August 18, 2022
I once asked a wise economist if we were headed for a recession.
“We’re not in one, are we?” he responded, before pausing for dramatic effect.
“Then we’re headed for one.”
The golf business has weathered eight recessions over the past 50 years. And, once again, we’re headed for another. That is, if we aren’t already in one. The National Bureau of Economic Research (NBER), the official arbiter of recession status, has yet to declare the current stretch as such, even though this year started with two consecutive quarters of negative GDP growth.
Each time a recession looms, the question arises, “Is Golf Recession Proof?” Put simply: No, we’re not.
I was first asked this question in the late 1980s and it’s continued to crop up over the years, as this 1990 cover of “Golf Shop Operations” attests.
That said, we do have some things going for us. We enjoy a generally affluent customer base, 47% with household income above $100,000. Unless the recession is broad and deep, consumers with this level of income generally keep on spending. On the other hand, 53% of U.S. golfers have a household income of $99,000 or below. Many of these customers feel the pinch of a recession sooner and more acutely than more-affluent golfers.
Knowing another recession is inevitable, we were recently asked to share our advice with golf course operators who, for the most part, have enjoyed a notable bump in business the past few years.
The question: How do you prepare?
Our answer: Strengthen the customer experience.
NGF’s ongoing engagement with the most successful golf course operators and management companies reveals a common thread: ambition to create consistently memorable experiences using a recipe that combines good people and good product. Particularly in the face of a looming recession, it’s about focusing less on hard-dollar initiatives and more on creating happy customers.
Improving the customer experience is neither a new nor novel idea, and yet for most businesses it remains exactly that: just an idea. Meanwhile, those who’ve made it part of their culture and strategies continue to outperform the competition. Think of companies like Apple and Chick-Fil-A, or businesses where “good people” help to elevate an otherwise undifferentiated product. Southwest Airlines, maybe?
There are a number of approaches to try to ensure the golf experience is a memorably positive one. You can find eight of the best practices here.
Here’s one idea. Send an anonymous friend in to “secret shop” your facility. Secret shopping is not being “sneaky,” it’s customer experience research. Great businesses do it regularly, and a few take it to an extreme, like those who appear on “Undercover Boss.” You’ll learn what kind of an experience you’re offering and whether you think people will choose to play golf at your facility in the middle of a recession. You might be surprised what you discover – good or bad.
But you can’t take steps to improve any shortcomings unless you know about them first. Mark Twain put it this way: “It’s not what you don’t know that kills you, it’s what you know for sure that ain’t true.”
This advice isn’t just for course operators, by the way, it’s for all golf businesses. Secret shopping research is just one of the many projects undertaken by our NGF team. If we can help you, let us know.