned that price abdication by golf courses and the prolific offering of heavily-discounted and free golf will grease the already-slippery slope towards struggle and possibly more course failure. What the golf industry desperately needs are these OTTAs to emulate the restaurant industry’s OpenTable, which facilitates no discounts or free meals. The OTTAs should have no influence on price. Let the courses compete on their own merits, and just give the world frictionless, beautiful aggregation and ease of booking – and get out of the way.
Each bartered round sold that strengthens the OTTA simultaneously weakens the golf course. The parasite-host relationship is not symbiotic.
Later this season, NGCOA will publish a guide for course operators interested in understanding the details of barter. This resource will take a comprehensive look at the economics of barter in our industry, services offered in exchange for barter, prices that can be paid for such services, tips for negotiating healthy contracts, and more tools and knowledge to help course operators calculate the cost-benefit equation. The manifestation of GOLFPASS and marketing of free golf should cause course operators everywhere to take a fresh look at their dealings. At the very least, explore what the pay-to-play options are, and calculate your BOC. Talk with your neighbors. Have you gone on and off barter and have a positive story to tell? Please share it with us. Course owners and operators: we have to stop whistling past the graveyard and end this race to the bottom.
Chief Executive Officer
National Golf Course Owners Association
We are four articles into our “Taking Our Golf Back” series. The articles to date are largely geared toward educating the market about the detrimental nature of barter golf. There is an undercurrent in the industry that is tired of allowing third-party platforms like golfnow.com and teeoff.com the ability to own their lowest price, own their customer data, and then remarket to their competitors. The future of online tee time bookings will drastically change as owners and operators are provided more solutions that combat these major flaws in the online tee time booking industry.
In the past five years, cable subscribers’ numbers are in free fall and the “cord-cutting” movement is upon us as it relates to TV viewership. Consumers view streaming services as less expensive, more convenient, more options, more flexibility of viewing on multiple devices, and overall a better experience than cable TV. The numbers indicate that more and more viewers are making the switch. See Nasdaq article for more information on this topic:
I made the switch six months ago and I could not be happier. However, I had been thinking about the switch for three years. So why did it take me so long? The same reason golf course operators and owners stay on GolfNow. It was fear. I was afraid:
However, once I understood the technology, options, pricing, capabilities, and other consumer’s experiences it was an easy decision. Many parallels can be drawn between my experience leaving cable television and my experience leaving golfnow.com. I knew it was the right decision for years, but fear kept me entrenched longer than I should have. As I learned more, received more data, and became more open to other solutions I was able to conquer the fear of leaving both. The “Taking Our Golf Back” article series is written with an intent to arm the industry with the necessary information to conquer the fear of leaving third party tee time platforms. In June of 2020, we surveyed 6,700 golfers about their online tee time behavior and the results were telling.
For golfers that answered they had not booked online, they were asked the following:
Survey Notes: A powerful statistic is 20% of golfers have not booked a tee time online in the past 12 months and of those golfers, 45% have checked the internet for a courses inventory before they call to make a tee-time over the phone. Of that 45%, over half are checking the courses website and not a third party, meaning they are looking at one course’s inventory and not several. This behavior speaks to a mindset of a golfer deciding which course they want to play and then evaluating where they can book a tee time for the lowest rate. They are not looking at multiple courses and then deciding on the best deal. They are focused on one course and then finding the best deal at that course.
Survey Notes: It appears golfers still do appreciate the personal interaction with the golf shop over online bookings. A good thing for all of us.
For golfers that answered they had booked a tee time through an online channel were asked the following:
Survey Notes: More golfers book on a golf course’s website then on golfnow.com. So why are we allowing GolfNow to sell their “hot deals” on our golf course website’s booking engine? When they list their “hot deal” on your golf course website they are redirecting an organic customer of the golf course. That customer visited the course website because of the branding and reputation of that course in that market. The customer traffic goes to the course website, sees a “hot deal”, buys the “hot deal”, and the course likely receives $0 income while GolfNow is paid for that trade time. Assuming in this hypothetical GolfNow is using the “hot deal” to sell it’s trade.
If you think about this in terms of numbers as it relates to our survey, 6,700 golfers filled out the survey, 4,016 golfers are going to your course website for inventory, if we had GolfNow booking engines and “hot deals” on our course website that would translate to 4,016 times that an organic customer was exposed to a “hot deal”. In all likelihood that “hot deal” will be very appealing as the lowest price.
