Vice President, Corporate Marketing & Research Golf Digest Companies Jon Last Vice President, Corporate Marketing & Research Golf Digest Companies

Objectives – Looking To Our Best Customers For detailed understanding of their attitudes, motivations & perceptions and implications for growing the game Encompassing, but not limited to: Why they play? …Benefits and Motivations How much they plan to play in the future Their potential as missionaries/influencers for future generations The role that golf plays in the context of their social and professional lives Perspectives on golf’s future

Methodology The largest and most comprehensive study ever done on Golf’s Best Customers Core Golfers; those who have played 8-24 rounds a year Avid Golfers; those who have played 25+ rounds a year 2 Phases: 48 hours of one-on-one depth interviews in six U.S. markets (n=96) Quantitative online surveys (n=13,290) Large sample size allows for further market segmentation (regionally, avid vs. core; men vs. women; etc – with statistical stability and projectability)

Today’s Areas of Focus Introduction to the Game Drivers of Satisfaction and Enjoyment Key Attitudes about the Game Inhibitors to More Play Drivers of Increased Play: Concepts Drivers of Increased Play: Tactics The Future – Golf in the Year 2150 Implications and Take-a-ways

Introduction to the Game

Driven as Much by Friends & Business Associates as by Family Introduction to the Game Driven as Much by Friends & Business Associates as by Family Q. How were you first introduced to Golf? Parents/Spouse/Other Family (Net) Total Best Customers Friend/Work Colleague (Net)

Where Did You First Play Golf? Introduction to the Game Where Did You First Play Golf? Total Core Avid Best Customers Golfers Golfers % % % At a public course 59 57 60 At a par 3 or short course 14 16 13 At a private club 12 9 14 At a range 9 12 6 At school 2 2 2 23% 28% 19%

In-School Programs Are Embraced As Opportunities to Grow Participation Introduction to the Game In-School Programs Are Embraced As Opportunities to Grow Participation School programs are 2 of the top 6 initiatives tested in terms of their effectiveness for bringing new people into the game! Reasonably Priced Introductory Lessons at Driving Ranges Junior HS and HS Golf In PE Programs Free Golf Days At the Course Adding Women’s Golf Programs by Women and for Women Bundle New Equipment Purchases with Lessons Elementary School Golf In PE Programs Mean Scores (1-7 Scale) Total Best Customers

Introduction to the Game If Today’s Best Customers Are Indicative of the Future, We Need to Hook Them Younger! Q. When did you first learn to play? Total Best Customers

Drivers of Satisfaction and Enjoyment

Drivers of Enjoyment – Conditions, People & Performance Drivers of Satisfaction and Enjoyment Drivers of Enjoyment – Conditions, People & Performance Total Mean Score (1-7 Scale) Best Customers Well maintained greens & bunkers 6.34 Well maintained fairways & tees 6.28 The people you play with 6.24 Playing well on the course 5.84 Availability of practice facilities 5.68 Beautiful surroundings and scenery 5.74 Scoring well 5.65 Challenging course 5.65 Fast pace of play 5.39 Knowledgeable marshals and starters 5.38

Drivers of Satisfaction and Enjoyment Overall Enjoyment Is Less about Course Challenge & More about Conditioning Forced Choice: Do you generally prefer to play a course that is… 88% 12% Not as challenging but in very good condition Very challenging, not top condition Total Best Customers

Drivers of Satisfaction and Enjoyment Overall Enjoyment Is Less about Course Challenge & More about Conditioning Golfers were twice as likely to want “better course conditioning” over “better architecture and layout” as an incentive for them to pay 25% more for greens fees! Total Best Customers Better Course Conditioning Better Architecture/Course Layout

It’s More about Camaraderie and the People you Play With Drivers of Satisfaction and Enjoyment It’s More about Camaraderie and the People you Play With Q. Which is more important in driving overall enjoyment derived from a round of golf? Total Core Avid Best Customers Golfers Golfers % % % The people you play with 57 61 54 vs. How well you play 43 39 46 The people you play with 56 61 52 vs. The condition of the golf course 44 39 48 The people you play with 63 68 58 vs. The pace of play 37 32 42 Those with established and reliable peer groups are playing more than those who don’t have a “consistent” game. This was especially evident among young adults in their early stages of family formation and career growth.

