The hidden cost of loyalty programs

Cardholder programs are a popular way to reward loyal customers, and to bring in extra revenue for your golf course throughout the year.

But the extra money from these programs doesn’t always equal extra profits. In fact, many golf courses are unknowingly losing out on thousands of dollars because of their loyalty programs.

That’s because loyalty programs effectively discount your most popular hours, which have the biggest effect on your bottom line.

Why discounting your best hours hurts your bottom line

Did you know that 20% of your tee times drive 50% of your total green fee revenue? These are your Power Hours: popular tee times with the highest demand (eg 8am on Saturday). You can – and should! – charge more for them, because they have the greatest impact on your overall revenue.

However, cardholders are quick to snap up your Power Hours. If you allow booking 7 days in advance, they’ll reserve that 8am on Saturday the second the booking window opens. Plus, they pay a discounted rate for a time you could charge more for due to high demand.

Because there are plenty of regular public players out there who’ll happily pay full price, or more, to play at 8am on Saturday. But they don’t think to book until Wednesday. By then, the time isn’t available so they’re forced to play another time or look elsewhere.

You lose revenue every time this scenario plays out.

Cardholders aren’t your most profitable customers

Your cardholders may be loyal, but they’re not always profitable. On average, they’re spending less than other public players. If your program has a low annual fee, members only have to play a few rounds of golf to get deep discounts.

Also, cardholders are more likely to be no-shows. They don’t spend as much money in the pro shop. They bring their own peanut butter sandwiches.

It’s important to balance your loyalty program with your business’ revenue goals. Here are some simple adjustments you can make to protect your revenue, and still offer value to customers.

1. Offer a percentage discount, rather than a fixed rate
   

   Instead of giving your cardholders a fixed dollar rate for tee times, consider offering them a percentage discount, like 20% off. This enables you to raise your rates for everyone during busy and peak hours, while still offering value to your cardholders. (Just make sure your discount isn’t too deep.)

2. Create a program that discounts off-peak hours
   

   You could reimagine your loyalty program to offer deeper discounts for your off-peak hours. This is a great option for price-conscious golfers. For example, you could charge a low monthly fee for unlimited play after 3pm. This would give your course an additional stream of recurring revenue, while protecting your most valuable hours.

   Not sure what your discount should be? Our Price Check tool helps you instantly arrive at the best price for any hour, based on your historical data.

3. Offer a special membership site for exclusive deals
   

   Members-only pricing is a great way to nurture customer loyalty. You could offer a members-only booking site for special deals on certain tee times. This puts you in control of which hours are discounted and for how much. Golfers get more price choices, so they can pick the rate that works best for them.

Be loyal to your Power Hours

Rewarding customer loyalty is important, but not at the cost of your revenue growth. It’s critical to understand how your loyalty program impacts your overall revenue mix.

There are many other ways to add value to cardholders without discounting your most popular tee times, because they make up 50% of your green fee revenue.

Protecting these high demand hours is the key to maintaining a healthy, sustainable business.

Get Exclusive Revenue Growth Tips Sent Straight To Your Inbox

• Actionable insights you can use every day
• Tips on how you can generate more revenue
• Resources to grow your direct-to-consumer business