Modernizing The Golf Club Fitting Business
Article by Herb Rubenstein
Introduction
Many golfers recognize the benefits of having a person with real expertise “fit them” for their golf clubs. Golf clubs come in many shapes, sizes, materials, and have three separate parts – the shaft, the clubhead and the grip, which all come in various sizes and types. Each of these three parts of the golf club ideally should be fit for the individual golfer.
This article is about the “business” of golf fitting. While I have been a customer of several golf-fitting companies, I have never owned or operated a golf-fitting company. The business is a complex one requiring not only excellent technical expertise of the “golf club fitter,” but also huge amounts of capital and operating costs relative to revenue, rigorous supply-side management, a strong “quality assurance program,” demanding customer service requirements, hard nose cost and price management and has a strong seasonal component to revenue generation in many locales.
So, the golf fitting business is a tough business and is very tough to scale. This article breaks down the business in a way and suggests new ways “golf club fitters” could use modern information technology even better than they use it today to scale their businesses. The basic premise is that the more golfers who get “fitted” for their clubs, at a reasonable price, the better they will play, the more they will enjoy the game and the more the game of grow can grow and expand.
Describing the Current Golf Fitting Industry
The golf club fitting industry is not monolithic. Some golf club manufacturing companies like “Edison Golf” simply ask a series of questions to potential customers and “recommend” golf clubs that “fit the customer.” This “fitting process” is certainly better than someone buying a golf club without this analysis, but is very limited in many respects. The seller has a limited number of shafts, grips and clubheads to offer, so getting some information from the potential buyer of a golf club can guide the seller as to the best “Edison” golf club to buy. But it cannot guide the potential buyer regarding which brand or model of golf club to buy that is currently being produced and sold by a different club manufacturer. Obviously, this type of “collect some data from a customer and recommend a certain golf club with certain specifications” is very inexpensive and scalable, just like how Netflix or Amazon recommends a movie to its customers.
The more traditional golf club fitter has an inventory of many types of shafts, grips and clubheads from many manufacturers. Many have very sophisticated and expensive golf “simulator equipment” that measures how the golfer who comes to their location to “test clubs” actually is able to hit each brand of clubheads, shafts and grips. The potential number of combinations of clubheads, shafts and grips is in the thousands and a good golf club fitter can quickly focus in on which grips, shafts and clubhead in the right combination can help the golfer produce the best shots with their current golf swing and with the expected improvements they intend to make in their golf swing.
Quality control is essential for the “club-fitter” because of two separate problems that are currently pervasive in the golf industry as a whole and in the golf club fitting industry. The first is “pilot error” or the club fitter making a serious mistake. One golfer spent $700 on a new driver fit by a large club fitting company after two hours of testing many different brands and models of clubheads, shafts and grips. The “optimal” club based on the golf simulator data was ordered and came in. The golfer came into the company’s premises to pick up the club. He could not “hit the golf club.” Pilot error – the golf club fitter wrote down “right hand” on the order and the golfer was “left-handed.” While this “pilot error” was fixable, at some significant delay for delivery of the correct club, other forms of pilot error are often never even noticed, and a poor golf club fitting experience happens more often than it would if every golf club fitting business improved its “quality control” or “quality assurance” program.
The second type of error is what I call “manufacturing error,” and that is rampant in the golf industry. Order a golf club that is supposed to have 56 degrees of loft or 60 degrees of “lie angle” or a “stiff shaft” and it is possible that the club that the manufacturer sends to the club fitter for the golfer will not be built consistent with the markings on the golf club or shaft. Some golf club fitters will completely miss what happened to me which is I got a golf club, a 15 degree fairway wood, with a shaft from a reputable shaft manufacturing company, marked “stiff” (which is right for me) and it was actually a “flexible shaft,” causing me all kinds of problems on the golf course with that club. Finally, I took the club to another golf club fitter who measured the flexibility of the shaft, discovered it was way too flexible for me, and we quickly replaced the shaft (and got the newer version of the clubhead) with the proper shaft and the most ideal clubhead for my golf swing.
In any business where quality control is a key factor and source of competitive advantage, growing the business is very hard since a lot of training needs to go into training staff on how not to make pilot error types of mistakes and how to catch “manufacturer error” which it occurs.
