Thursday, June 30, 2016

SERIES: An Insider’s Look at Modern Club Design – Part 4

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Marketing Influences vs. R&D Capabilities in Golf

By: Bob Renegar

So we’ve talked about the three tiers of OEM’s with their respective R&D capabilities and challenges. The question is, how well does the business of golf equipment sales reflect the realities of R&D capabilities - aka what products really are the best.

Truth be told, not so well.  

The marketing influences in golf can be stronger than the best product integrity and R&D – we would be naive consumers to think otherwise.

What About the OEMs and the Pro Tour Players?

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Despite golf equipment being the tools the Pro Tour player uses to make his living, most Tour players know surprisingly little about their equipment (there are clearly some exceptions).  These guys could help themselves so much if they just got more studious about it, and put the equipment variable to work for them as an advantage.

The truth is, though, these players are so good they can hit just about anything you give them. The equipment advantages for them are smaller than they are for the rest of us, but still significant and largely unexplored – they could be significant enough to be the difference between winning and a top 10 finish. They will figure it out sooner or later.

The Tour Player will generally play whatever product his contract sponsor brand gives him and fits it into his game with a launch monitor optimization for the driver-shaft configuration, then put his shaft preference and “set-up” specs into his irons. At this level, the Tour Operations personnel (acting as custom builders and fitters) are critical for each getting the most from the other. It all happens in the Tour Trailers next to the driving range at each event site and in the OEM’s R&D labs.  

Beyond that, for the Tour players, equipment choices may be about looks or feel, but there may also be other “incentives” that are on the table for the player to use some particular equipment - perhaps whatever pays the best.

Offer They Can't Refuse

There is not much said about it because it exposes the politically incorrect “profit motive” in professional golf, but would you believe that some Tour players are paid tens of thousands of dollars annually just put a putter in play? With a “bonus pool” at year’s end for uninterrupted usage? Or even more to put a driver in play? Did you really think they used them because they thought they worked best?

How can we blame them? They are all self-employed. They go to work every day with NO guarantee of a pay day. In fact, nearly half of them on any given week go home with empty pockets (in terms of money winnings).

Ever heard of a PGA Tour “bonus pool” or other player incentives?

Behind the Curtain

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Players have various types of contracts with their major OEM sponsors. A few marquis players will have “full bag” contracts where they are obligated to play products only from their sponsor, but these deals are fewer nowadays. More often, we see deals for a bag and driver or bag and irons and hat, and the player is “open” on whatever is left.

Truth is, practically every part of the player’s equipment can be a “pay for play” contract. These deals are cut over drinks or in the agent’s office or over the phone, but any given player will most likely have several significant and many lesser deals for equipment usage, and they are probably all quite different.

“Deals” come in many forms. They might range from fixed annual contracts at any scale to a one week deal to wear a hat or play a putter. There are Win-Place-Show pure incentives and “win bonuses”, and there is even weekly “tee up” money with “bonus pools” for play over extended periods – usually for the season. There are driver deals, ball deals, putter deals, glove deals, hat deals, apparel deals, bag deals, car deals, watch deals – you name it, anything goes.

I have seen in years past checks passed out on the driving range and in the locker room, but that is rarely the case any longer, because it does not look good. It is more about quarterly wire transfers nowadays.

The weekly Darrell Survey tracks this contract compliance on Thursday of each week’s competition and reports it to the OEMs who pay for subscriptions to the Darrell report each week. What happens in any given player’s bag after Thursday is often quite interesting too, as sometimes a player’s equipment may change for Friday, Saturday, and Sunday play.

These same “deals” also exist on all the other Tours, but they are predictably for lesser amounts and are fewer in number – an obvious function of marketing value-added and visibility.

Undue Influence

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Yet there persists this extraordinary influence of the Pro Tours on sales and marketing with the golf consumer – the impact of the old golf biz truism that “what wins on Sunday sells on Monday”. Is it not time we got beyond Pro Tour player usage validations being the ultimate seal of approval for a golf club design the recreational player cannot hit anyway?  

Instead give me objective testing and data using skilled recreational players! 

And yet, I can hardly recall ANY equipment successes in my career that were not preceded with Tour usage. If you want to sell premium golf equipment, you must still validate it on the Pro Tours.

And therein lies the true value of a Pro Tours Program for the equipment manufacturer, because it does still make a difference to what is sold on Monday. Witness the website reporting on Mondays regarding “what’s in the bag” for the winners from the day before . . . and what sells in the golf shops during the week that follows.  

What is the Golf Media’s Role in All of This?

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In my view the golf media has been extraordinarily disappointing for the golf consumer, as they muse and reflect upon the new equipment offerings that appear in the market place each season and then award them “stars” or “gold medals”.  They really aren't helping us much in making better equipment selections to improve our golf games.  And their reporting has evolved very little over the years with improved sophistication for their equipment reviews (except now they have web sites and videos).

Should the media equipment evaluations instead be more quantitative and objective? Should they be geared specifically for the consumer? Should these equipment evaluations be free from the influences of media advertising dollars?  

Practically no one in the media is giving us anything more than “stars” or “medals” as quantitative feedback! And worse, they keep talking about “feel” or cosmetics instead of comparing quantifiable performance measurements... but that day may be coming soon.

The golf media is for the most part failing in their responsibility to the golfer-consumer to test and report objectively which golf equipment offerings actually work better. Counting qualitative “stars” from consumer test panels is hardly a meaningful quantitative performance evaluation, especially since most clubs get all the available stars anyway.  

The business reality for most of the golf media, though, is that their operating revenue comes largely from advertising dollars. It would take some very principled reporting indeed to risk judging your largest advertiser’s product as a mediocre performer.

The ultimate impact that the Internet will have on golf equipment sales is yet to be determined. Fitting complicates most “consumer direct” sales strategies from the OEMs, as does the consumer’s desire to “feel” and hit the club prior to purchasing it. But the pervasiveness of selling directly to the consumer with other consumer products is obvious – it will in time find a place in golf.

A Better Way Forward

The most valuable impact of the Internet to golf equipment may ultimately be as a source of truly objective and quantitative performance evaluations for new products – ultimately forcing the OEMs to do a better job with new product development.

The longstanding void of objective quantitative performance evaluations for the consumer (with appropriate performance parameters) will in due course be filled. And the great influence of the Pro Tours and a sycophantic media on equipment sales will, over time, diminish.

New equipment “authorities” are appearing (particularly on the web), but performance parameters and criteria will need to become more standardized for each different product category so that they ultimately translate to lower scores.  

Qualitative Media BS is of little value – quantitative and objective data are required with meaningful performance measurements.

Maybe You Should Think About It Too . . .



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