Retaining Current Vs. Attracting New Golfers: Practices among the Class A Carolinas Professional Golf Association Membership

Abstract

Golf rounds declined in the U.S. from 2001 to 2004. The southeast region of the country has started to show increases in golf rounds. A possible explanation for this turn-around can be found in the theory of reasoned action. A survey among Professional Golf Association Class A Members in the Carolinas section of the PGA shows the utility of retaining current avid golfers is greater than the utility of attracting new golfers. Implications for managing golf clubs nationally are discussed.

Introduction

The golf industry in the U.S. has recently been stagnant or declining in the number of rounds of golf played annually. The National Golf Foundation (NGF) has reported a national decline from 2001 to 2004 of -4.5% (NGF, 2004). A similar trend (-4.3%) has been observed in the southeast region during that period. Some observers (Graves, 2006; Harrack, 2006) have suggested that concentrating on getting avid golfers to play more rounds is a better approach than trying to attract new golfers to a club.

More recently, the NGF (ngf.org, 2007) is reporting a national upturn in golf rounds of +0.8% with the southeast region showing a robust growth of +4.5%. The question of why the southeast region is doing so well is one of management priorities. The theory of reasoned action (Hawkins, Mothersbaugh, and Best, 2007) provides a framework for understanding how managers of business enterprises make decisions. Professional Golf Association (PGA) members who run golf club enterprises are no different than the chief executive officer of a Fortune 500 company in the decisions they need to make. A business manager needs to identify how to grow the business and make a profit. Operational goals have varying priority and utility in this effort, and golf club managers have intensified their commitment to growing rounds of golf (Staw, 1981).

Theory of Reasoned Action

The theory of reasoned action specifies the decision-making task confronting PGA members who manage golf clubs. Historically, psychologists (Baron, 2000), game theorists (Von Neuman and Morgenstern, 1972), sociologists (Homans, 1961), economists (Elster, 1986), and marketers (Johnson and White, 2004) have all embraced theory of reasoned action concepts.

The concepts embodied in the theory of reasoned action include: 1) bounded rationality (only a few evaluative criteria can be considered simultaneously implying limited capacity), 2) making trade-offs (applying the evaluative criteria to viable alternatives in a compensatory way), 3) the superior option is revealed as the one with the highest utility value to the business manager. Thus, the PGA member managing a golf club must decide what is important and which of those important goals will lead to the best business outcome.

The theory of reasoned action has a measurement methodology known as utility calculations (Baron, 2000). The basic concept, evaluative criteria, involves various dimensions, features, or benefits sought in attempts to solve a specific problem, such as reaching operational goals at a golf club. Managerial decisions involve an assessment of one or more evaluative criteria related to the potential benefits or costs that may result from a decision of which goals to pursue.

Thus, evaluative criteria are typically business activities associated with either benefits desired by managers or the costs they must incur. Depending upon the business situation, management evaluative criteria can differ in terms of type, number, and importance. Thus, a study of business management decision making involves an evaluation of both the importance of the business activity and the business performance resulting from specific criteria. Determining an evaluation of business activity options can be accomplished in two ways: 1) direct methods where PGA members are simply asked about the importance and satisfaction with performance concerning business activities they may use in a particular decision situation, and 2) indirect techniques, where it is assumed PGA members will not or cannot state their views on these issues. The approach taken here is direct assessment described below in the methodology.

The purpose of this project was to conduct a survey of PGA Class A professionals who manage golf course enterprises in the CPGA region to determine what their priorities are regarding operational goals they see as related to stimulating growth in rounds of golf played at their clubs.

Hypothesis

It is hypothesized that PGA Class A Members managing golf clubs in the CPGA will consider the utility of retaining current golfers to be larger than the utility of attracting new golfers.

Methodology

The Class A PGA members survey provided data concerning golf course management practices utilizing an e-mail recruitment and VOVICI (formerly WebSurveyor). The issues involved include:

1.    Making the questions easy to understand and answer;

2.    Measuring the relevant concepts such as importance and performance;

3.    Asking appropriate demographic questions;

4.    Having a relevant e-mail list;

5.    Having a short and effective invitation;

6.    Sending the e-mail invitation at an effective time; and

7.    Using follow-ups as necessary.

Faculty handled items one through four above and utilized WebSurveyor to create the survey instrument. The e-mail recruiting list came from the PGA; thus it was relatively fresh and accurate. Items five, six, and seven were handled by the students after instruction from faculty.

There were 72 students in two Retail Management classes who participated in fielding the PGA web survey. Each student had a list of approximately 20 PGA members to contact through e-mail. The first round of e-mail invitations produced few completed survey responses without an endorsement letter. The second round of e-mail invitations included an endorsement letter from the Secretary of the Carolinas Section of the PGA. In addition, a specific subject line was provided that said, “A Message from Karl Kimball, Secretary of the Carolinas Section of the PGA.” Students were also required to copy the Retail Management professor on all outgoing e-mails to keep track of their efforts so they could receive course credit and so the PGA respondents could receive a summary of the results after the responses were analyzed.

This approach to survey control ensured that e-mail invitations were sent out in a timely fashion, had an appropriate and inviting subject line, included an endorsement by an appropriate source, and offered an incentive for participation in the form of a summary of the results (Goodman, 2006). As a result, 107 completed surveys were available for analysis.

Measuring business managerial judgments of the importance of and satisfaction with performance on specific operational goals can include rank ordering scales, Semantic Differential scales, or Likert Scales. Likert Scales were used here.

