Experiment with dynamic pricing spells success at Fox Creek
Atlanta Course Breaks Price Barrier
Fox Creek Golf Club in the Atlanta suburb of Smyrna, Ga., has a loyal following among recreational public golfers and an enviable physical location. Close to the city and surrounded by member-only clubs, Fox Creek and its sister course, Legacy Links, are joined by a first-rate lighted practice facility to form a unique and appealing golf complex. In 2016, the group that manages it, Mosaic Clubs & Resorts, made $2 million of improvements to the property.
Playing to a par of 62 over 3,800 yards, Fox Creek fits the “executive course” mold but offers room for a player to hit driver on many holes, so it has a broad appeal. All the same, the course was like so many others—stuck with certain usage patterns that had the net effect of putting a lid on revenues.
The fact that a typical player can get around this layout in under three hours probably contributed to the impulse-based booking pattern. As a result, Fox Creek was saddled with smaller than desired booking windows, as players reserved their tee times very late or same-day in habitual style.
As for price, the rigid perception of what a round at Fox Creek was worth was part of the local team’s mindset, including general manager Chris Brown. In 2017, the Fox Creek team decided to upsize its relationship with GolfNow by moving to the GolfNow Plus level of service, a move that began to disrupt fixed notions of how much golfers might pay to play.
The weekend rack rate of $34 had always seemed to Brown like a ceiling he would bump his head against. But as he’s discovered, true dynamic pricing—rolled out carefully and gradually—reveals the lack of price sensitivity on the part of at least some of your golfers, some of the time. When Fox Creek began using GolfNow Plus, good things started happening.
“If you told me we would get someone paying $40 to play here I’d have told you no chance,” Brown admits. The actual high-water mark for the Fox Creek course has reached $46, which stunned its management team all the more.
GolfNow Plus Specialist Yanni Vretas, however, has seen this scenario many a time. “GolfNow trained me to set realistic goals, but along with that we’re also taught to always put up aggressive stretch goals,” he explains.
A tee time is perishable, so common thinking always has been to adjust rates downward. This was true of Fox Creek, which originally posted one morning rate and one afternoon rate (for weekday and weekend, respectively) and simply auto-priced downward as the lead time for a particular day got closer.
“When you only move rates down, you’re not really using the tool to its fullest extent,” says Vretas. “You’re not on board with dynamic pricing if you’re not also willing to raise the rate and break the ceiling.” When you do get on board with it, you and whomever is working with you are wise to spend the early weeks paying careful attention to tee sheet utilization, working with our tools and exploring adjustments. “All through February, March and April, I was on the phone with Chris every week,” says Yanni, “tracking utilization and price moves.”
A big part of this effort was a set of tactics designed to encourage golfers to reserve their tee times sooner. “We started by removing all day-of-play discounts,” says Vretas. “We were trying to train the golfer to book early, and then an interesting thing happened. They really resisted booking earlier, so we just bumped up the price on those final days prior, above rack rate, and day-of bookings didn’t go down. Instead, revenue went up.”
The moral of the story is that dynamic pricing can be used to address all the patterns a course wishes to change, and it may produce results that weren’t necessarily first choice, but at the same time have highly rewarding consequences. Fox Creek wanted the “when” factor of bookings to change more than it has, but it happily settled for changing the “how much” factor.
And if you do it right, nobody pushes back.
“I haven’t had a single person book online and complain,” reports Brown. “It’s fascinating to watch the tee sheet fill up and see the different prices people pay—they walk up to check in and you kind of match the person with the rate. When it’s up at the high end of the scale, and they’re all smiles, you say to yourself, ‘This guy doesn’t really care how much it’s costing him.’” That’s basically what happens at hotel registration desks and airline counters, too, and it’s a big revelation for any course.
Brown’s old mantra of saying Fox Creek is a “$34 golf course” isn’t heard much these days. That’s because habits and patterns can change, for customer and manager, if the science of dynamic pricing is allowed to work its magic.