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June Bonus OtR - Customer Relationship Management, Eat or be Eaten

Volume 18 • Bonus

Customer relationship management enters
the "eat or be eaten" realm

Greetings readers, we're offering a "bonus OtR" issue this month provided free of charge to our entire distribution list because it's a topic that we believe is of increasing significance in our industry and rapidly evolving.  We hope you enjoy the read and, while there is no obligation of any type, if this additionally convinces you that you want to be "in the know" on the monthly topics we explore and analyze, you can subscribe to Outside the Ropes ($130/yr, 12 issues, includes access to the historical archives of over 100 previous issues) by using the following link:
https://www.pellucidcorp.com/reports/outside-the-ropes-newsletter
On to today's topic, researched and related by colleague Stuart Lindsay...In the rapidly evolving world of technology, customer relationships and privacy, we offer three maxims to consider for our golf course owner/operator readers and, for that matter, any small business in 2019 and beyond:

  • Email is definitely not dead
  • It’s evolving and more important than ever
  • Your customer contact info is fair game
Anybody who thinks email is a technology “antique” is not paying attention. Not only is email usage projected to increase 24% over the next 5 years; 48% of GenZ (14-18) and 36% of Millenials (19-34) report they intend to increase their email usage over that same timeframe (statista.com). They are apparently finding out that email is a better form of communication for certain correspondence than truncated Twitter messages, public photo sharing on Instagram or Snapchat and a host of other business related functions. 

More important is how email data is being “harvested” and used. It goes way beyond communication – it is the “user name” associated with social media accounts, e-commerce shopping destinations, website registrations and more. All of that activity is being tracked – clearing your history and/or private browsing are basically “after the fact” functions. Google, your mobile providers and other browsers still know where you go and are aggregating what you do. Of course, they also know where you live.

The important issue is that email addresses are now being used to create individual “profiles” – available for the estimated 245 Million email users in the US. The lid got blown off this dirty little secret with the exposure of Cambridge Analytica and its supposed mis-use of Facebook data in the 2016 presidential election. Congressional hearings and lipstick adjustments to privacy policies cannot change that the fundamental revenue models for Google and Facebook depend on the sale of their profile analytics.

At the heart of the matter, we know email addresses are valuable. As we have pointed out over our data dissections of 100s of golf courses – higher spending for those golfers in your email database has ranged from $35 to $175 per player. The problem is that the “harvesters” know your customer is a golfer, has visited your course and will sell that information (email and/or social media) to your competitor down the street. 

An enterprising golf course using this type of “profiling” can find a website registrant on Facebook and pay to have their ads appear on that registrant’s news feed. It gets worse from there – another golf course can buy that “golf interest” and pay to get their messages delivered, too. Guess what? As a Facebook user, I can’t block those messages.

At least on my email platform, I get some SPAM protection and can block senders. The SPAM protection is OK in some cases; but sometimes identifies stuff I want to see or am expecting to see. The blocking is only effective until the Nigerian prince uses another email address; but it’s better than what I get on Facebook or YouTube.

Golf courses also get challenged by the anti-SPAM function. Many courses have simply amassed a “master” email list over some years – if they are not updated, the delivery process can be hindered by “blacklists” assembled by Internet Service Providers and/or SPAM filters on individual email platforms. We also suspect that some major email platforms get preferential delivery treatment compared to some of the smaller or integrated email platforms commonly used in golf. We recently did a test of a portion of Pellucid's current master distribution list and saw dramatic delivery and open rate improvements by using one of the major platforms.

This stuff is very sophisticated and increasingly complex. The path of least resistance would be to keep doing things the way you do them now and/or wait for the government to fix things. They did that when they made Microsoft unbundle Internet Explorer; but that simply opened the door for Google. Any attempt to regulate Google and Facebook will be difficult and/or simply give rise to another big data alternative using “edge” application platforms.

