What’s Your Market Penetration:
Do you know either the numerator or the denominator?
As is often the case, this month’s topic is the result of recent conversations with clients and one of our joint product development partners all of whom were asking the same basic question: How do I know what my “fair share” of my market is and whether I’m getting more or less than that amount of golfers/rounds/revenue?” It’s a great question but unfortunately historical limitations of data collection, a lack of collaboration among technology providers and a lack of coordination (and leadership) by industry “collectives” have combined and conspired to make answering this question nigh unto impossible. Not anymore for those who want to know and are willing to work at it with us.
Having done this type analysis a fair share of times in my Consumer Package Goods experience (sorry, couldn’t resist that pun), while the formula is simple, acquiring the right facts and being able to integrate them responsibly is a little more challenging. While we’d ideally want to know how we’re doing at fair share for the 3 metrics in the opening paragraph, in this issue I’ll focus on how we’re helping select operators figure out the golfer fair share question and then you likely can extend the logic from there to rounds and revenue:
- What’s my market? Golf (excluding resorts and “destinations” like Orlando, Myrtle Beach etc.) share similarities with retail establishments which rely on proximate population. Our work over the years in client golfer surveys and geo-coding of their customer databases by address routinely suggests that a 25-minute drivetime is the average “draw area” for Public, Regulation-length golf facilities that serve their local communities. For starters, you have to be able to define and quantify what lies within this geography (demographics, golfers, supply, rounds etc.)
- Who do I actually compete with based on my golf experience and my positioning in the marketplace? We built Pellucid’s facility segmentation in the Golf Local Market Analyzer (GLMA) specifically to address this question. Public facilities usually don’t compete for Private golfers (some of the Public-Premium might disagree with me), Regulation-length facilities generally don’t cater to alternate experience golfers (what we designate as Learning & Practice facilities) and, within the remaining universe of Public, Regulation-length facilities, Public-Premium facilities generally don’t compete for golfers with Public-Price facilities. You’re only competing with a subset of supply in your market within the above proximity range
- Do I know the “market’s numbers”? (the more-elusive denominator for fair share) Based on our 3 years of modest interest and adoption of our Golf Market Research Center (GMRC) initiative which we designed to help you answer this question, I can say with high confidence the answer to this is “no”. Ergo, no denominator = no share; no share = no “fair share” We’re working with a few progressive clients and a technology development partner to combine our knowledge of the market (i.e. how many golfers are in the local trade area) with an automated extract and summary of the unique customer counts which will unlock the ability to know, and track, fair share
- Do I know my numbers? (the numerator for fair share) You obviously know your rounds and golf revenue (even though some of you have relayed that getting it out of your PoS system on a weekly basis is harder than it needs to be) but I’ve been surprised how few courses (<20% I’d wager based on our work with our clients) know a critical factor of how many unique customers they have, even just across a calendar year
Lots to cover (for our subscribers) in this issue so let’s get started. For everyone else, this is the end of the line so…if you want the rest of the story, you can join us for this episode and going forward one of three ways (all of the below also have monthly pay-go options, at a slightly higher annual rate):
- Subscribe to the Pellucid Publications Membership for $495/yr (most comprehensive coverage & detail) – Annual subscribers get access to the following:
- Outside the Ropes monthly digital newsletter (including this issue for starters!)
- Annual State of the Industry report portfolio (PowerPoint presentation, PDF commentary report, access to Jim/Stuart video of presentation)
- Geographic Weather Impact Tracking (US, 45 regions, 61 markets) or Cognilogic for Golf Playable Hours/Capacity Rounds for individual facilities
- National Consumer Franchise Health Scorecard (expanded data and tables underlying this issue’s summary figures)
- Subscribe to OtR, 12 monthly issues for $250/yr with a money-back guarantee if you’re not satisfied at any time during your subscription. Subscribers also get access to the historical archive of past issues (last two years) via the members-only section of the Pellucid website
- Subscribe to Golf Market Research Center (for operators wanting a combination of insights and action tools) – In addition to an OtR subscription, you’ll get the State of the Industry presentation along with the full suite of Performance Tracking reports and weather impact services (Cognilogic for historical Golf Playable Hours/Capacity Rds, Foresight for the 60-day forecast for your facility location for Capacity Rds and daily key weather forecast variables)
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