Ngf Report #1 Way To Grow Revenues
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Transcript of Ngf Report #1 Way To Grow Revenues
Loyal customers deliver new customers through the positive referrals they make
Disloyal customers steer away customers through the negative referrals they make
Increase Customer Loyalty
What Is The Most Certain Way To Get Long Term Revenue Growth?
If growth is what you’re after, you won’t learn much from complex measurements of customer satisfaction or retention. You simply need to know what your customers tell their friends about you.
1/2006
12/2003
The Concept That Started A Loyalty Revolution
What is the Ultimate Question
“Please rate how likely you would be to recommend _________ Golf Course to a friend or colleague.”
• Buyer Economics – All spending of customers at the facility
• Referral Economics – Word of mouth about the facility
11/2008
The Economics of Customer Loyalty
1Based from NGF Research at golf facilities
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Customer Loyalty
Average # of Referrals by Customer Loyalty
Positive
Negative
Average Counts of Referrals by Loyalty Response
$585$620
$691
$300
$350
$400
$450
$500
$550
$600
$650
$700C
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Detractors Average Customer Promoters
Buyer Economics
Average Spend Per Player Per Year by Customer Loyalty1
Overall Average Green Fee Revenues Per
Customer $620
1Based on NGF’s Benchmark database
for all golf facilities nationwide
Assuming $45 Average Green Fee + Food and Beverage Per Round $7.00 + Pro Shop Sales Per
Round $3.86
The Impact of Customer Spend
Referral EconomicsCustomer Worth Based on Word-of-Mouth Behaviors
($552)
$194
$738
($800)
($600)
($400)
($200)
$0
$200
$400
$600
$800
$1,000
Detractors Average Customer Promoters
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1Based off of NGF’s Benchmark database
for all golf facilities nationwide
Assuming $45 Average Green Fee + Food and Beverage Per Round $7.00 + Pro Shop Sales Per
Round $3.86
Referral Impact for Promoters = 1.19
Referral Impact for Detractors = -.89
Average Customer Spend = $620
-.89 x $620 =
1.19 x $620
=
The Impact of Positive & Negative Referrals
$33.00
$813.00
$1,429.00
$0.00
$200.00
$400.00
$600.00
$800.00
$1,000.00
$1,200.00
$1,400.00
$1,600.00
Detractors Average Customer Promoters
Total Customer Worth by Customer Loyalty1
(Buyer Economics + Referral Economics = Total Customer Worth)
1Based off of NGF’s Benchmark database
for all golf facilities nationwide
Assuming $45 Average Green Fee + Food and Beverage Per Round $7.00 + Pro Shop Sales Per
Round $3.86
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What’s a Loyal Customer Worth?
FactorOverall Course Conditions
Overall Value of Course
Condition of Fairways
Golf Course Design
Condition of Greens
Scenery and Aesthetics of Course
Condition of Tees
Friendliness / Service of Staff
Condition of Bunkers
Overall Quality of Golf Shop
Overall Quality of Practice Facility
Overall Quality of Golf Shop Merchandise
Pace of Play
Condition of Golf Cars
Amenities (clubhouse, pro shop, locker room)
Overall Quality of Golf Shop Apparel
On-course Services (restrooms, drinking water)
Food & Beverage Service
Tee Time Availability
Affordability
Loyalty Driver Ranking
1st
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Importance Ranking
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5th
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10th
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12th
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16th
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13th
20th
4th
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What Drives Loyalty May Surprise You
What if loyalty drops to 23%?
Total Buyer Economics would be: $1,840,998Total Referral Economics would be: $614,341Total Customer Worth would be: $2,455,339
Projections are based on:
•A facility playing 33,243 rounds
•Having a $45 average green fee paid per round + $7.00 food and beverage per round + $3.86 golf
shop sales per round
•Having 2,994 unique customers
At 33% customer loyalty for a typical facility:
Total Buyer Economics is: $1,856,886Total Referral Economics is: $812,759Total Customer Worth is: $2,669,645
A ten percentage point drop in loyalty would equate to a $214,306 loss in total customer worth or a 8% reduction in total customer
worth
Calculate ROI with NGF’s Revenue Impact Model (RIM)
The Industry’s Revenue Impact Model
The Industry’s Revenue Impact Model
The Industry’s Revenue Impact Model
Spend of Current Customers: Will leak in the future from attrition of current customers
Total Customer Worth Results from Assessment
Model Customer Worth With A 10% Drop In Loyalty
Ben Fowler, [email protected](561) 354-1628
NGF Report: #1 Way to Grow Revenues
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