When that deal is purchased, the redirection of revenue occurs with the golf course receiving $0 and GN receiving payment for its trade. In a addition, GolfNow in all likelihood collects this customers information and you have turned an organic customer to the club into a customer that GolfNow can now re-market other “hot deal” opportunities on golfnow.com.
Survey Notes: Another powerful set of questions displays that if a golfer is familiar with your facility there were only 18 times out of 6,700 surveys that a golfer answered the above questions with a No for both questions. Meaning if the course offers daily deals there is only 0.2% of the total golfers that would no longer play your facility if not listed on golfnow.com.
Drilling down on the question of which online channels had been used to book a tee time, we discovered the following:
Of the 3,682 people that stated they had booked through GolfNow, 806 people stated this was the only channel they had used to book a tee time.
Of these 806 people:
Of the 1,446 people that booked on TeeOff.com, only 120 of them stated this was the only channel they had booked online.
Survey Notes: These two questions are immensely powerful to understand. If we combine the golfnow.com and teeoff.com information then of the 6,700 golfers surveyed, there are 926 that primarily book on either golfnow.com or teeoff.com as their current buying behavior. You could assume that 13.3% of available golfers might not see your inventory if you were not listed on these platforms. However, if you offered your lowest price on the website then 97% would be willing to change their booking habits! What does this mean, you can convert the most loyal third-party tee time customers with the lowest rate in the market. Consumers that book on third party platforms are price sensitive and you can draw them back by offering your own price breaks. If you protect against giving away your best rate you naturally curve the reliance on third party tee time platforms.
Survey Notes: I have seen this response returned in multiple surveys. About 50% of golfers are more concerned with time of play, and 50% are more concerned with price. There are two distinct groups for every golf course to market to.
The survey results indicate that a golf course with the correct strategy of maintaining its lowest price on its website can and will attract golfers that engage exclusively on third-party platforms. Furthermore, of the 6,700 participants in this survey, only 13.3% primarily used golfnow.com or teeoff.com. Almost all are willing to alter their behavior if a course provides the lowest price on its website. There is no indication from these results that a course should give away its customer data collection opportunity and its lowest price via barter. Do not be afraid to leave third party tee time platforms, golfers will find your course!
I am happy to share this survey with other operators. I encourage other operators to send the same questions to their database and get feedback from their customers. Share the results on LinkedIn and lets all be transparent about what our customers feedback is as it relates to online tee time bookings. I genuinely believe that we are all in this together, and if we can compile this feedback from golfers, I think we will have a better understanding of the real value of third-party tee time distribution.
CEO – Brown Golf
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.
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 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.
John Brown, CEO of Brown Golf Management was invited to discuss Barter and Today’s Golf Marketplace on the NGCOA Golf Business Live Webinar series.
NGCOA CEO Jay Karen and Augusta Ranch Golf Club owner and NGCOA Board member Don Rea welcome John Brown, CEO of Brown Golf, to the show. They discuss John’s article “Barter and Today’s Marketplace” which we featured in the latest edition of Golf Business WEEKLY. They also recap Tuesday’s special edition of Golf Business LIVE featuring U.S. Congressman Joe Cunningham (SC-01), and take a look across the golf landscape as courses resume operations in all 50 states.
In article one of this series, I provided an example to showcase the thought process behind entering into a relationship with a company whereby a club had to give away the two most important aspects of its future growth for access to a large new network. These aspects were:
The golf industry’s most important customer is the one that has booked a tee time at their facility. Club’s that take active measures to collect customer data and build remarketing strategies will deliver two important changes to their facilities:
Point number two, speaks to a process that is vital to any club owner/operator to understand its profitability. Internally, we call it RCA or Rate Channel Analysis (aka Rate Flow). The RCA process will give an operator a true understanding of their rates being offered and consumed, the margins associated with each rate category, and most importantly the average dollar per round in day parts or demand windows of a club’s tee sheet. A Rate Channel Analysis paired with a REVPATT (revenue per available tee-time) report is the process by which a club can define its true opportunity cost. This is also the process that will provide any operator the ability to place a true cost structure on any barter relationship they may enter in. The process does require an organized tee sheet and accurate data of how rates flow to a tee sheet. If you barter, and the majority of the times that are traded are moved during highly profitable day parts in a club’s tee sheet or during high demand windows then understanding where these trade times are cannibalizing your opportunity for revenue is essential in examining your effective cost structure for a barter relationship.