Key Best Customer Attitudes About the Game

What Golfers are Thinking Today! Key Best Customer Attitudes About the Game What Golfers are Thinking Today! Agreement Ratings on 27 Statements Total Core Avid Mean Scores (1-7 Scale) Best Customers Golfers Golfers 1. There are no guarantees in golf 6.23 6.17 6.29 2. More young players like Tiger Woods and Michele Wie have been instrumental in growing the game 6.14 6.10 6.18 3. Golfers today are more athletic than they were 20 years ago 5.61 5.50 5.70 4. Golf is an intimidating game for beginners 5.55 5.46 5.63

Golf Is More about Leisure than Competition Key Best Customer Attitudes About the Game Golf Is More about Leisure than Competition For all but the best, golf was perceived as a leisure activity which has ramifications on what golf’s major competitors are for time and dollars Total Core Avid Best Customers Golfers Golfers % % % For me, golf is more about the competition 35 27 42 Or For me, golf is basically a leisure activity 65 73 58

…And It’s More about Preference for Course Variety Key Best Customer Attitudes About the Game …And It’s More about Preference for Course Variety 81% 19% I would rather play a variety of courses I would rather play the same course on a regular basis Total Best Customers

Golf’s Best Customers Aren't Necessarily Willing to be Ambassadors Key Best Customer Attitudes About the Game Golf’s Best Customers Aren't Necessarily Willing to be Ambassadors Less than 20% of golfers surveyed would be willing to commit to a program that required them to introduce at least one new person a year to the game of golf Less than 25% of Best Customers are “willing to contribute $25 a year toward development programs that would insure the future of the game” More than 45% of Best Customers agree (25% strongly) that they are “concerned that with all of the new players coming into the game, golf courses are going to be too crowded”

Inhibitors to More Play

Bad Behavior, Course Condition & Skill Level Inhibitors to More Play Bad Behavior, Course Condition & Skill Level Q. What inhibits your enjoyment of the game of golf? Total Mean Scores (1-7 Scale) Best Customers Behavior of players on the course 4.81 Course conditions 4.79 Cost 4.64 Time required to play 3.95 Tee time availability 3.89 My skills/performance 3.72 Elitist perception 3.21

Cost & Time – The Two “Crutches” Inhibitors to More Play Cost & Time – The Two “Crutches” Q. What inhibits your enjoyment of the game of golf? Total Mean Scores (1-7 Scale) Best Customers Behavior of players on the course 4.81 Course conditions 4.79 Cost 4.64 Time required to play 3.95 Tee time availability 3.89 My skills/performance 3.72

Inhibitors to More Play A Further Look At Costs Total Core Avid Best Customers Golfers Golfers So cheap that its quality would be questionable? $20 $20 $21 Such A bargain that you would definitely purchase it? $31 $30 $33 Starting to get expensive, but still worth considering? $55 $52 $57 So expensive that you would not consider it? $93 $88 $98

Going Beyond the Crutches Inhibitors to More Play Going Beyond the Crutches Crutch #1 Crutch #2 They Say They Mean Issues “Golf is too expensive” “I’m not getting value out of my experience” “I spend on lessons & equipment but I don’t get better” “My on-course experience doesn’t justify the time investment” “I don’t have enough time to play golf” Customer service; Pace of play; Conditions Too crowded; bad service; lack of improvement

Going Beyond the Typical Crutches Inhibitors to More Play Going Beyond the Typical Crutches Why Not More Golf..? There are No Guarantees in Golf #1 of 27 Attitudinal Statements

Drivers of Increased Play: Concepts

Success Breeds Interest and Increased Play Drivers of Increased Play: Concepts Success Breeds Interest and Increased Play Why are you playing MORE Golf in last two years? Total Best Customers #2 – My game has improved 50% 53% of Golf’s Best Customers agreed with the statement: “I would play more golf than I’m currently playing, if I got better at it!” Why do you expect to be playing MORE Golf in the next 3 years? Total Best Customers #1 – My game has improved 46%

Access To Playing Partners Can Also Increase Play Drivers of Increased Play: Concepts Access To Playing Partners Can Also Increase Play Why are you playing more often than you did in the past two years? Total Best Customers #3 – I have more golf partners to play with 41% #4 – My family is more involved with golf 19%

…Enhanced Service Would Also Improve the Golf Experience Drivers of Increased Play: Concepts …Enhanced Service Would Also Improve the Golf Experience Q. What would enhance your overall golf experience? Total Mean Scores (1-7 Scale) Best Customers Improved pace of play 5.98 Courteous and upbeat staff 5.92 Marshals who do their job 5.14

Growing the Game is More about Adding New Golfers Drivers of Increased Play: Concepts Growing the Game is More about Adding New Golfers Q. What do you think is more important to insure golf’s future? Getting Existing Golfers To Play More Those favoring new golfers spoke to: Junior golf programs Continuous focus on minorities and women 26% Bringing In New Golfers 74% Total Best Customers

Growing the Game is More about Adding New Golfers Drivers of Increased Play: Concepts Growing the Game is More about Adding New Golfers Q. What do you think is more important to insure golf’s future? Getting Existing Golfers To Play More However, a significant number of respondents took on a more protectionist approach 26% Bringing In New Golfers 74% Total Best Customers

