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Transcript of 5 Minutes-Importance of Issues Ruffin Beckwith - Golf 20/20 10 Minutes-Retention Data Ben Blake -...
5 Minutes5 Minutes -- Importance of IssuesImportance of Issues
Ruffin Beckwith - Golf 20/20Ruffin Beckwith - Golf 20/20
10 Minutes10 Minutes -- Retention DataRetention Data
Ben Blake - Links CorpBen Blake - Links Corp
15 Minutes 15 Minutes -- Frequency ProgramsFrequency Programs
Mike CapizziMike Capizzi - Frequency Marketing Group - Frequency Marketing Group
35 Minutes35 Minutes -- Group Discussion/IdeasGroup Discussion/Ideas
10 Minutes10 Minutes -- Develop RecommendationsDevelop Recommendations
TODAY’S AGENDATODAY’S AGENDA
VISION: VISION: ATTRACTION & ATTRACTION & RETENTIONRETENTION
3.0 Million 2.5 Million
3.0 Million 3.5 Million
WHY PEOPLE LEAVEWHY PEOPLE LEAVE
• TimeTime 62%62%
• FamilyFamily 38%38%
• CostCost 29%29%
• HealthHealth 18%18%
• No one toNo one to 16% 16% play with play with
• Too difficultToo difficult 12%12%
Source: 2001, Golf 20/20 Segmentation StudySource: 2001, Golf 20/20 Segmentation Study
INDUSTRY REPORT-FREINDUSTRY REPORT-FREQUENCYQUENCY
Year Occasional (1-7)
Core (8-24)
Avid (25+)
1997 10.6M 7.9M 5.6M
2000 10.9M 7.3M 6.2M
2001 14.2M 5.7M 5.9M
Source: 2002, National Golf Foundation
ANNUAL CONTRIBUTION TO ANNUAL CONTRIBUTION TO THE GOLF ECONOMY, BY THE GOLF ECONOMY, BY SEGMENTSEGMENT
Per Person Total
Occasional (1-7) $409 $8,082,000,000
Core (8-24) $2,276 $18,028,000,000
Avid (25+) $4,355 $36,057,000,000
Source: 2002, SRI International
RETENTION AND RETENTION AND FREQUENCYFREQUENCYBen BlakeBen Blake
President and CEOPresident and CEO
LinksCorpLinksCorp
• Supply and demand imbalanceSupply and demand imbalance
– More coursesMore courses
– No growth in the number of roundsNo growth in the number of roundsand playersand players
• More recreation/entertainment More recreation/entertainment choiceschoices
• Slowing economy/less spendingSlowing economy/less spending
WHY IS RETENTION WHY IS RETENTION IMPORTANT?IMPORTANT?The Environment Today - What Has Changed?The Environment Today - What Has Changed?
WHILE ATTRACTION IS WHILE ATTRACTION IS IMPORTANT… Retention is IMPORTANT… Retention is Key!Key!• It costs up to five times as much to attract a It costs up to five times as much to attract a
new customer as it does to keep onenew customer as it does to keep one
• A dissatisfied customer will tell 8 to 16 people A dissatisfied customer will tell 8 to 16 people about the bad experienceabout the bad experience
• A satisfied customer will stay loyal if you build a A satisfied customer will stay loyal if you build a relationshiprelationship
• The real value of a satisfied customerThe real value of a satisfied customeris how much that customer spends overis how much that customer spends overa lifetimea lifetime
15% OF ALL GOLFERS ARE 15% OF ALL GOLFERS ARE “BEST” CUSTOMERS“BEST” CUSTOMERS
6.6 million 6.6 million Avid Golfers Avid Golfers
(25+)(25+)
7.6 Million 7.6 Million Best Best
Spenders Spenders ($1,000+)($1,000+)
2.5 Mil
3.5 Mil4.1 Mil
10+ Million (40%) are “Important” Customers10+ Million (40%) are “Important” Customers
4 Million (15%) are “Best” Customers4 Million (15%) are “Best” Customers
Source:Source:Golf 20/20Golf 20/20
LinksClub 2001 RESULTSLinksClub 2001 RESULTS
%% Rds/Rds/ Spending/Spending/ %%
MembersMembers MembersMembers RdsRds MemMem %Rds%RdsSpendingSpending
A - MedallistA - Medallist 4,7424,742 5%5% 15.515.5 $549$549 28%28% 29%29%
