Y is for ‘Y’ use dynamic pricing & revenue management.
- Jan 21, 2018. 2 min read
Using variable pricing to move tee time inventory based on a simple demand curve seems the obvious choice when adjusting rates. However, when you factor in the human element and the limitations of technology you can see a number of reasons to be wary. For example, am I jeopardising my core customer base of members or regular visitors? Does frequent discounting encourage people to wait until the last minute and only buy at the lowest price? Am I damaging the brand perception of my golf course? I could go on…
In our experience all those factors are relevant, but with the right strategy they can be overcome by using dynamic pricing to increase revenue and profit. A few things really matter when looking at your green fee pricing strategy, namely:
Your headline green fee rate
How & when you adjust your prices
The time of play
Booking lead time
How the customer will respond to price changes
Perception of value for money
In today’s world of mobile bookings and price comparison websites, consumers (including golfers) understand why a business/golf course would alter its prices based on, demand, time of booking, time of experience, booking channel etc.
Once you have considered all of the above factors you can make a decision on whether dynamic pricing will suit your golf course, and then consider a strategy to implement it. The great thing is, if you are not sure you can try it and measure the results against historic sales.
One thing to consider is that dynamic pricing, channel management, revenue management and digital marketing are intrinsically linked. For example if you change a price of a green fee on Friday for the following Monday, how do you get that green fee to market in the most cost effective way? It is therefore important to have all of the processes in place to make it work.
At The Revenue Club these techniques are among a number of ways we increase revenue for golf courses, but with those human factors in mind. If you are interested in learning more then please do get in touch with us, we are always happy to meet with golf courses and discuss dynamic pricing (especially if it involves a good coffee!).