Guidelines written for dealing with Groupon23rd August, 2013 by Emma Williams
The European Golf Course Owners’ Association (EGCOA) has issued guidelines to all European golf clubs for dealing with third party tee time resellers such as Groupon and AmazonLocal.
A number of golf clubs have complained that using external non-golf websites such as Groupon and AmazonLocal to market and sell tee times have unsustainably devalued golf, taken money out of the game and taken power away from golf venues, even though the campaigns are often successful at increasing footfall to a club.
For example, Steve Rumball, manager of Chalgrave Manor Golf Club in Befordshire, said: “We were not allowed to decide how much to set the deal at – Groupon 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 percent of the money.”
And the chair of the Organisation of Golf and Range Operators, Colin Jenkins, warned of the practice, carried out by some tee time sales companies, in which they are prepared to market the club for free – provided they choose when the tee times are and what the discount is.
“This is the scariest development of them all, as golf clubs then lose control of their tee sheet and pricing structure to someone else,” he said. “The clubs end up undercutting themselves!
“It puts golf clubs in the same position as farmers, when it comes to negotiating prices for their produce with supermarkets. Supermarkets now dictate the produce, its colour, size and taste, and then proceed to impose very tough payment terms.
“If golf clubs are not careful, they may suffer the same fate.”
As a result, EGCOA has issued guidelines that state that golf courses should promote as much sales as possible directly through their own websites, pro shops or call centres, and that any work with third party tee time resellers should strictly be to drive incremental business and fill soft demand periods, and that this should be part of a marketing plan that positions the resellers as part of a supporting strategy only.
EGCOA adds that golf clubs must sign a written contract with the reseller that details that the club has the right to a penalty-free termination of the contract with immediate effect at all times.
The contract, says EGCOA, must also state that clubs should have the right to require that their own posted rates and promotions are the best offers at all times, that the golf clubs must have access to and ownership of all pertinent data, that the barter payment model is not adopted, that tee times can not be auctioned, that rules regarding search engine optimisation are agreed in advance and that the club has the power to choose which tee time inventory is used. In total, EGCOA has issued 22 rules that clubs should adopt to avoid some of the pitfalls that clubs have fallen into.
EGCOA president Alexander Baron von Spoercken said: “Like the airline and hotel industry, the last few years has witnessed a significant shift in the golf industry to the trend of online booking. If managed correctly, the power of the web and online booking platforms can be harnessed to drive additional revenue for a golf facility.
“We have released these best practices to provide clarity and direction for our members across Europe, allowing them to see the big picture and make informed and educated decisions based on the facts when dealing with third party tee time resellers.”
He added: “Thanks to the experience of our American and Canadian owners’ associations we have been able to learn from some of the negative implications that poor practices have had on their markets.
“With this insight we aim to be proactive in avoiding some of the pitfalls experienced in North America and to educate our members to the best of our ability.
A spokeswoman for Groupon said that the company does not dictate to golf clubs, but instead works with them to fill up unused tee times.
“Groupon are keen to be seen as a core part of a golf club’s marketing mix,” she said.
“We work with individual golf clubs to understand their specific marketing objectives and put together compelling offers for consumers that meet the club’s marketing needs and cost considerations.
“We work with golf clubs nationwide to attract new players to market, to fill underutilised tee times and difficult to market times of year, and to raise awareness of clubs to local markets and visiting consumers. Clubs also have the opportunity to showcase their products and services and increase their customer base as well as the opportunity to upsell and cross sell their merchandise and products.
“Groupon rely on long standing business partnerships built upon successful campaigns in collaboration with clubs that meet the businesses’ marketing requirements with customer demand.”