Joe Assell, the founder and CEO of GOLFTEC, reads the stories that paint a picture of doom and gloom in the golf industry and shakes his head.
“If golf is dying, I hope it stays like this because it’s going great for us,” he said.
GOLFTEC is the world leader in providing customized and biomechanics-based golf instruction, and the leading employer of the PGA professionals. It’s also one of the best success stories in the golf industry over the last two decades, with revenue increasing 98% since 2010 and seven straight years of same-store sales growth.
When Assell founded the Denver-based company in 1995, he set a goal of operating 10 instruction centers. GolfTEC expects to open its 185th store this year and in 2016 gave more than 900,000 lessons.
“We’ve gone from $10 million to $84 million in sales in just the last 10 years,” he said. “There isn’t anyone in golf who can show you charts like that, at least that we’re aware of.”
How GOLFTEC has achieved success — and turned challenges into opportunities — provides lessons that others in the industry can learn from, too.
Better Golfer = Better Customer
GOLFTEC operates under a simple philosophy: an improving golfer is a happy golfer.
That philosophy is supported by an NGF study that shows handicap correlates to spending. Those who score below 90 on average represent about one-third of all golfers, but account for 49% of money spent, whether it be equipment, apparel or lessons. Those who score 90 or above make up 66% of golfers and account for 51% of spend.
A GOLFTEC survey found a 96% success rate among its students, with an average improvement of seven strokes.
“It turns customers into brand ambassadors for us,” Assell said, noting that 40% of business last year was from referrals.
The coach is the lifeblood of everything the company does, which is why GOLFTEC invests heavily in training its staff. It’s called GTU — GOLFTEC University — and every PGA pro, no matter his or her previous level of experience, has to go through its month-long programming before being allowed to teach anyone in its centers.
“We can talk about pace of play and the difficulty of longer courses, but if golfers aren’t getting better they simply won’t do it more,” said Tim Ummel, co-founder and managing partner of The Golf Tank and a GOLFTEC board member. “If you improve your game, you will play more and if you play more you will buy more clubs, more balls, spend more on green fees, apparel, travel, whatever it may be. So the takeaway is if you truly spend the time to make someone better, it is a proven fact that they will on a residual basis want to do that more.”
Listen to Your Customer
GOLFTEC facilities use video-based, motion measurement technologies to help golfers understand proper swing mechanics and positions.
With technology rapidly changing, what is new today is obsolete tomorrow. Larger monitors exposed a weakness in the resolution of the GOLFTEC cameras used to film the swing of its students. This was the No. 1 complaint from the company’s customers. So GOLFTEC searched for a better camera to show high-speed video and motion crisply and clearly in an indoor environment. When it couldn’t find one that met its criteria, GOLFTEC worked with a group to develop its own proprietary camera. It recently launched a nationwide project to replace all the cameras and upgrade the lighting in every one of its centers to provide enhanced resolution for both in-bay playback during lessons and online viewing post-session.
“They’ve had a vision for what they want to be since Day One, and focused on a model to help people,” said Jeff Price, chief commercial officer for the PGA of America. “They use technology to help golfers understand how to improve and show them how to get there.”
Making Lemonade out of Lemons
GOLFTEC had a long and fruitful partnership with Golfsmith, with 81 of its facilities located within Golfsmith stores. But when Golfsmith didn’t emerge from bankruptcy in October, GOLFTEC lost 50 locations in the span of 45 days (31 locations remained open as Golf Galaxy stores after the Golfsmith sale to Dick’s Sporting Goods).
This could have been a death blow to a less nimble, less financially-secure company. Instead, it gave rise to the biggest building boom in GOLFTEC history — 35 stand-alone facilities among the 40 under construction. The accelerated rollout of new stores makes good business sense when you consider that historically the stand-alone business model has been more successful than the Golfsmith model. New stand-alone facilities won’t be constrained by Golfsmith’s business hours, are able to sell their own equipment, and are situated in more convenient locations. “Golfsmith stores were singles and doubles while stand-alones are triples and home runs,” Assell said. “Momentum is this intangible that matters in business. If we were struggling it could’ve been a much bigger issue. We seized it as an opportunity, not as a problem that could bring us down.”
Prepare for the Future
“You can’t ever plan for the gut punch we received from Golfsmith,” Ummel said.
Fortunately, GOLFTEC hasn’t rested on its laurels. It didn’t have a crystal ball that warned of a challenge looming, but in the summer of 2015, it started a process to ensure its growth and strength in the marketplace continued unimpeded.
“Let’s not wait for our company to have a dip and then wake up and say, `Jeez, we need to change things, or we need to evaluate our business.’ Let’s make changes before we get worse, if that makes sense,” Assell explained. “So we said let’s close our eyes and pretend we wake up in 2021 in a GOLFTEC. What should the consumer want? What is the competitive environment going to be? What is the technology environment going to look like? What do we need to do not to fall behind?”
This led to a decision to overhaul the brand (including a modernized logo), improve the in-center design and update its technology, including the new lighting and state-of-the-art camera. The timing of Golfsmith’s demise proved to be fortuitous for GOLFTEC.
“When Golfsmith went under we were ready to build these 35 new ones all in this new design,” Assell said. “If it had happened a year earlier, we might have built them all the old way and had to retro-fit, which would have been terrible.”
Seeking Out the Next Growth Opportunity
The ‘E’ in GOLFTEC stands for equipment and the fourth big company initiative is to enhance its component club-fitting program.
With retailers like Golfsmith and Sports Authority disappearing, GOLFTEC sees an opportunity it can exploit. All GOLFTEC centers will implement the new fitting system, with partner True Spec Golf, within a year.
“Only about 10 percent of golfers take lessons, but all golfers need golf clubs and there are a lot who just buy a driver every year,” Assell said. “We think we will see a lot of new faces coming through our doors.”
Merchandise accounts for approximately 20% of GOLFTEC’s revenue and company officials think it should be at least twice that.
So is a happy golfer really a better customer?
For more than two decades providing a well-trained coach, access to premium technology and a convenient location has made for a winning combination.