Loyalty schemes: What’s the point?

Many retailers offer a loyalty card to customers to keep them coming back to the shop. Loyalty schemes can help give your customers an emotional connection with your brand with every transaction: deepening loyalty, and encouraging them to spend more.  However, it’s essential to choose a program that will resonate with your customer base, or your business could miss out.

Loyal customers spend more money in shops than new ones.  Plain and simple.  A recent study by Harvard Business School found that a customer’s 6th purchase was, on average, 40% larger than his, or her, first: with the 8th being 80% more. Loyalty pays.

Loyal customers don’t just help your business because they spend more, however. According to Bain and Co., a 5% increase in customer retention can increase a company’s profitability by 75%. And, if those numbers don’t make you sit up and listen,  a Gartner Groups study showed that 80% of a company’s future revenue will come from

Continue reading “Loyalty schemes: What’s the point?”

What Can We Expect in 2019?

If I had a crystal ball, I’d have won the lottery a few times and would be sitting on my own island trying to work out how to take out Amazon. However, since I now have you on to my blog page, the least I can do is give you a few thoughts on what could happen in the world of golf retail in 2019.

Well, 2018 will have to go down as a pretty interesting year. England did well in a football tournament; Europe thrashed the US in the Ryder cup; the Beast from the East caused total havoc, only to be followed by a heatwave that got us all in a sweat. Then the political system imploded, as the Parties forgot about voters amidst the Brexit maelstrom: leaving the general public in a spin, and delivering the worst Christmas sales for 10 years.

So, what does any of this mean for 2019 and what can we expect for the golf industry in the New Year?

Continue reading “What Can We Expect in 2019?”

Get Set for 2019

With the build-up to Christmas well and truly underway, most retailers are trying to maximise their sales and take advantage of all the festive fervour. I’ve seen some great promotional efforts in golf clubs around the country. It’s amazing who has a special Christmas suit!!

While most people won’t start thinking about 2019 until long after the turkey has been eaten, there’s no harm inputting some thoughts together in preparation – especially as we all want next year to be “the best one ever”. Again.

Principle Planning

The main area for consideration here is planning. In Crossover’s recent Pro Shop Retail  Tips advice article, we brought up, what is, for many, the dreaded topic of budgeting.  This may not be the most popular area of business, but it really is a key part to running your store. I’d encourage all business owners to spend a few hours over the coming weeks to make sure they have all their numbers together. If you want to have a really Happy New Year – you need to have some idea of what you intend to do.

“While ignorance is bliss, that just isn’t sustainable for retailers”.

So, before you get a bit too merry on the sherry, let’s put down a few points. Now, I’m not going into too much detail about how to make a budget, but I will give you some good planning principles, along with suggestions as to how things might go next year. At the end of this, you should have a basic list of all your income, broken down by category, and list of supporting costs by category, and perhaps supplier.

Okay, so let’s assume you’ve thought about a budget but haven’t actually put it to paper. Even if you have one, there are some good basic pointers below. Remember this is supposed to be a basic budget so its not all-inclusive.

To start with, write down a list of your key sales areas – eg shop, lessons, retailer and commissions. Then you need to look at your costs – eg shop stock, staff time, rent and other business costs. Assuming this isn’t your first year, you should have some historical data to work with from your EPOS system, or accountant.

The aim at this stage is to estimate, using prior knowledge, what you’re going to make and what it is going to cost. Once you have those two numbers, you want to check that the income is bigger than the costs. If it’s not you’re starting off on a bad foot and need to reconsider or re-plan.

Budget Basics

Assuming the initial mathematics work out okay,  you should have the basic income and cost outlined. You now need to flesh this out and consider how each area is going to change.

Starting with retailers. For most, this will be fixed so there isn’t much to consider, other than an annual increase, (and hopefully not decrease). Commissions may be based on green fee sales, so perhaps put some numbers down to show how that will be generated.

“You are buying stock to “SELL TO CUSTOMERS”, not for decoration”.

For lesson sales, break down what you made this year: How many lessons were given, and at what unit cost. Ask yourself, are there are any ways to increase the number of lessons, or perhaps, increase the value of lessons. When was the last time you put up your prices? It may also be worth considering changing the lesson format to make it more profitable. Can you tweak the length and price of the lessons? Perhaps you could give the same number of 45 minute lessons over the year, as 30 minute, but charge 50% more. The most important thing to consider is what is going to change and how do you plan for it.