B - RewardB - Reward 6,6926,692 7%7% 7.27.2 $243$243 18%18% 18%18%
C - No Reward 2+ RdsC - No Reward 2+ Rds35,28835,288 36%36% 2.82.8 $94$94 38%38% 36%36%
D - No Reward 1 RdD - No Reward 1 Rd 43,10943,109 44%44% 1.01.0 $35$35 16%16% 17%17%
E - No RdsE - No Rds 8,5618,561 9%9% 00 $5$5 0%0% 0%0%
TotalTotal 98,39298,392 100%100% 2.72.7 $93$93 100%100% 100%100%
2001 - LinksClub Highlights
• 267K LinksClub Rounds Played at 17 LC Public Courses
•LinksClub Rds were almost 50% all Public Rds at 17 courses
•$34.08 per round per member spending
““BEST” CUSTOMERS DRIVE BEST” CUSTOMERS DRIVE ROUNDS & REVENUESROUNDS & REVENUES
• The top 19% of members (A & B) The top 19% of members (A & B) represent 54% of rounds and 56% of represent 54% of rounds and 56% of revenuesrevenues
• Segmentation shows that the top 6% of Segmentation shows that the top 6% of members are extremely valuable to members are extremely valuable to LinksCorpLinksCorp
2001 2002
4% 6%
9% 13%
41% 35%
46% 46%
% OF MEMBER
S 2001 2002
23% 29%
22% 25%
40% 31%
15% 14%
% OFROUNDS
2001 2002
24% 31%
22% 25%
38% 30%
16% 15%
% OFREVENUE
Segment
Medallist (A)
Reward (B)
No Reward 2+ Rounds (C)
No Reward 1 Round (D)
RETENTION BY SEGMENTRETENTION BY SEGMENT
• Medallist members maintaining a high year-1 Medallist members maintaining a high year-1 retention and 2-year retention rateretention and 2-year retention rate
Year-1 2000-2001
Year-1 2001-2002
Year-2 2000-2002
89% 85% 71%
80% 69% 58%
54% 43% 37%
30% 21% 20%
TOTAL MEMBERSHIP RETENTION
Segment
Medallist (A)
Reward (B)
No Reward 2+ Rounds (C)
No Reward 1 Round (D)
REWARDS PROGRAMS WORKREWARDS PROGRAMS WORK
2001
SegmentMedallist (A)Reward (B)No Reward 2+ Rounds (C)No Reward 1 Round (D)Total
Members %
2,933 4%
7,019 9%
31,867 41%
35,027 46%
76,846
2002
Members %
4,583 6%
11,575 13%
31,764 35%
41,197 46%
89,519
Positive Segment Migration in 2002Positive Segment Migration in 2002
LinksClub…LinksClub…WHAT HAVE WE LEARNED?WHAT HAVE WE LEARNED?
• You You cancan influence customer behavior and influence customer behavior and retain your best customers!retain your best customers!
• If we can get a LinksClub member to play If we can get a LinksClub member to play his/her 2nd round in 30 days or less, they his/her 2nd round in 30 days or less, they will likely play 3 more rounds. If not, we will likely play 3 more rounds. If not, we may lose them.may lose them.
• Highly efficient - marketing costs have Highly efficient - marketing costs have gone down 25% (2001 vs. 2000) while gone down 25% (2001 vs. 2000) while revenues have gone up.revenues have gone up.
SUCCESSES IN FREQUENCY SUCCESSES IN FREQUENCY MARKETINGMARKETINGMike Capizzi, Vice PresidentMike Capizzi, Vice President
Frequency Marketing GroupFrequency Marketing Group
GLOBAL QUESTIONSGLOBAL QUESTIONS• We have national programs to promote “Trial”, do We have national programs to promote “Trial”, do
we need a national program to promote we need a national program to promote “Retention”?“Retention”?
• Should one organization have “Retention” as an Should one organization have “Retention” as an objective?objective?
– NewCo (a new organization similar toNewCo (a new organization similar toThe First TeeThe First Tee
– Existing organizationExisting organization(PGA of America, for example)(PGA of America, for example)
• Can we indentify and track our “best customers” on Can we indentify and track our “best customers” on a national basis?a national basis?
