If you have ever reviewed an income statement you probably already know the difference: top-line revenue refers to gross sales — the “top line” on an income statement. And bottom-line refers to net income—the “bottom line” on an income statement. More specifically, the bottom-line number is income after deducting all expenses such as labor, marketing, maintenance, taxes, etc. Growth at the top or bottom is, of course, always welcome news for business owners and investors.

Understanding Top-Line Growth

Golf course service providers such as industry consultants, advertising agencies, and other marketing partners often make promises regarding their ability to deliver top-line revenue growth. After all, top-line growth can usually be achieved with a well-funded, short-term promotion or a longer-term marketing initiative. However, to realize this top-line growth there are necessary expenditures, like consulting fees, ad buys, partner fees, and other costs such as promotional products, special discounts, even the additional labor needed to implement and support the effort.

Growing Bottom-Line Revenue

Promises made regarding bottom-line revenue growth are less common. After all, most initiatives can have significant costs as discussed above, and after subtracting these costs from any top-line growth, it may result in little or no change to the bottom line. And in some cases, a poorly conceived or implemented initiative could hurt the bottom line. When the final ROI numbers from an initiative are realized, stakeholders are often left disappointed and looking for something new.

After reviewing industry articles by several prominent golf marketers and consultants, there seems to be a consensus on the three primary ways to grow green fee revenue at a golf course: increase play, increase the frequency of play, and increase the transaction value. The primary methods offered to accomplish these goals are to engage in new or better marketing and promotional activities. However, operators could benefit greatly by focusing on a less costly and more effective method of accomplishing all of them: price optimization.

Strategies for Bottom-Line Revenue Growth

Offering the right price, at the right time can positively affect play, the frequency of play, and the transaction value. Changes to prices that result in more sales or higher-priced sales generate more revenue. And making price changes generally involves little or no additional costs, so any gains pass directly to the bottom-line. The challenge, of course, is knowing when and what price changes to make that will move the needle in the right direction.

Almost every golf course engages in some form of price optimization today. It may be something as simple as a seasonal rate schedule, or something more sophisticated, like real-time price changes driven by automated pricing algorithms. In recent years, there has been an evolution in automated pricing methods—the most advanced resulting in huge impacts to the bottom-line; sometimes exceeding 30%.

Has any marketing initiative at your course ever come close to delivering a number like that?

If you haven’t considered implementing a price optimization solution at your course, now may be the time. Even simple changes can produce impressive results. However, courses using Forecaddie’s TruDemand technology, have proven to significantly boost their bottom-line.

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