2. TODAY’S AGENDA 5 Minutes - Importance of Issues
Ruffin Beckwith - Golf 20/20
10 Minutes - Retention Data
Ben Blake - Links Corp
15 Minutes - Frequency Programs
Mike Capizzi Frequency Marketing Group
35 Minutes - Group Discussion/Ideas
10 Minutes - Develop Recommendations

3. VISION: ATTRACTION & RETENTION
3.0 Million
3.5 Million
3.0 Million
2.5 Million

4. WHY PEOPLE LEAVE Time 62% Family 38% Cost 29% Health 18%
No one to 16% play with
Too difficult 12%
Source: 2001, Golf 20/20 Segmentation Study

5. INDUSTRY REPORT-FRE QUENCY
Source: 2002, National Golf Foundation

6. ANNUAL CONTRIBUTION TO THE GOLF ECONOMY, BY SEGMENT
Source: 2002, SRI International

7. RETENTION AND FREQUENCY
Ben Blake
President and CEO
LinksCorp

8. WHY IS RETENTION IMPORTANT?
The Environment Today - What Has Changed?
Supply and demand imbalance
More courses
No growth in the number of rounds and players
More recreation/entertainment choices
Slowing economy/less spending

9. WHILE ATTRACTION IS IMPORTANT… Retention is Key!
It costs up to five times as much to attract a new customer as it does to keep one
A dissatisfied customer will tell 8 to 16 people about the bad experience
A satisfied customer will stay loyal if you build a relationship
The real value of a satisfied customer is how much that customer spends over a lifetime

10. 15% OF ALL GOLFERS ARE “BEST” CUSTOMERS
6.6 million
Avid Golfers (25+)
7.6 Million
Best Spenders ($1,000+)
2.5 Mil
4.1 Mil
3.5 Mil
10+ Million (40%) are “Important” Customers
4 Million (15%) are “Best” Customers
Source: Golf 20/20

11. LinksClub 2001 RESULTS 2001 - LinksClub Highlights
% Rds/ Spending/ %
Members Members Rds Mem %Rds Spending
A - Medallist 4,742 5% 15.5 $549 28% 29%
B - Reward 6,692 7% 7.2 $243 18% 18%
C - No Reward 2+ Rds 35,288 36% 2.8 $94 38% 36%
D - No Reward 1 Rd 43,109 44% 1.0 $35 16% 17%
E - No Rds 8,561 9% 0 $5 0% 0%
Total 98, % 2.7 $93 100% 100%
LinksClub Highlights
267K LinksClub Rounds Played at 17 LC Public Courses
LinksClub Rds were almost 50% all Public Rds at 17 courses
$34.08 per round per member spending

12. “BEST” CUSTOMERS DRIVE ROUNDS & REVENUES
The top 19% of members (A & B) represent 54% of rounds and 56% of revenues
Segmentation shows that the top 6% of members are extremely valuable to LinksCorp
% OF MEMBERS
% OF ROUNDS
% OF REVENUE
Segment
Medallist (A)
Reward (B)
No Reward 2+ Rounds (C)
No Reward 1 Round (D)

13. RETENTION BY SEGMENT
Medallist members maintaining a high year-1 retention and 2-year retention rate
TOTAL MEMBERSHIP RETENTION
Segment
Medallist (A)
Reward (B)
No Reward 2+ Rounds (C)
No Reward 1 Round (D)

14. REWARDS PROGRAMS WORK Positive Segment Migration in 2002 2001 2002
Medallist (A)
Reward (B)
No Reward 2+ Rounds (C)
No Reward 1 Round (D)
Total

15. LinksClub… WHAT HAVE WE LEARNED?
You can influence customer behavior and retain your best customers!
If we can get a LinksClub member to play his/her 2nd round in 30 days or less, they will likely play 3 more rounds. If not, we may lose them.
Highly efficient - marketing costs have gone down 25% (2001 vs. 2000) while revenues have gone up.

17. SUCCESSES IN FREQUENCY MARKETING
Mike Capizzi, Vice President
Frequency Marketing Group

18. GLOBAL QUESTIONS
We have national programs to promote “Trial”, do we need a national program to promote “Retention”?
Should one organization have “Retention” as an objective?
NewCo (a new organization similar to The First Tee
Existing organization (PGA of America, for example)
Can we indentify and track our “best customers” on a national basis?