Below is an example of an offering made for a Brown Golf property previously. GolfNow offers “hot deals” on its platform. It is likely when you see a “hot deal” it represents inventory that GolfNow owns. Here is a “hot deal” that was offered on golfnow.com:
The inventory is priced and positioned to move. The golfnow.com platform is positioned in a way that customers can search for many different inputs including searching for just “hot deals”. If your club is sold out of “hot deals” on a particular day there could be a close competitor in your market who still may have an attractively priced “hot deal” to move. As an owner or operator is that a scenario you are comfortable competing in? What kind of long-term impact can be felt by introducing your customers to a platform that collects their data, offers them a lower price, and promotes your competitors?
The above principals are the foundation to allow an operator to setup its business systems for success long term. If you think about the glory days of golf in the 90’s and early 00’s tee times were almost exclusively booked via the phone. The phone guaranteed that operators controlled the rate flow, and the phone was the only opportunity to find the lowest price point for a club. The above recommendation takes in those two principals and it adds data collection and remarketing. If you focus on these principals you will be on a path to take your golf inventory back.
To understand the decisions around barter and today’s current marketplace, you need to dive deeper into one specific company. With GolfNow’s acquisition of EZLinks, the company now controls 90+% of the third-party tee time market and a majority of the public golf course Point of Sale’s market. That market position has grown because of key acquisitions and that strength is a major component that golf course owners and operators need to be aware of.
GolfNow (“GN”) started as a tee-time distributor. They aggregated golf course inventory and sold it online. They did not provide an array of technology tools; they were simply a distribution company. For one barter tee-time per day, you could access a national network that would help sell your tee-times. They had agreements with every major Point of Sale system in the industry, so that when a round was booked thru GolfNow.com, that reservation would go straight to the golf courses tee-sheet seamlessly. At the time, Point of Sale companies could have chosen to not allow GN to gain access to those integrations. GN, to its credit, negotiated contracts with these Point of Sale companies so that they could operate as a reseller for golf courses. The allowance of this open access, by the Point of Sale companies, is the foundation GN was built on.
In 2011, GN made the strategic decision to pivot and enter the technology space. As a distribution company, GN had no long-term contracts with golf courses. Golf courses could leave – if and when they wanted. Technology afforded them the ability to get golf courses into contracts, and in turn, gave GN a long-term commitment. They started by building websites, mobile websites and course specific web applications. What was the cost of the technology? Unlike the other website companies in the space charging a monthly cash payment, GN continued to offer barter. I would encourage all owners/operators to ensure they fully understand any trade time or barter language within any agreements they may have signed. GN was able to strengthen its ability to move trade by offering these new products to operators. Operators, in exchange, gave more flexibility in trade or barter language and thousands of operators, who perceived more value with additional products, obliged.
Is a trade time really a trade time?
If you are a course owner or operator and you are currently bartering or trading one, two or three times per day to any business for services, it is essential to understand the details and financial impact around that trade commitment. Is it simply a tee time per day? Meaning is it one specific time that is available and whether it is sold or not is solely the inventory of the company you are working with? Or are there other parameters which extend additional benefits or liquadation opportunities? I would encourage all operators to fully understand the inputs of any barter/trade relationships they enter with any third party. The specifics of that language, with all companies, are essential to understanding what inventory commitments you are truly making as an owner/operator. It is my opinion, that the golf courses I work with and have leased have not understood this interrelation.
Many of the Point of Sale vendors, that were GN partners, also made websites for golf courses. It was no secret, at this point, that GN would continue to move down the tech path and enter the Point of Sale space. It made sense, considering the POS tee-sheet vendors would have a say in allowing GN to integrate when their initial agreement ran out. Some Point of Sale companies, like Club Prophet, choose not to renew the integration terms with GN. I give Club Prophet a lot of credit. They are one of the only Point of Sale companies who said we are not willing to renew our integration because you are a competitor.
In 2013, after attempting to launch their own Point of Sale system developed in-house, G1, GolfNow purchased FORE reservations. For an additional commitment of trade, you could now have GN distribution, and GN’s tools- which included point of sale, tee-sheet, website and various other tools. Over the years, GolfNow has broadened their offerings and business with the acquisition of multiple companies in the golf industry sales, marketing and technology arenas. With each acquisition they increased their footprint as far as the number of clubs and more importantly they increased the inventory they could sell. They have also increased their offerings and asked for more trade in exchange for additional products and services.
EZLinks (“EZ”), GolfNow’s main competitor, had deployed a similar strategy in recent years. The counterpart to GolfNow.com was EZLinks owned TeeOff.com which partnered with the PGA tour prior to the acquisition by GN. Both companies provided similar products through a barter model in which you gain access to their products by allowing them to list bartered inventory on their third-party tee time outlets GolfNow.com and TeeOff.com.
