The last part of the series of articles from Promote Training, the golf club management eLearning specialists, looks at how any club can apply yield-based pricing criteria to their group booking business.
It is difficult to talk of driving green fee revenues in a group-booking context without talking about variable pricing strategies. And you can’t talk about variable pricing strategies without talking about yield management. According to Wikipedia yield management is:
“…a variable pricing strategy, based on understanding, anticipating and influencing consumer behavior in order to maximise revenue or profits from a fixed, perishable resource”
Understanding, anticipating and influencing your customers starts with the analysis of the correct data – a statistical trawl of what’s going on within the business, especially on the golf course. The depth and level of the data we can derive and the analysis thereof drives the criteria we can use to vary our pricing points.
Many clubs are operating a basic variable pricing strategy already – they charge a lower amount for winter group bookings knowing they’re a ‘harder sell’. Conversely, some coastal clubs with great drainage actually charge a premium.
Day of the Week
Again, some clubs are already doing this. At its most basic, they are charging a premium to play at the weekends. Some charge slightly more to play on a Friday as well. In most cases, Monday to Thursday is lumped in together and priced the same.
Number of Participants
This one is less practiced in the UK industry and a significant opportunity. A group booking of 120 people is extremely precious and quite rare (in most clubs) – why wouldn’t you price it accordingly? You probably wouldn’t get 120 paying visitors if the group booking didn’t exist – so you can afford to lower the price and still be significantly better off. Conversely, a group booking of 8 people isn’t as lucrative in terms of monetary value and may restrict a larger booking enquiry coming in afterwards – isn’t that something that should be charged at a premium?
An important additional point to your terms and conditions are needed here – “If any discounted or agreed price is on the basis of a minimum number, this set price will only apply if on the day the set number of participants attend”. A golf day arriving with less than the number confirmed could push the price up – that’s not something easily communicated to the organiser if they didn’t know it could happen.
Tee Times Booked
All clubs have popular and unpopular tee times. Unfortunately, many clubs only have a gut feeling as to when they are. Knowing precisely what your peak and off-peak tee times are allows you to vary the price for group bookings. If 2pm is usually very quiet, why wouldn’t you offer a discount? If 9am is usually very busy, why wouldn’t you charge a premium?
We’ve already spoken about our desire to increase the sales window – to encourage organisers to book early so we understand the future group booking trends earlier and can take action as required. A variable pricing strategy that encompasses this criterion can help shift the window.
This is a slightly different criterion but something that needs to be considered carefully – those odd days that confound our data-driven criteria. For instance, Mondays in April may be quiet – but what about Easter Monday? That has the potential to be quite popular. Fridays in September may be quite busy – but what about the week the Head Greenkeeper is doing his biannual hollow coring and top dressing? Should you be charging a premium on this Friday for a course in less than perfect condition?
It’s probably an unfortunate consequence of a wider society change that in many clubs, group bookings are choosing to have less and less catering elements to their event. Where once the majority of bookings had a sit-down 3-course meal at the end of the day – at many clubs today they are in the minority. So, can we box a little clever here and add a silent ‘No Catering’ surcharge to the events that have little or no food? There’s nothing more frustrating than an enquiry coming in afterwards that want the full 3-course presentation dinner included but can’t get the tee times because a booking with no food at all has already confirmed.
The word “silent” in this instance means that the organiser doesn’t get to know they’ve been charged it – it simply gets added onto the green fee. Keeping it silent in this way provides a great opportunity to offer a discounted catering up-sell nearer the date of the event. It will be perceived as a discount by the organiser but won’t actually be a discount for the club – it will simply be the removal of the no-catering surcharge.
A variable pricing strategy based on just these seven criteria can have a dramatic impact on a golf clubs’ group booking revenues. In some instances many prices will be discounted – sometimes quite aggressively. In other cases, by understanding when we’re busy prices will be increased. But in both circumstances, they will be priced on a fixed criteria derived from historical fact. From a quantitative perspective, that’s something difficult to argue against.