• Would you be willing to help fund a national Would you be willing to help fund a national “Retention” program“Retention” program– Fee added to each paid roundFee added to each paid round– Flat fee per courseFlat fee per course– Ideas?Ideas?
• If funding is an issue, would you be willing to If funding is an issue, would you be willing to “sell” the “rights” to a for-profit company to “sell” the “rights” to a for-profit company to promote retention at your facility?promote retention at your facility?– Nike Golf Schools (for example)Nike Golf Schools (for example)– National Customer Loyalty Program (for example)National Customer Loyalty Program (for example)– Other ideasOther ideas
GLOBAL QUESTIONSGLOBAL QUESTIONS
GLOBAL QUESTIONSGLOBAL QUESTIONS
• What are the things we can do as an What are the things we can do as an industry to impact frequency?industry to impact frequency?
• Is it feasible to consider national Is it feasible to consider national frequency programs? State-wide?frequency programs? State-wide?
MICHAEL T. CAPIZZIMICHAEL T. CAPIZZILoyalty Marketing Programs: Loyalty Marketing Programs: Key Considerations for the Golfing IndustryKey Considerations for the Golfing Industry
November 15, 2002November 15, 2002
MICHAEL T. CAPIZZIMICHAEL T. CAPIZZILoyalty Marketing Programs: Loyalty Marketing Programs: Key Considerations for the Golfing IndustryKey Considerations for the Golfing Industry
November 15, 2002November 15, 2002
COLLOOUYPresents
A Lot of Jargon A Lot of Jargon A Lot of Jargon A Lot of Jargon
• Frequency MarketingFrequency Marketing
• Relationship MarketingRelationship Marketing
• Loyalty MarketingLoyalty Marketing
• One-to-One MarketingOne-to-One Marketing
• Customer Relationship Management Customer Relationship Management (CRM) (CRM)
COLLOOUYwww. .com
““The voluntary exchange of The voluntary exchange of
information and value between information and value between
the brand and the customer with the brand and the customer with
the mutual expectation of gain.”the mutual expectation of gain.”
Definition of Relationship:Definition of Relationship:
COLLOOUYwww. .com
Loyalty Marketing is the effortLoyalty Marketing is the effort
to identify, maintain, and increaseto identify, maintain, and increase
the yield from Best Customers the yield from Best Customers
through, long-term, interactive, through, long-term, interactive,
value-added relationships.value-added relationships.®®
What is Loyalty Marketing?What is Loyalty Marketing?
COLLOOUYwww. .com
Why Bother? Why Bother? Why Bother? Why Bother?
• To To identifyidentify– In order to increase marketing effectivenessIn order to increase marketing effectiveness– In order to re-allocate marketing expenses In order to re-allocate marketing expenses
to improve efficienciesto improve efficiencies– In order to learn who your customers are, In order to learn who your customers are,
what they want from you, what other what they want from you, what other courses to playcourses to play
– To leverage the resulting database in To leverage the resulting database in partnership marketing agreementspartnership marketing agreements
COLLOOUYwww. .com
Why Bother? Why Bother? Why Bother? Why Bother?
• To To maintainmaintain
– It is cheaper to retain than it isIt is cheaper to retain than it isto acquireto acquire
– New growth without retentionNew growth without retentionis no growthis no growth
– The cumulative effect on profitabilityThe cumulative effect on profitabilityis provenis proven
COLLOOUYwww. .com
Why Bother? Why Bother? Why Bother? Why Bother?
• To To increase the yieldincrease the yield– By adding frequency of play to your course By adding frequency of play to your course
vis-à-vis other alternativesvis-à-vis other alternatives
– By adding incremental spend toBy adding incremental spend toeach visiteach visit
– By adding “derived” yield from guests who By adding “derived” yield from guests who play at the invitation of your customersplay at the invitation of your customers
– All of the aboveAll of the above
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Loyalty Marketing Can … Loyalty Marketing Can … Loyalty Marketing Can … Loyalty Marketing Can …
• Improve customer retention (LTV)Improve customer retention (LTV)
• Increase share-of customerIncrease share-of customer– from competitorsfrom competitors– via cross- / up-sellvia cross- / up-sell
• Provide a framework forProvide a framework forrelevant dialoguerelevant dialogue
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Loyalty Marketing Can’t … Loyalty Marketing Can’t … Loyalty Marketing Can’t … Loyalty Marketing Can’t …
• Fix a fundamental problemFix a fundamental problem
• Generate quick profitsGenerate quick profits
• Bring in lots on newBring in lots on newcustomers fastcustomers fast
COLLOOUYwww. .com
Where Does it Work? Where Does it Work? Where Does it Work? Where Does it Work?