Drivers of Increased Play: Tactics

Drivers of Increased Play: Tactics Q. How Effective Would The Following Be In Getting Golfers To Play More Frequently? Reduced Fees During Off-Peak Hours Discounted Golf Packages Less Expensive Golf Instruction Joining An Organized Golf League Family Golf Programs Top 5 Out of 9 Tested Mean Scores (1-7 Scale) Total Best Customers

Moving Golf Leagues to the 40% Mark Drivers of Increased Play: Tactics Moving Golf Leagues to the 40% Mark Total Core Avid Current Participation Best Customers Golfers Golfers % % % Any Leagues (Net) 35 26 44 Golf leagues not through work 26 16 36 Golf leagues through work 12 11 13

Golf Leagues – A Huge Opportunity Drivers of Increased Play: Tactics Golf Leagues – A Huge Opportunity Regionally test market new corporate golf leagues for workers Organize Sponsorship of National Golf League Championships – the Corporate Challenge Model Locally sponsored after school leagues in suburban middle class/affluent neighborhoods – like little league Local business golf leagues during off season like bowling, with banquets and trophies at the end of the season.

Innovative Memberships Programs: The Health Club Model Drivers of Increased Play: Tactics Innovative Memberships Programs: The Health Club Model Martin S - Los Angeles “Market golf like your local gym club.”

The Health Club Model: What Would It Take? Drivers of Increased Play: Tactics The Health Club Model: What Would It Take? Total Core Avid Extremely interested Best Customers Golfers Golfers Average Number of Rounds: 5.29 4.94 5.67 Median Number of Rounds: 5 5 5 Number of rounds you would prepay for in a month for unlimited golf

Drivers of Increased Play: Tactics Another Popular Option: Consumer Loyalty Programs with REAL, Attainable Rewards Total Extremely interested Best Customers Rounds to play to get one free Average Number of Rounds: 4.14 Median Number of Rounds: 5 Discount you would require for next round Average Percentage Off: 30% Median Percentage Off: 25%

Putting the Guarantee in Golf Drivers of Increased Play: Tactics Putting the Guarantee in Golf Satisfaction guarantees on: Lessons On-Course experience Supervised practice, not just instruction: Practice where pros/better players take notice and give tips On the range and on the putting green Practice logs and formalized training programs Certificates of progress to measure against improving scores Golf practice/socials regularly scheduled

Increasing the Value Quotient! Drivers of Increased Play: Tactics Increasing the Value Quotient! New stronger emphasis on marshalling for pace of play – develop certification program Improve and market condition of golf course, rather than challenge or slope index Promote heightened respect of game by new focus on obeying rules, replacing divots, ball marks and appreciation of tradition. Tiered pricing for effective yield management

What Do We Have To Do To Tip the Scales? Drivers of Increased Play: Tactics What Do We Have To Do To Tip the Scales? Develop more opportunities to play Promote leagues at work and at the course Increase golf course exposure at ranges and in schools Get children playing younger More tailored promotions and frequency loyalty programs

Promoting the Golf Family Drivers of Increased Play: Tactics Promoting the Golf Family Q. What other family members play golf? Spouse or Significant Other Child/Children

The Future – Golf in the Year 2150

Optimism in General – But Lots of Caveats Too! The Future: Golf in the Year 2150 Optimism in General – But Lots of Caveats Too! Best Mean Scores (1-7 scale) Customers 1. Golf will be bigger than ever as media and grass roots programs are successful in bringing new players in 4.84 2. Courses will become more challenging with tighter fairways, tougher greens and bigger carries to ward off the “power game effect” of technology 4.77 3. A greater percentage of the population will be playing golf 4.65 4. Golf will become more expensive due to the increasing cost of real estate 4.61

Implications

The Attrition Battle: Tipping The Scale of Critical Success Factors Implications The Attrition Battle: Tipping The Scale of Critical Success Factors Play More If Benefits > Detractors Play Less If Detractors > Benefits

Implications The Headlines Optimal price point for Daily Fee greens fees is $40 - $50 Leisure is more important than competition Course conditioning is more important than challenge Time issue is more about priorities and family; more rounds will eliminate the guilt factor There’s a group out there who is resisting Youth – if you get them when they’re under 12, they might leave…but they’ll come back later

So, What Will the Game Look Like? Implications So, What Will the Game Look Like? There are more affordable public facilities – $50 and less There are lots of leagues – for families, at work and through other social organizations More “well-conditioned” courses – less emphasis on penal design More school programs More monitored practice sessions More recognition & rewards for Best Customers