Finally, there’s the Retail. For most, this is where the biggest figures are, in terms of sales and cost. Importantly, this is where lots of the costs comes from too. Even if you have lots of staff, the shop stock will probably be the biggest outgoing. The average shop currently sits on between £35K to £40K of stock. So, during the year they’ll probably spend over £85,000 on buying stock to sell to customers. That’s a lot of money.

Key mindset point here – you are buying stock to “SELL TO CUSTOMERS”, not just as decoration.

Thinking about spending £80K or possibly £200K, or £300K, (depending on your shop), can produce some anxiety, so to try and reduce the sleepless nights, let’s put a few more details down in the budget.

To make the plan more solid, we need to look at how the sales are made up: which categories are we going to sell and what changes will there be? Most retailers will look at last year’s sales in their EPOS system to take a view as to what they’ll do next year. Ask yourself, what’s going to change, or influence, this year’s sales?

We all want to make more money, so how can I do that? In the main, there are 2 ways to make more money – create more sales and do this with less costs. So, if we want to increase sales, what are we going to change to make this happen? Attract more customers, stock a wider range of products, or perhaps improve your sales technique?

Also consider what might cause a reduction in sales this year. Are there any changes going on in the club or shop?  You should aim to increase sales by at least 3% – why? Because that’s the average rate of inflation, and costs in general will be expected to increase at that rate. So, if you don’t increase your sales by at least this – you’re going backwards. If you’re going to make some changes, then why not aim for 10% increase in sales, and then work out how you can achieve that.

Another thing to consider next year is Brexit. If it happens, we’re due to leave the EU at the end of March. This might cause some jitters for the economy and affect consumer spending.

Having established your total sales figure, you’ll need to break it down into the various categories that you stock in the shop, (eg. balls, bags, irons, putters, shirts, etc). This’ll help you identify what, and how, you’re going to sell. It’ll also help you focus on any particular tactics that you’ll need to employ.

For example, if you’re struggling to see how you’re going to lift your sales, look at your strengths and weaknesses. If you’re any good at selling a particular category, it’ll probably be easier to make increases in that category, than others. However, if you don’t stock a category that may be selling in other stores, that could be an opportunity.

When looking for some basic tactics, consider this. For the average on course retailer, making an additional glove sale, in every 5 sales, would increase their total sales by nearly 10% by the end of the year. Little changes can have a big impact.

Having worked out the sales you’re going to do’ you need to work out what it’s going to cost. For this, you’ll need to know the margin you make. So, for example, if you sell £15,000 worth of irons (inc VAT) at a 22% Gross Margin, you’re going to need to buy £9,360 worth of irons.

Now, complete this for all categories. You should end up with a list of categories and a column of sales values, margins and costs.

Buy Better Next Year

When considering changes to for next year, it’s worth remembering what happened this year. Irons had a pretty crazy year in 2018, with the 3 biggest sales months ever recorded in April, May and June. Will consumers continue to buy, or will they switch some of their spend to other categories. Woods might get a bit more attention this year, with big new launches coming from at least 4 of the main brands.

Once you’ve got the costs, there’s one more thing to work out: how much do I actually need to buy. This is a critical part of the planning for two reasons. 1 – can you get the cash to fund it? And, 2 – What do I already have in stock that I should try and sell through first?

Once you’ve got a view of your required purchases and stock levels, it might be worth going through another activity to review your current orders. Most retailers will have completed their commitments for next year, but now is a good time to review the past year and make sure those commitments are correct. If it looks like you have a lot more in stock, and a lot more on order than you need, (based on your new budget), then don’t be afraid to pick up the phone and talk to your suppliers. It’s in their interest that you sell through their products.

I was recently asked by a customer if he should cancel all his pre-orders. Definitely not – it depends on your circumstances and stock situation. Unless you’re in a real mess, with more than a years’ worth of stock, you’ll need more stock to come in. However, make sure it’s planned, and that you haven’t over-committed to multiple brands. It may be that you need to have a situation where you pre-order a certain amount with some, and then a flexible arrangement with others.

“If you get a great deal on something you can’t sell – it’s not a great deal!”