How Modern Information Technology Can Help Golf Fitting Companies Scale
Capital and operating costs (the money needed to pay for everything that is necessary to operate a business and grow a business are expensive and hard to get. Any solution to helping golf club fitting companies expand into new locations must solve the problem of how to get capital and money for operating expenses to grow the business at a reasonable, affordable cost. The first solution to the “capital and operating cost” problem is finding ways to reduce the capital and operating costs a company has to put out to run the business. Food stores were brilliant in reducing their operating costs when they got their vendors who sold them food to come into the stores and stock the shelves of their stores at a cost to the vendor rather than to the food store. Airlines when they adopted electronic ticketing and got away from issuing paper and cardboard tickets reduced their costs of issuing “tickets” by 99%, a brilliant cost reduction.
The other areas of operating the business and the costs associated with each in the golf club fitter business must also be subject to real cost reductions and some new type of “cost-sharing” where the company shifts operating costs to the customer in a way the customer does not object. Burger King stopped having its employees take orders for “tomatoes, onions, lettuce, mayo, ketchup, mustard, pickles” and stopped having its employees put them on each person’s burger. Instead, the company put out these “condiments” and the customer took on the activity and the “cost” (in terms of time) of customizing their own burgers to their great delight. The company saved money. The customer was happy to pay the “price.”
Let us now look at each of the major cost areas for the golf club fitter and see if there is a way for the golf club fitting industry to cut capital, operating and expansion costs.
1. Technical expertise of the “golf club fitter,”
2. Rigorous supply-side management
3. Demanding customer service requirements
4. Seasonality
5. Reducing or Sharing Capital and Operating Costs of opening up a new location or expanding a current location
1. Technical Expertise:
Golf club fitting is an engineering exercise. Becoming an excellent golf club fitter requires training, education, experience, knowledge of how the golf swing operates, being able to assess the physical characteristics of the individual golfer, and the ability to analyze all of the data generated by golf club simulators. To my knowledge, there is no community college, university, technical school that has courses to train golf club fitters. So, all of the costs of training these people now rests in the worst place possible in the industry, the golf club fitting company.
Therefore, those with golf club-fitting expertise must convince education and training companies to build the curriculum and training programs to meet the growing needs for this “job category.” I believe most “community colleges, vocational training programs and other educational institutions would welcome offering classes in golf club fitting and manufacturers of golf clubheads, shafts and grips, as well as golf club simulator companies would gladly donate some equipment for this cause.
While this is a great long-term solution, it will not get people trained quickly. For a quick solution, someone needs to create free courses to be taught online in “golf club fitting.” These courses could be offered through “Coursera,” educational organizations, and could quickly scale to help meet the shortage of highly trained golf club fitters in the marketplace. These courses would be no replacement for the experience that is so essential in this industry, but it would at least get people into the door with some education so they can benefit from day one of their “internship” with reputable golf club fitting companies.
The technical expertise shortfall in the golf club fitting industry is a very tough nut to crack, but there are ways using online education, a form of modern information technology, that could make a good short-run and huge long-run contribution to the golf club fitting industry.
2. Rigorous supply-side management
Golf club fitters must carry a huge selection of different grips, shafts and clubheads. Many manufacturers supply “demo” models to the golf club fitters which keeps their inventory costs lower than they otherwise should be. New ways of low-cost financing for the purchase by golf club fitting shops for necessary inventory purchases, for the golf club buyer who wants the new club today or this week, must be created. Few small or medium-size banks will do this, but it is possible that new business financing programs through credit card companies, Capital One, Bank of America, Citi, Chase, Morgan Stanley or other places with abundant capital might be willing to set up a low interest, short term inventory financing program for golf club fitters.
2a. Supply-side management from a technical point of view. Quality assurance or the rigorous testing of every shaft and every clubhead can be created at a reasonable cost to golf club fitters. Manufacturers should pay a real price when they deliver something that is outside of the normal variance from any specification they promise or label on the club. One way to make manufacturers pay a real price is for all golf club fitting companies to get together and create a website where they report every product they receive that is not within proper specifications. Quickly, people and other golf club fitters will see which golf club manufacturing companies are failing to have their own quality control or quality assurance programs. Consumers can also send in when they buy directly from a company and the specifications are off. Certainly, there will be some “false negatives” and the website will cost some money to create and manage, but it is basically the only leverage golf club fitters will have over manufacturers. In addition, supply contracts that specify that for every “out of spec” club a golf club fitter gets from a manufacturer the manufacturer will pay a penalty would also get the attention of the golf club manufacturers.