19. GLOBAL QUESTIONS
Would you be willing to help fund a national “Retention” program
Fee added to each paid round
Flat fee per course
Ideas?
If funding is an issue, would you be willing to “sell” the “rights” to a for-profit company to promote retention at your facility?
Nike Golf Schools (for example)
National Customer Loyalty Program (for example)
Other ideas

20. GLOBAL QUESTIONS
What are the things we can do as an industry to impact frequency?
Is it feasible to consider national frequency programs? State-wide?

22. COLLOOUY
Presents
MICHAEL T. CAPIZZI Loyalty Marketing Programs: Key Considerations for the Golfing Industry November 15, 2002

23. A Lot of Jargon Frequency Marketing Relationship Marketing
Loyalty Marketing
One-to-One Marketing
Customer Relationship Management (CRM)
COLLOOUY
www.
.com

24. Definition of Relationship:
“The voluntary exchange of information and value between the brand and the customer with the mutual expectation of gain.”
COLLOOUY
www.
.com

25. What is Loyalty Marketing?
Loyalty Marketing is the effort to identify, maintain, and increase the yield from Best Customers through, long-term, interactive, value-added relationships.®
COLLOOUY
www.
.com

26. Why Bother? To identify In order to increase marketing effectiveness
In order to re-allocate marketing expenses to improve efficiencies
In order to learn who your customers are, what they want from you, what other courses to play
To leverage the resulting database in partnership marketing agreements
COLLOOUY
www.
.com

27. Why Bother? To maintain It is cheaper to retain than it is to acquire
New growth without retention is no growth
The cumulative effect on profitability is proven
COLLOOUY
www.
.com

28. Why Bother? To increase the yield
By adding frequency of play to your course vis-à-vis other alternatives
By adding incremental spend to each visit
By adding “derived” yield from guests who play at the invitation of your customers
All of the above
COLLOOUY
www.
.com

29. Loyalty Marketing Can …
Improve customer retention (LTV)
Increase share-of customer
from competitors
via cross- / up-sell
Provide a framework for relevant dialogue
COLLOOUY
www.
.com

30. Loyalty Marketing Can’t …
Fix a fundamental problem
Generate quick profits
Bring in lots on new customers fast
COLLOOUY
www.
.com

31. Where Does it Work? Highly competitive markets
Parity is perceived to be high
High fixed, low variable cost
Perishable inventory
Purchase behavior can be tracked
Purchase (payment) cycles are frequent
Management doesn’t want to compete on price
COLLOOUY
www.
.com

32. Why Loyalty Marketing Works:
All customers are not created equal
Share-of-customer is a more profitable pursuit than share-of-market
Improve earnings by shifting resources
Proactively manage relationships
Relevant dialogue creates competitive advantage
It builds brand loyalty, not “sale” loyalty
It breaks the tie when all other things are equal or closes the gap when the difference is small

33. Loyalty Marketing Programs
Marketing programs that recognize and reward customers based on tracking their individual purchase behavior.
COLLOOUY
www.
.com

34. Benefits “Man is an economic animal in search of self-importance…”
Brian Woolf
Customer Specific Marketing
COLLOOUY
www.
.com

35. Benefits – Soft vs. Hard Recognition (Soft) Reward (Hard) Emotional
Intangible
Exclusive
Reward (Hard)
Rational
Tangible
Free
COLLOOUY
www.
.com

36. The Perfect Blend of Incentives
5% Factor
Compelling
Hard Benefits
Promotional Currencies
Tangible Rewards
“I get my money’s worth”
Defining
Soft Benefits
Recognition
Personalization
“They know I’m important”
The Value Proposition
COLLOOUY
www.
.com

37. Why Use Promotional Currency?
To create the perception of value and take the focus off price
To create a sense of “equity” and a barrier to exit
To establish a relevant dialogue
To provide funding flexibility
Because they “break”
COLLOOUY
www.
.com

38. Points vs. Discounts
$1 Discount
$1 Points
COLLOOUY
www.
.com

39. Pursuing the “Perfect” Blend
Perceived Value
Marginal
Good
Ideal
Actual Cost
COLLOOUY
www.
.com

40. Closing Thoughts Loyalty programs will work in the golfing industry
A shared cost approach is the best way to go
Track and reward all behaviors across all payment methods
Offer a strong value proposition for the golfer
Some technology investments will be required
Rapidly evolve to “other peoples money” via partnership marketing
Measure, measure, measure and stay focused on the ROI
COLLOOUY
www.
.com

41. For more information contact:
COLLOOUY
For more information contact:
Michael T. Capizzi
COLLOOUY
www.
.com