I’m always looking for good business lessons in places I frequent on the Web. Hopefully that explains why, dear readers, you get an awful lot of golf and food references as we explore the world of doing smart business.
Today it’s golf and a lesson we can get from a post on Golf.com which provides a blog post that demonstrates how smart businesses operate. Unfortunately, it does so by showing us an example to the contrary.In a nutshell, the piece describes the author’s desire to play a round of golf. The course, which is in Florida, wanted to charge him $158 to play on a Monday at Noon, which is definitely NOT prime time and the course was empty. Of course, he could have paid ONLY $78 had he been a Florida resident – still high for a public course in a not-great area. He opted to save his money and hit the driving range, where he paid for 60 balls and only received 47 in his bucket.
The business lessons are pretty obvious and we’ve discussed them before. First: even in good times, a business can’t charge whatever it wants, only what consumers feel is fair value for the product provided. It doesn’t mater if your costs to provide the product are more than consumers will pay (we have an entire auto industry that found that out). Charge too much and watch your market share drop. The empty course on a beautiful day should demonstrate that pricing might need some addressing. As one might imagine, there is no shortage of golf courses in Florida and most public courses don’t charge anything like $158. Yes, Pebble Beach is a public course and it charges $495 but it’s arguably the best course in the country, not a “nice” course in Miami (by the way, it’s worth $158 just to walk around and see the views) and it’s surrounded by top courses that charge nearly as much.
Second: when you do provide a product to someone, you can’t ever provide less than what was expected by the customer. If the sign in the shop says there are 60 balls in the bag, there MUST be at least 60 (it’s always nice to over deliver, by the way).
Third: if you DO screw up, don’t count on it being kept quiet. Not only did your poor judgment on pricing and your dishonesty on product delivery end up on a widely read web site, but there is an amplification effect as my post and others that may pick up the piece demonstrates. Congratulations – as people search for the name of your course or “golf courses Miami”, the odds are that the author’s negative experience will be right there in the results to kill your business. As a golfer, I can tell you that I use blog search to find comments on courses before I book new ones. The post already has a few dozen comments and these often get picked up in search as well.
We can go on for quite a while about this – how to test correct pricing, how to find the author and fix your reputation, the compounding effect of the “hidden” lost money not spent on food, drinks, and pro shop but this post is getting long. Ask yourself if you’re running a smarter operation than the folks in Florida. If not, why not?