When GolfNow announced its acquisition of EZLinks, it was a move that spoke volumes. With this acquisition, GolfNow controls over 90% of the third-party tee time market and a majority of the public golf course Point of Sale market – www.golfincmagazine.com/content/nbc-acquires-ezlinks-take-control-90-tee-time-market
This move allowed GN:
One of the largest impacts of this purchase was that it allowed GolfNow to own the barter agreements that EzLinks had constructed. If you are currently an EZLinks client and signed an EZLinks barter agreement, typically that barter would have been listed on the EzLinks owned TeeOff.com. The new reality is that your barter may be listed on both TeeOff.com and GolfNow.com. If GN was willing to publicly commit to only listing EZLinks barter on TeeOff.com I think that would go a long way in restoring consumer confidence in the original agreements that golf courses believed they were entering. I do not anticipate that happening, but I think it would be a great step by GN.
So why is this so valuable? The reason is GolfNow’s sell through rates or conversion rates (conversion rates = percentage of tee times sold versus inventory available) are likely significantly higher than TeeOff.com. This is because of GolfNow’s superior size, scale and reach. With the acquisition of EZLinks they have grown that size, scale and reach; and, if they take the approach of listing barter inventory in two platforms it will ensure a much stronger ability to liquidate agreed upon trade. As operators, we can be assured that any value we saw in unused inventory on GolfNow.com or TeeOff.com will be largely mitigated in the future if a trade time is listed on both outlets. Club owners/operators who entered into EZLinks barter agreements, agreed to trade for services, did so with the intention of that trade being listed on TeeOff.com. Is it reasonable for those owners to take issue with their inventory being listed on both TeeOff.com and GolfNow.com? Is GN willing to consider the position of their customers as it relates to this concern – time will tell. I believe it is a reasonable position to take that most EZLink customers who entered EZLinks agreements, did so with the intention of liquidating trade in EZLinks outlets.
With GolfNow’s new size, scale and reach they have pivoted tremendously from their days of relying on Point of Sale companies to give them open access or an open integration into their tee sheets for easy booking. If the Point of Sale companies would have denied this access to GolfNow.com originally, we would be looking at a much different golf technology landscape. This was the very principal their business was built on. Is that same open access available to a company that wants to work and integrate with GN owned systems today? If the golf courses hand is now forced to use GolfNow’s tools because the tools they may want to use do not integrate with the GN network would that be fair? Or would that fly in the face of the access GN needed when it was building its company? If GN were willing to provide this open access to other companies that would speak volumes to their desire to offer golf course owners the maximum flexibility to operate their business in a way they feel is the most advantageous. That would speak to their commitment to improving the golf course owner/operator’s business.
One question will tell you a lot?
As a course owner or operator who is exploring its sales, marketing and technology options there is one question that provides the litmus test when evaluating all Point of Sale companies. That question is “does your Point of Sale Platform and Tee sheet provide an open integration?”. If the answer is yes, you will always have the flexibility to partner with companies that you feel are helping your business. You will not be in a position where you have to select and choose your partners based on who has negotiated access to a company’s Point of Sale system.
I am a fan of the profit that GN has built. They have achieved impressive results and impacted our industry at every turn. You cannot deny the machine they have constructed. As a person in business, you can see they have made many good decisions for their business. My question is, has that model provided value for you the golf owner and operator? A complete understanding of a club’s total green fee, cart fee and range revenue impact is essential for an owner/operator to make effective decisions about the companies they partner with. That understanding is ultimately your autonomy as an owner/operator. If you understand the interrelation of your decision making and your golf revenues you will create a better business. With a foundational understanding of Brown Golf and some information about GolfNow, we are now ready to discuss how we can continue to elevate our industry and take our golf back.
The announcement of Brown Golf moving away from GolfNow and our push to stop trading tee times has sparked many great conversations and comments. Organization’s like the NGCOA have released full scale publications such as Beware of Barter addressing the impact of barter to educate the market (Article discussed in the March 2020 Edition of Golf Business). In 2018, The Tee Time Coalition released its bill of rights for golf course operators as it relates to marketing and distribution of tee times which addresses eight points every golf course operator should strive for. www.teetimecoalition.org/billofrights/. The industry is becoming more and more aware of the dangers of barter. I am excited to be a part of this new wave of information. In the coming weeks, Brown Golf will be releasing a series of articles titled Taking Our Golf Back with the goal of educating the marketplace on barter, GolfNow, and improving your overall business. The time is now to protect your business.