• Highly competitive marketsHighly competitive markets
• Parity is perceived to be highParity is perceived to be high
• High fixed, low variable costHigh fixed, low variable cost
• Perishable inventoryPerishable inventory
• Purchase behavior can be trackedPurchase behavior can be tracked
• Purchase (payment) cycles are frequentPurchase (payment) cycles are frequent
• Management doesn’t want toManagement doesn’t want tocompete on pricecompete on price
COLLOOUYwww. .com
Why Loyalty Marketing Works: Why Loyalty Marketing Works: Why Loyalty Marketing Works: Why Loyalty Marketing Works:
• All customers are All customers are notnot created equal created equal• Share-of-customer is a more profitable pursuit Share-of-customer is a more profitable pursuit
than share-of-marketthan share-of-market• Improve earnings by shifting resourcesImprove earnings by shifting resources• Proactively manage relationshipsProactively manage relationships• Relevant dialogue creates competitive advantageRelevant dialogue creates competitive advantage• It builds brand loyalty, not “sale” loyaltyIt builds brand loyalty, not “sale” loyalty• It breaks the tie when all other things are equal It breaks the tie when all other things are equal
or closes the gap when the differenceor closes the gap when the differenceis smallis small
Marketing programs that recognize and Marketing programs that recognize and
reward customers based on tracking their reward customers based on tracking their
individual purchase behavior.individual purchase behavior.
Loyalty Marketing ProgramsLoyalty Marketing Programs
COLLOOUYwww. .com
“ “Man is an economic animal in Man is an economic animal in search of self-importance…”search of self-importance…”
Brian WoolfBrian WoolfCustomer Specific MarketingCustomer Specific Marketing
BenefitsBenefits
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Benefits – Soft vs. Hard Benefits – Soft vs. Hard Benefits – Soft vs. Hard Benefits – Soft vs. Hard
• Recognition (Soft)Recognition (Soft)– EmotionalEmotional– IntangibleIntangible– Exclusive Exclusive
• Reward (Hard)Reward (Hard)– RationalRational– TangibleTangible– FreeFree
COLLOOUYwww. .com
The Perfect Blend of The Perfect Blend of IncentivesIncentives
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Compelling Hard Benefits
Promotional CurrenciesTangible Rewards
“I get my money’s worth”
Defining Defining Soft BenefitsSoft Benefits
RecognitionPersonalization
“They know I’m important”
The Value Proposition
5% Factor
Why Use Promotional Currency? Why Use Promotional Currency? Why Use Promotional Currency? Why Use Promotional Currency?
• To create the perception of value and To create the perception of value and take the focus off pricetake the focus off price
• To create a sense of “equity” and a To create a sense of “equity” and a barrier to exitbarrier to exit
• To establish a relevant dialogueTo establish a relevant dialogue• To provide funding flexibilityTo provide funding flexibility• Because they “break”Because they “break”
COLLOOUYwww. .com
Points vs. DiscountsPoints vs. Discounts
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$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
Partners
Breakage
Your Cost
$1 Discount $1 Points
Pursuing the “Perfect” BlendPursuing the “Perfect” Blend
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Perceived ValuePerceived Value
Actual CostActual Cost
Marginal Good Ideal
Closing Thoughts Closing Thoughts Closing Thoughts Closing Thoughts
• Loyalty programs will work in the golfing industryLoyalty programs will work in the golfing industry
• A shared cost approach is the best way to goA shared cost approach is the best way to go
• Track and reward all behaviors across all payment Track and reward all behaviors across all payment methodsmethods
• Offer a strong value proposition for the golferOffer a strong value proposition for the golfer
• Some technology investments will be requiredSome technology investments will be required
• Rapidly evolve to “other peoples money” via Rapidly evolve to “other peoples money” via partnership marketingpartnership marketing
• Measure, measure, measure and stay focused on the Measure, measure, measure and stay focused on the ROIROI
COLLOOUYwww. .com
COLLOOUYwww. .com
COLLOOUYFor more information contact:
Michael T. Capizzi513.248.5630