The Power of Premiums to Drive Profits!
When business is slow, many golf courses will immediately resort to discounting prices to keep traffic flowing. While, for a short time this tactic may work, it also brings with it many risks and pitfalls. Firstly, it can damage your reputation in the marketplace, especially if you are positioned as a middle-to-high end course.
Secondly, it can lead to course patrons continually wanting ever more and more discounts and incentives…even waiting for discounts to take effect before buying or acting.
A much better approach to use, resorting to discounts, is the use of premiums. This allows you to maintain your regular pricing integrity, and offers extra value if the customer acts in the prescribes time frame.
For example, a course owner in Southern Florida battled the seasonal heat and the rampant discounting of most of the other courses, by giving away free golf balls. Instead of dropping their rates from $40 to $25 like all the other courses in the area, this course kept their rates at $39. The upside to this strategy is that during this promotional period, players got a box of 18 balls free, every time they played. Since the boxes were brand name balls, the market, or in this case, the perceived value was about $25. But owner was able to buy them in quantity for about $7 a box. This kept his net profit at $32, or $7 a round above his competition and gives his guests a wonderful bonus, as well!
The following month he is planning a similar promotion, with a top-of-the-line golf glove. To take advantage of the offer, the players have to fill in a three-question survey about the balls and gloves they use. The owner doesn’t really don’t care about the answers. What he wants is their snail mail and e-mail addresses so he can follow up and alert them to similar promotions they might be interested in… reducing his future marketing costs.
The offer further serves the owner by helping him create a sense of urgency in that he lets the players know that this incredible offer is only good while supplies last, or for a limited period of time.
While people know discounts can be offered and extended at any time, they also realise that premiums can and run out! (just look at MacDonald’s and all their special, limited time, sandwich deals) So, to make sure they don’t miss out, they have to act NOW!
Premiums also work at higher levels. Keeping with the gold theme, recently a business owner conducted a campaign to “blast” an e-mail offer to 6,000 subscribers of another owners newsletter. The results were: four $2,000 ticket bundles were sold, each including over $500 worth of high perceived value, such as a free club fitting, a free video lesson, a golf hat, etc. The higher the perceived value of the premiums, the easier it is to say to your offer.
Premiums Work For Selling Everything!
You can also use premiums to drive your golf instruction business by including free golf books or instructional videos as part of your 20-lesson package. Try many different offers and combinations of offers to see which premiums perform best for your business. It’s only by such testing & measuring that you can really get a feel for what works and what doesn’t.
Ask your suppliers if they are overstocked in particular products that they’d like to get rid of at a steep discount, then use these items as premiums for your business. It makes a lot more sense than simply discounting…and it will give your product(s) a higher perceived value!
Consider…how you can use this approach in your business…and then let’s get together to explore the options.