Imagine you are the owner of a company (Company A). It can be any company in any industry. A vendor in your industry brings you a pitch (Company B). Company B will bring you marketing exposure through a national network and provide you the opportunity to access customers you may or may not have had access to before. There is no out of pocket expense and it will only lead to new sales they say! Company B has a large market presence, has infiltrated every area of your industry, many of your competitors use them, and it is owned by a nationally recognized brand. More access, more sales, and absolutely zero out of pocket expenses. Sign me up.
What if the requirements of Company B to provide this access were two small things? Those items being:
When the prospects of giving away your customer information and your best price are presented does access to a larger network still interest you? An argument could be made that if Company A made more money than perhaps. However, any industry that gives away their customer data and best price is setting itself up for long term failure.
There are 9,000+ courses listed on Golfnow.com. 9,000+ Golf Course decision makers have said I believe GolfNow’s network is in my best interest. I don’t mind bartering for access to their network and giving up opportunities to collect customer data and offer the lowest price. I believe I am making more revenues as a result of this relationship. I feel I am getting value from this relationship.
In 2016, Brown Golf got serious about understanding the mechanics of how GolfNow operates at our facilities and more importantly what our agreements with GolfNow meant to the impact of our overall golf revenues which for the purpose of this series is defined as green fee, cart fee, and range revenue.
Brown Golf answered the question that all golf course owners and operators need to answer.
Does GolfNow revenue provide a positive correlation to a club’s golf revenues?
Brown Golf is a company with a portfolio that contains long term leases, third party management contracts, and annual consulting agreements. We currently operate nineteen facilities totaling 27 golf courses in seven states that include VT, PA, NC, SC, GA, FL, and MO. The company began operations in January of 2011 and over the years we have implemented several strategies to gain control of our tee sheets. We are uniquely qualified to educate the industry for the following reasons:
In the coming weeks and months, we will distribute articles and communication about our experience with GolfNow. We look forward to continuing the many great conversations that have already been started about an industry ready for a change. We are here as a resource. We understand the idea of converting your technology relationship away from a company that controls 90%+ of the third-party tee time market, and 75% of the public golf course POS market is scary. There is a path to better solutions, a clearer understanding, market-based cash pricing, and the ability for a golf course to own its customer data and the lowest price in the market. We plan to show you that path.
John M. Brown
CEO – Brown Golf
My favorite thing about the area is of course the golf and fishing but also the location, it’s extremely close to Florida to which we travel a lot to Orlando, Jacksonville and others
One of the best story’s was watching a fellow employee, Bob Ruby, drill a 30-foot birdie putt on hole #18 in a 2-man playoff to win the Senior York Open, while a few of our employees working that day got to watch it.
Brown Golf Management is excited to announce our partnership with Bird Golf Academy. Through this partnership, we are able to provide golf instruction to golfers through a vacation style setting.
Brown Golf Management is pleased to announce that Lederach Golf Club has been granted, Audubon International Certification. Under the guidance of Golf Course Superintendent, Stuart Hartman
We are excited that our CEO, John M. Brown has been asked to speak at the upcoming Golf Inc. Magazine Strategies Summit. John will be speaking about High Tech Marketing and Driving Profitability through Technology.
Brown Golf has added a club close to home in Mount Wolf, PA. Brown’s portfolio now includes twenty-eight golf courses that are located in seven states that include: VT, PA, NC, SC, GA, MO and FL.
Penn Live has selected Royal Manchester Golf Links as #8 on its “Top 20 public golf courses in PA
CEO, John M. Brown speaks with Dale Merritt from GolfPay on how golf course operators are adapting (or not), to the modern age consumer, and how Brown Golf facilities are using Golfpay to drive more business direct vs. relying too heavily on expensive 3rd party tee time providers.
Palisades Country Club located in Charlotte, NC announces the grand opening of Bear’s Den Restaurant
Brown Golf has added a club close to home in Mount Wolf, PA. Brown’s portfolio now includes twenty-eight golf courses that are located in seven states that include: VT, PA, NC, SC, GA, MO and FL.
Central Penn Business Journal has listed Brown Golf Management on the Top 50 Fastest Growing Companies in Central Pennsylvania.
John A. Brown, president and CEO of Brown Golf Management, has decided to retire from the business and sell his majority interest to his partners. His three partners are sons John M. Brown and Todd Brown, the company’s COO and executive vice president, and CFO Jason Harshbarger.
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