What Lies Beneath?
Other times, we cannot uncover the truth because of the things another party may or may not elect to not share with us. I use the word uncover because sometimes information that is relevant for golf courses is made obscure by a vendor. And these vendors are withholding information (the true cash price of the golf management software systems, the cash equivalent to access the distribution network, or failing to reveal the actual price golfers pay to the vendor for rounds booked via barter) that is absolutely pertinent to the successful operation of a golf course.
Now this column is not about a woman putting on makeup, I’m actually here to talk about markup. The markup on software and services in the golf industry. But I can’t help but think about the similarities between women raising their eyebrows while applying concealer, and the golf course operator’s raised eyebrows as a result of sticker price shock.
Day-by-day I’m hearing more and more stories about vendors being concealers of the truth. The truth being the actual cash price needed to cover your use of their software systems or access to their distribution networks. Eyes bucked and raised eyebrows generally describe the reaction of golf course operators after the cash equivalent prices for software and distribution services (that were originally offered in exchange for tee time inventory under a barter arrangement) are finally revealed. The markup on the true cost of software and distribution services your vendors are currently offering you in your contracts is more often than not either overpriced or not even disclosed.
The prices are presented in such a way that only influences or steers golf courses to agree to the barter exchange. Not all vendors are guilty of this. But a growing number of them are using similar tactics. And for the vendor’s sake, if you put a pencil to it, they make much more when golf courses barter for software and services than when they elect to pay a cash or commission price (assuming those cash prices and commission prices are fair).
But why are vendors charging so much? I had three different people, (an NGCOA member, an NGCOA Board member, and a PGA professional) reach out to me in the last month trying to uncover the true the costs associated with their use of the software and services their vendors were providing them. In short, they were all either:
not interested in trading tee time inventory in exchange for distribution and software OR
trying to find a way to compare the costs difference between the two and ascertain whether or not the deals being presented were fair and equitable.
The current business practices of many vendors make this very difficult. And I haven’t even begun to broach the importance of vendors sharing the information about sales of barter rounds with the golf course. Perhaps a call to action is necessary. Which is going to be the first vendor that offers a cash price for software and services that is an accurate reflection of the true costs associated with these products? I will venture to say it is much lower than the $25-40k cash prices that I have personally seen. We need to develop a baseline for some industry standards for what some of these items should cost and compare that to what golf courses are actually paying. The same can be said for determining reasonable commission percentages. Which vendor, currently engaged in barter, is going to be the first to start sharing barter sales data with all of its golf course clients who use barter as a method of payment?
We’re always interested in hearing your thoughts and opinions on issues involving the marketing and distribution of tee times. I want to hear from both vendors and golf courses. To the vendors, what is your plan to make sure golf courses have the information they need to make informed decisions? To the golf courses, what method are you using to pay for your software or services? If you barter, how many tee times are you giving per day? Are you paying a commission percentage, if so what number? If you pay cash, what software and services are included? How did the barter and cash equivalent prices impact your ultimate decision on preferred method of payment? I want to hear from you, contact me at [email protected]