In the meantime, Google controls over 80% of the search traffic on mobile devices and over 70% of overall search. 83.5% of the GenZ kids use gmail and over 77% of Millenials do, too. Facebook still controls over 70% of all social media traffic. We were also surprised to see that 63% of email users only use one email address. And when you add another 24% that only have 2 email addresses; this concentration actually makes the profiling that Google and Facebook are selling more accurate. (statista.com)

In the movie “We Were Soldiers”, Sergeant Major Basil Plumley (Sam Elliot) gives young war correspondent Joe Galloway a blood-stained M-16. Galloway protested and said “but sir, I’m a non-combatant” and Plumley responded saying “there ain’t no such thing today, boy.” His next sentence was “gentlemen, prepare to defend yourselves”. Galloway survived, helped write the story and was given a military honor for gallantry.

Unfortunately, customer disintermediation is at the heart of many current marketing efforts. Uber has dramatically impacted the value of taxi medallions and Amazon has invaded countless markets and offers their AWS platform to enable more companies to divert customers from one shopping source to another. My interest in a shirt at Brooks Brothers got me offers from 6 other shirtmakers. Most of you know that certain 3rd Party golf service providers actively engage in practices aimed at “re-directing” customers from one course to another.

The other inconvenient truth is that golf courses that have refrained from the temptation of bartered 3rd Party services or stopped using them are now subject to similar disintermediation efforts aided and abetted by Google, Facebook and a variety of other services. This is further compounded by customers who don’t care that Uber doesn’t make any money and had a disappointing IPO – they got a cheaper ride. They don’t care that Google is making a fortune selling their personal information – they got directions when they needed them and found a new restaurant Google advertised on their way to another.

In the end, you can’t afford to be a non-combatant. As much as we may dislike the use of heretofore personal information for what basically amounts to marketing anarchy, the harsh reality is what it is – and you will have to defend yourself.

We did a test of one of the companies we found that offers “profiling” related services in late 2017. They took a 20,000+ email database and matched over 50% using their process. Besides indicating a need to “clean up” a database assembled over several years, their results gave them Age, Gender and geographic dispersion for over 10,000 of their customers. This company and another we know using similar processes will even produce the “profile photo” from Facebook for an individual email address when they find a match.

For many years, Pellucid has used a “big data” company as a resource for our Player Acquisition Programs. Jim Koppenhaver and I recently had an update session with them in response to renewed interest in those programs. They have stepped up their ability to append and “profile” email addresses with success in programs for both big and small companies wanting to upgrade their email effectiveness.
  • Email validation and append for “profile” match
  • Basic “profile” Report
  • Count of profile “lookalikes” in your area

They will perform this process for up to 10,000 email addresses for $1,000 – a much lower rate than other systems we have seen where the profiling is part of a larger array of services such as public Wi-Fi and CRM programs. There are volume savings available for larger databases as well. An enhanced “profile” process of the 5 standard attributes is available for an additional $200.

You also get an option to license the use of the “lookalikes” emails they find for a full year – up to 5,000 for a modest $600 per year. The “lookalikes” will also be de-duped from your list as part of the process. In addition, we will review your profile data and compare it against Pellucid’s library of golf participation data (Age, Gender, etc.).

Probably the best part of this service is that we have worked with our vendor exchanging and de-duping hundreds of thousands of email addresses over the years. There is no risk of disintermediation or trading “golf interest” for “profiling” services – your information is secure and will not be aggregated.

This is a very “low margin” exercise for us – when you factor in the time and cost of Pellucid data review, we actually lose in the process. However, we think this is a service that should be used and can be harnessed to help golf course operators better cope with the realities of today’s marketing environment.

We know that “profiling” will be most effectively used when integrated with a course’s master customer database using retention metrics, customer valuation and measuring the ROI of promotional efforts. Pellucid’s ability to provide “weather neutral” performance evaluation is our main focus in this process.

We also know that POS vendors would serve their users better by integrating with the profiling process. For individual course operators, POS vendors and certain other technology service companies; we stand ready to assist by sharing our codes and analytics in order to help golf courses defend themselves

I just got my third “Thursday Night Ladies League” promotional email from a local course. Are they sending it because they think my wife might play golf or because they don’t know my gender?

@Copyright 2019 Pellucid Corp. All rights reserved. Quotations permitted with prior approval. Material may not be reproduced, in whole or part in any form whatsoever, without prior written consent of Pellucid Corp.