Other factors should be considered, such as stock availability and upfront deals. Whatever you do, please consider that you should be turning your stock over at least 3 times in most categories. Also, be disciplined when you do need to commit to buying stock. Don’t get dragged into buying stuff that you don’t need, or haven’t planned for. If you get a great deal on something you can’t sell – it’s not a great deal!

So that’s about it for the basic budget. This exercise should take no more than about an hour, and, at the end of it you should have a clear outline of your total sales and outline costs, along with some thoughts on which areas to grow, or focus on. You should also have some indication as to whether you have the right stock levels, and if your future commitments are reasonable, based on your current position.

Remember, if nothing else, you have something to measure your success by. When you come to next year, you can see how close you were to your plans. Finally, one more thought: It’s pretty well proven that if you measure something, it gets better.  Need I say more?

 Wishing everyone a Happy Christmas and Prosperous New Year.



When a Brand goes Direct to your Customer

Thanks to Head PGA Pro Michael McCrudden from Roe Park Resort in Northern Ireland, for this Tweet:

“Hi Phil, any chance of a blog post on how to deal with suppliers going direct to consumer and cutting out/by-passing bricks and mortar retailers like the green grass PGA Pro?”

This is a great question, and one that seems to be a really hot topic at the moment. Whilst I can’t provide you with a silver bullet, I might be able to provide some insight in to why brands are doing it, why consumers like it, and how retailers can respond.

So, here goes!!

Why Do Brands Go Direct?

It’s only since we have moved in to the digital age that brands have been able to interact directly with the consumer. In the past, manufacturers relied on distributors selling Continue reading “When a Brand goes Direct to your Customer”

3 Reasons to Put on a Sale

Discounting stock for the wrong reasons will cost your business dearly. In fact, without a strategy in place, sales can even be dangerous to your business: lowering your Average Sales Price (ASP) and reducing overall profits. To maximise the opportunities of a sale, retailers need clear objectives, says Phil Barnard.

Some might say that you don’t need a reason for a sale. We know customers love a bargain, (who doesn’t?), and sales are something most retailers do intermittently throughout the year.  However, sales need to be planned as part of your business strategy, and with specific reasons in mind. Putting on a sale because ‘it’s that time of year’, could have a negative effect on your bottom line.

So how can you ensure your sale will bring the maximum benefits to your business?

Continue reading “3 Reasons to Put on a Sale”

Lessons from Amazon

Times are a changing, and in the world of retail, things move very quickly indeed. The online (clicks) and offline (bricks) continue to battle for the consumer spend and, of course, each has its pro’s and cons. Bricks and mortar provide the experience and immediate gratification of being able to touch and see: whereas online stores have seemingly infinite choice, and greater convenience, enabling you to shop from your armchair.

If the online channel is of interest to you, then there is one certainty – Amazon has changed the marketplace for ever.

So, what does lessons can golf retailers learn from the largest online retailer in the world?


Lesson 1: Have Clear Business Aims

Amazon established clear business principles and focused on them without distraction – no matter what anyone else thought or said.

Continue reading “Lessons from Amazon”

Old, “Establishment” Brand Makes Changes to Move with the Times! What can Golf Learn?

BBC 4 recently broadcast a thought-provoking documentary that had some very useful insights for the golf industry: “Inside Bentley – A Great British Motor Car”?  

It featured the thinking behind a £800 million investment in their latest model, the Bentayga: the fastest SUV ever built – a Bentley on steroids! It is the first time that they had developed an SUV. During its development it was essential that it sat perfectly in Bentley’s image, yet capable of winning-over future generations of customers. Clearly, they had recognised that, as the number of older customers diminished, (“the blazers” as they were referred to), the company needed to respond to the wants of younger generations.

Step one demanded product development as identified.

Step two importantly was the need to modernise their image at the point of sale. Hence the program saw the world’s oldest and largest Bentley dealer, Jack Barkley of Mayfair, having its interior stripped back and being replaced with sleek, new modern fittings and fixtures.

Bentley, an icon of British society, and Rolls Royce, have both recognised the need for change.  So must the golf industry if it is to prosper in changing times and it too needs to take a similar two-step approach.

The first, updating the product: offering different forms of golf, e.g. speed or football golf, for example, and competitions that are more in tune with family life today. The second, going out of its way to promote a new image for the sport giving it a much-needed, wider appeal: particularly to the Millennials who are so different to the majority playing golf now but need to be captured for the future.

Food for thought for the New Year!