3. Demanding customer service requirements.
Golfers who are fitted for clubs can be a huge pain in the behind and can be “high maintenance” to put it mildly. Every golf club fitter should do what they can to “outsource” or delegate to one employee the major handling of every element of customer service. The person handling the customer-facing side of customer service issues need not be a highly qualified club fitter so that will prevent the highest value people in the club fitting operation from having to answer the phone and deal with customers who can be long-winded in explaining why the “club is not working for them.”
4. Seasonality
This is a traditional business issue and this article has very little to add to the many ways companies adapt to seasonality issues. Clearly providing additional services during low selling periods, reducing pricing, developing new marketing approaches for the low season, and cutting costs and personnel during an off season are all things many golf companies and golf courses, for over one hundred years.
5. Reducing or Sharing Capital and Operating Costs of opening up a new location or expanding a current location.
This section is the heart of this article. First, golf fitting facilities are often best when co-located with other golf-oriented businesses. This is already in place in many locations in the world. Sharing the costs of the new location with the co-located facility, even sharing ownership, profits, marketing expenses, labor costs, insurance costs, etc. is common but not widely practiced enough in the industry. The club fitting operation helps the business and profits of the co-located business, and vice versa, so “Joint Venture” agreements must be drafted in writing by competent business and legal counsel so that the golf club fitting company secures the lowest possible costs and the greatest financial advantages of co-location.
Setting up a separate LLC for each location reduces the cost and risk to the golf fitting operation that is expanding to new locations. The real estate industry, restaurant and hospitality industries do this brilliantly and the gof club fitting industry can learn from this example. With each location having a separate LLC and separate business plan it can secure its own investors and bank lines of credit, thus reducing the costs to the company that is “expanding to new locations.” Better than a franchise model, this model can allow for the licensing of the main headquarters/location’s name, allow for some of the technical expertise of the main location be shared, often by ZOOM, Go To Meeting or other forms of modern video information technology, so that headquarters can assure consistent quality among all of its new locations.
Co-location can also cut down the capital costs of expansion. For example, every golf fitting operation needs golf simulators, both the computers, cameras, projectors, screens, the custom build-in of these facilities and the technical expertise to operate and maintain these facilities. Indoor golf instruction facilities need the same capital requirements. Many golf courses need the same capital requirements. Golf event companies and dining and event locations that want golf simulators in their facilities to expand their business all need exactly the same capital requirements.
Therefore, while “co-locating” seems to suggest sharing a location with one other company, this business model suggests that a golf club fitting operation could be combined with many other companies all co-locating in the same space, with each company attracting clientele to its own company as well as the other co-located businesses that operate out of the facility. Again, a Joint Venture Agreement needs to be created but once created, it can be repeated over and over at new locations and, in my estimation, cut the individual capital and operating costs of a golf fitting company, by over 50% in the long run.
Conclusion
As the golf industry grows, the need for club fitters will grow. Unfortunately, demand or actual number of paying customers will remain relatively low for club fitters among all the golfing population because the cost of club fitting is high. Using modern information technology, especially video technology can create a situation where the highest levels of technical expertise, the most expensive personnel in the operation, can all work out of the main headquarters, and participate via video in helping the staff in the satellite operations provide the best possible, high-quality service at the lowest possible price to the customers.
This is exactly the transformation we are starting to go through in many countries with the medical profession and it can apply to the golf fitting industry as well. Scaling the best club fitters is impossible because until now, no one could be in two places at once. Today, a club fitter with proper facilities and support staff in various locations cannot still be in two places at once, but could be in several places every hour, even if those places are located hundreds or even thousands of miles apart.
This will require new thinking by golf club fitters who want to expand at the least possible cost. The time as come for a hybrid experience – a person in a golf simulator in Salt Lake City hitting golf shots, the video and numerical data from each golf shot being transferred from the location where the golfer and staff member are together (on-site) to an off-site location where the Master Golf Club Fitter is doing their magic by helping select the best combination of golf clubheads, shafts and grips from an “offsite headquarters.” Our space shuttles are managed in large part by people thousands of miles away at headquarters in Houston or Florida and almost all the time, the operation is successful. Sometimes, golf club fitting gets close to “rocket science,” so it can learn a thing or two about remote management to expand the golf club fitting business.