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May 2019

What Lies Beneath

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By Jared Williams
Managing Director , GOLF USA TEE TIME COALITION

Sometimes, we cannot uncover the truth because of things another party may or may not elect to share with us. I use the word uncover because sometimes information that is relevant for golf courses is obscured by a vendor.

These vendors are withholding information such as the true cash price of the 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.

Day-by-day, I’m hearing more and more stories about vendors concealing the truth about the actual cash price needed to cover use of their software systems or access to their distribution networks. Eyes bugged and raised eyebrows generally describe the reaction of golf course operators after the cash equivalent prices for software and distribution services are finally revealed. The markup on the true cost of services your vendors are currently offering you is more often than not either overpriced or not even disclosed.

The prices are presented in such a way that 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. 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).
I had an NGCOA member, an NGCOA board member and a PGA professional reach out to me in the last month trying to uncover the true costs associated with their use of the software and services their vendors were providing them. 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 cost difference between the two and decide if the deals 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 vendor is going to be the first to offer 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 $25,000 to $40,000 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 clients who use barter as a method of payment?

I want to hear from both vendors and golf courses on issues involving the marketing and distribution of tee times. 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? Contact me at jwilliams@teetimecoalition.org.

 

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