Let the Barterer Beware?

Posted By on Nov 13, 2015 | 0 comments


Some may think that “lobby” and “lobbyist” are dirty words. It depends, really. If someone is lobbying for a cause you believe in, such as more funding for Alzheimer’s research, then it’s not such a dirty word, is it? “Barter” is by itself not a dirty word. It’s simple, really. Instead of paying for a product with some form of monetary currency, two parties agree to trade their products or services with each other. I see no problem with two merchants trading with each other. Hair stylists may barter for landscaping work. Accountants may barter a little tax prep time with a restauranteur for some meals. Behind it all, though, both parties are establishing a certain value on what they are giving to the other, and the hope is that the values are relatively equal. Shake hands, thank you very much, a good deal.

Successful Barter

In my conversations over the past month or two, the word “barter” seems to be a dirty word in the golf industry. Again, for the record, let me state that I don’t think bartering is bad, as long as the transaction is simple and clear. You give me Product A (valued at or around $X) and I give you Service B (also valued at or around $X). Shake hands, thank you very much, a good deal. I think the word “barter” has been sullied, because bartering between golf courses and service providers (namely technology and tee time distribution companies) isn’t as clear as the rudimentary examples above. Far from it, actually. But correct me if I am wrong. I need to be schooled.

Golf courses all across the land have agreed to give away one (or more) tee times per day in exchange for certain services, such as tee sheet/web/customer management technology and tee time distribution on consumer-facing sites. Since learning about this practice, I can see why it has great appeal on both sides of the barter. Courses, often cash-strapped during the ups and downs of the year, don’t have to come up with any type of payment for these services. And the service providers aren’t having to manage a list of receivables, trying to chase down payments from courses around the country for what they provide.

But here is where it gets complicated, and when I start scratching my head. What is the value all those tee times that have been bartered? Is it the revenue the course would have received if they had not traded those tee times away? Does the course know if those tee times would have been sold without the tee time distributor’s help? If the course owner/operator can look at that barter time (say 1:58 pm Sun-Thur and 2:58 pm Fri and Sat) for the two or three years prior to the commencement of the barter deal, he or she might have an understanding of what the revenue had been in the past. Only then can the course management really begin to understand what they are giving in the barter. I also understand that some service providers won’t report to many courses what they sold the bartered times for. Seems to perpetuate the muddy-ness of this.

Then there is the question of the ripple effect of that barter. Many of these bartered rounds are being sold at a handsome discount (in some cases maybe 80% off or more!). I’m guessing many courses are ok with this, thinking they wouldn’t have sold the tee time on their own? I don’t really know. Please school me.  The extreme discounting seems to be due to the fact that course management is placing no restrictions upon the tee time distributor with how they can price the bartered rounds of golf. Will some distributors only strike a deal if they can have complete control over the price of those bartered rounds? I can only see how this puts downward pressure on pricing. The cascading effect of that one bartered, discounted tee time is that the poor guy answering the phone at the course, facing the “entrepreneurial customer” on the other side of the counter, is getting pressured to “give me the deal I saw online.”  Heck, if I saw the image below at my home course or even one I was playing for the first time, I would feel like I’m getting the shaft at 7:40 am.

And often times, the course capitulates to the discounting demands or requests. How do you calculate THAT loss in revenue? Again, the value of each side of the barter is muddied. And from my limited vantage, it appears that some consumer-facing sites sell only these bartered rounds at low, low prices, training the golfer to wait until the last minute to pay next to nothing for golf. Being the new guy and all, I don’t see how giving up price control within a barter construct is helping anyone except the price-sensitive golfer, salivating at his phone, waiting for the next deal to flash across the screen. In fact, I can only imagine what some course managers and owners are feeling when they see their competition’s bartered rounds selling for $10 online. When you have a mortgage to pay and staff to take care of, the pressure to follow suit could be very strong. And I hear some tee time distributors and consultants in our industry say that the bartered rounds are a tiny, tiny, tiny slice of all tee times being sold.  Like, “Don’t worry. It’s ok. Focus on the other big issues in golf.”  But everyone I talk to is predicting online reservations to spike upwards like a hockey stick over the next several years.  When will the ripple effect of all this become a tidal wave?  But correct me if I am wrong.  Am I being too Chicken Little about this?

Golf Discount

And don’t get me wrong.  This isn’t an anti-tee-time-distributor vent.  I am a technophile.  I love good software and great marketing!  I secretly wish I had created a tech company, I love this stuff so much.  And I don’t think bartering as a concept for payment of services should be outlawed.  But, due to the very fact that many course owners and operators are holding pitch forks and lighted torches on these subjects, it all doesn’t feel very symbiotic (aimed both at the distributors and courses that abdicate pricing authority).  And if it doesn’t feel good, it probably isn’t good.

So, some questions for course owners and operators, as I traverse this minefield.

1. Why do you agree to allow your technology/marketing partners to sell bartered rounds at whatever price they want to sell them for?
2. Why don’t you mandate a “maximum allowable discount” on bartered rounds in your contract?  Such as, “XYZ company many not sell my bartered rounds for more than 30% off my agreed upon rates for those rounds.”
3. Right now, do you feel you are getting the better end of the deal…that it’s about event…or that you’re losing out in the trade? What information are you relying on to feel this way?
4. Do you know what your partner is selling all those bartered rounds for? If you do, would you pay the equivalent in cash for the same services? If not, why not?
5. What intricacies about this am I missing? With seemingly thousands of courses doing it, there must be a compelling reason.

While I feign ignorance on this more than I should, this is new territory for me.  I want to understand all angles.  I welcome the marketers/tech companies in golf to chime in here too.  Let this be a dialogue.

What do you think?  I invite you to comment below.

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Jay

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