Like it or not, there is a “new norm” for the golf industry. If you own or manage a golf course and you want to thrive in the golf business or worst-case scenario at least be financially solvent over the next 10 years you had better suspend your ego for a few minutes and read this monthly tip with an open mind. The golf industry has to see its hardest hit yet but it is coming and coming real soon. I have been predicting trends in the health club industry and then in the golf industry since the early 1990s. Each time I have been spot on and it is not because I think I am Nostradamus. I am far from a genius either but I am lifelong student of Marketing, Sales, Psychology, Economics and History and here is what the data shows.
First you must accept the fact that spending habits of everyday people are what drives the economy; spending habits of groups or segments not individuals. Everyone does not fall into this matrix but we, as a group, definitely do and as a group, we do predictable things. If you want to know the year you are most likely to die just ask your insurance provider and after they ask you a few generic questions they will be able to give you a very good guess.
This is all based on data that has been collected and analyzed over centuries. Similar data is available for the economy as well, if you simply know where to look and more importantly, how to interpret the data.
- We join the workforce at an average age of 20,
- We marry at an average age of 26,
- We have kids at an average age of 28,
- We buy a small house at an average age of 31,
- We buy a larger house between the ages of 37-41,
- We are in a position to have the greatest disposable income (known as our peak spending years) and we tend to start buying luxury items, sports cars, go on expensive vacations, etc. at an average age of 46,
- This peak spending will continue up to the age of approximately 53 and then after that our spending habits will start to drop off dramatically because we then start saving for our retirement,
- We enter retirement at an average age of 63,
- We have accumulated our greatest net worth at an average age of 64,
This is not an educated guess; this is a demographic and economic reality.
The reason why we experienced a great rush of golfers in the 90’s is because we were in the middle of the Baby Boomers’ peak spending years. Baby Boomers are the largest generation in the history of US and that is why golf experienced enormous growth in golfers which inevitably sparked the growth in the construction of golf courses. Because of this “ME” generation (Baby Boomers), we had the huge influx of golfers. This is exactly why we have the so-called “experts” claiming we have too much inventory and not enough golfers. This statement is hogwash. There are plenty of golfers out there; the challenge is most golf course managers, golf pros and golf course owners are living in the past and are too stubborn and egotistical to accept reality.
In the year 2008, Baby boomers completed their spending cycle and started to slow down on big purchases e.g. cars, homes, luxury items. By now (2016) the last rush of big spenders is either retired or saving for their retirement. This is why we have never seen an up-turn in our business as an industry since the decline (which really started in 2003) even though most economists say the economy is getting better. And by the way, I strongly disagree with this statement as well.
It is my belief things will be terrible (much worse than 2008) for the next decade because there is no other generation who can possibly fill this enormous void in spending over the next decade due to the largest generation in history retiring or dying; and even if I am wrong, the Millennial is the generation we are going to have to court and capture which is the most difficult consumer to date. Generation X can’t fill that vacuum because the “Me” generation had far fewer children which equates to far less spending. But here is the upside to the X generation; Generation X tend to buy similar products and services as those of their parents.
I am not trying to predict the future. I am just stating the facts. In no way is this Golf Marketing Monthly Tip meant as a warning of Armageddon. In fact, it is a roadmap to financial freedom. People always say “knowledge is power”, but I disagree because a lot of us know what we should do but never do it. Case in point, we all know we should eat healthy, exercise and get at least 6 to 8 hours of uninterrupted sleep every night…but do we all follow those simple steps to a healthier, longer, happier life; of course not, even though we know we should. On the other hand, action coupled with knowledge is ultimate power.
The business of golf has changed and it will be a decade or more before it gets anywhere close to where it was in decades past. If you don’t change your antiquated business model and re-think your inadequate marketing your business will die with the Baby Boomers (which at this point, is most of your existing membership). Forget marketing concepts of the past because they won’t work with Millennials and do not be conned (convinced) by the false narrative, into thinking, “the only way to engage Millennials is through e-marketing, Social Media or other forms of digital marketing”. Most Millennials change their platforms year to year jumping on the latest coolest platform. Yes, a working knowledge of digital marketing is essential but first you must create a model which offers specifically tailored products and services to the buying patterns and spending habits of this generation (not generations of the past); then, and only then, can you decide on the best vehicle to deliver the message/offer.
In closing, the smart play is to partner with MMC® because we are the innovating experts with a proven track record since 1991 in targeting the hard-to-reach market with our no-risk/self-funding (the campaign completely pays for itself and we require no up-front fees), data-driven, performance-based (we are paid solely on a success basis), turn-key (we design and manage the entire campaign from conception to close-out) golf marketing company.