Using a Likert Scale to measure importance and satisfaction with performance against operational goals in the theory of reasoned action applied to golf club management comes in the form of a calculated utility score. Here, utility is defined as the product of each operational goal’s rated importance score and its rated satisfaction with performance score measured on a Likert Scale. For this study, it is the importance and satisfaction score associated with retaining current golfers as well as attracting new golfers using the Importance and Satisfaction Likert Scales below.

Importance

5 = Extremely Important
4 = Somewhat Important
3 = Neutral
2 = Not Very Important
1 = Not Important At All

Satisfaction with Performance

5 = Very Satisfied
4 = Somewhat Satisfied
3 = Neutral
2 = Somewhat Dissatisfied
1 = Very Dissatisfied

In addition to measuring importance and satisfaction with performance concerning retaining and attracting golfers to the club, a series of demographic items were included in the survey such as type of course, golf population served, tenure of the course manager as a Class A Member, and the time at the current club spent by the Class A Member of the PGA.

Results

Sample Characteristics

The results of the demographic items appear below and indicate the survey produced a wide variety of clubs where the PGA members are located.

Type of Course: The majority of PGA members were at either private (34.7%) or semi-private courses (28.7%), with some at public courses (17.8%), resorts (11.9%), or other type of courses (6.9%).

Golfing Population Served: Almost half of the PGA members described their golfing population as mostly permanent residents (49.5%) with few serving either mostly out-of-town visitors or mostly part-time residents (6.9% each), while close to a third (30.7%) have a golfing population balanced among these three groups.

Tenure as a PGA Class A Member: Few PGA members in the survey have been in Class A for 5 years or less (8.9%) or between 6 and 10 years (14.9%). Almost half have been in Class A between 11 and 20 years (48.5%) and less than a third have been in Class A for more than 20 years (27.7%).

Time Served at Current Club: Over a third of these Class A members have been at their current club for either 2 to 5 years (37.6%) or more than 10 years (38.6%). A minority have been in place either 6 to 10 years (18.8%) or 1 year or less (5.0%).

Importance of Retaining Current Golfers and Attracting New Golfers

The results for the importance of reaching the operational goals of attracting new golfers and retaining current golfers appear in Table 1. PGA members rated both operational goals as extremely important.

Table 1: Means and Standard Deviations for Operational Goal Importance

Operational Goals Mean Response Standard Deviation
Attracting New Golfers 4.64 0.622
Retaining Current Golfers 4.80 0.531

Satisfaction with Performance in Retaining Current Golfers and Attracting New Golfers

Results for satisfaction with performance with operational goals appear in Table 2. PGA members were somewhat satisfied with performance against the two operational goals.

Table 2: Means and Standard Deviations for Satisfaction with Performance in Reaching Operational Goals

Operational Goals Mean Response Standard Deviation
Attracting New Golfers 4.10 0.572
Retaining Current Golfers 4.19 0.741

Utility of Retaining Current Golfers and Attracting New Golfers

Results for the calculated utility scores for the two operational goals appear in Table 3. A paired-t test was done on the mean responses for the two operational goals and indicates retaining current golfers has significantly higher utility to the PGA members compared to attracting new golfers (t [90] = -2.44, p <.02 two-tailed).

Table 3: Means and Standard Deviations for Utility in Reaching Operational Goals

Operational Goals Mean Response Standard Deviation
Attracting New Golfers 19.02 3.85
Retaining Current Golfers 20.09 4.32

A final issue concerns whether or not reaching these operational goals is producing an increase in rounds played and how that utility is realized and that increase is accomplished.

Change in Rounds Played

A series of survey items dealing with number of rounds played per year at the club was also included. These items included total number of rounds played, number of rounds at a discounted price, number of rounds as part of a golf and lodging package, and number of complementary rounds. Table 4 shows the change in number rounds reported by the PGA members.

Table 4: Percentage Reporting Changes in Rounds Played

Percentage Reporting Changes in Rounds Played Increasing Stable Declining
Number of Rounds Played Per Year 45.9% 42.9% 11.2%
Number of Rounds at a Discounted Price 24.4% 50.0% 25.6%
Number of Rounds as Part of Golf and Lodging Package 22.8% 63.3% 13.9%
Number of Complimentary Rounds Played 6.5% 76.3% 17.2%

The net percentage of PGA members reporting change in rounds played can be found by subtracting the percentage reporting a decline from the percentage reporting an increase in the number of rounds while ignoring those who are stable. Thirty-five percent of the PGA members reported net rounds are increasing. This increase was attributed to golf and lodging packages bringing more golfers to the course (+9%). In addition, declines in discounted (-1%) and complementary rounds (-11%) were reported. The figure below displays these results for the net percentage of PGA Class A Members reporting changes in net rounds played.

Net Percentage Reporting Change in Rounds Played
Conclusions and Implications:

Figure 1. Net Percentage Reporting Change in Rounds Played

Conclusions and Implications

Support for the hypothesis that CPGA Class A Members would show more utility for getting additional rounds from current golfers compared to attracting new golfers indicates they have solved the problem of declining rounds of golf in accordance with the theory of reasoned action. These club professionals realized that getting additional rounds of golf from golfers who patronize their clubs is more effective than trying to attract new golfers with discounted rounds and complementary rounds. Any costs associated with golf and lodging packages were more than compensated for by a substantial increase in rounds per year.

For the PGA membership to increase rounds nationally, the focus should be on retaining current avid golfers to increase rounds and get them to the club by offering golf and lodging packages and reducing discounted and complementary rounds to attract new golfers. Growth can be restored in this manner for golf rounds in the U.S.

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