The supply chain for superintendents is rather unique. I can’t think of another industry that employs mobile stores that regularly drop by just in case you might need something. Need an unexpected pest control product or specialty fertilizer? No worries, the truck will be here Tuesday. How about an extra rake that someone broke over their knee at a bar outing the other day or a divot box that the same idiot crushed when he sat on it? It will all be here Tuesday, along with some safety gear that’s running low.
Golf courses that don’t have access to this mobile treatment still have good options that typically end up with a package on your doorstep. Golf distributors, manufacturer reps and catalogs all make procurement for the golf course extremely predictable, stable and responsive. This is a positive dynamic that isn’t enjoyed by too many industries. Agriculture inputs, for example, vary widely depending on commodity prices and trading anomalies. Fertilizers, many of which are petroleum based, can fluctuate for a variety of reasons and emasculate entire agriculture business models. Pesticide prices or availability can vary sometimes from small supply chain disruptions from production centers in China and India. Yes, your AIs probably originate there, despite what the label says.
By many accounts, golf course superintendents appreciate and are happy with the distributor relationship and other parts of the supply chain for maintenance products. Product availability and service are vital components to the supply chain. And what superintendents appreciate more are knowledgeable sales reps who can educate turfgrass managers on new products, technical information and case studies about practical use and efficacy. Largely, the supply chain provides ample opportunity to custom-fit your golf course for the right platform of products at a competitive price.
Methodology and Demographics
Our inaugural Distributor Experiences Survey was broadcast to our email subscribers and promoted on Twitter for 15 days in mid September. No incentive was given. The 336 respondents give the survey a ±5.3 percent margin of error at 95 percent confidence. Respondents were 83 percent golf course managers, and 13 percent were owners or property managers; 43 percent were from private or semi-private facilities, and 46 percent were from daily fee courses or municipals. Half of respondents had maintenance budgets below $500,000, and 16 percent had budgets more than $1 million. Slightly more than half of respondents were over age 55, and 98 percent of respondents were male.
Superintendent’s inaugural Distributor Experiences Survey (see above for methodology and demographics) was created to identify the level of satisfaction for various parts of the procurement process. It was intended to assess pinch points, relationships, service, buying habits, pricing and macroeconomic trends affecting the value chain.
Superintendents are exceedingly happy with their purchasing paradigm. Consider this: 91 percent of respondents are either satisfied or very satisfied (34 percent) with their distributor experiences and relationships; 7 percent are neutral (basically happy) and just 1 percent each are dissatisfied or very dissatisfied.
To put this in perspective, The Ritz-Carlton Hotel Co. has historically had the best customer satisfaction rating of any hotel chain at somewhere around 94 percent (JD Power now uses an ambiguous points scale so they don’t upset the hotel chains with an actual percent that people can understand. The most recent study has Ritz-Carlton scoring highest of any chain with 896 points out of a possible 1000). How is it possible that 6 percent of people are unhappy at the best hotel chain in the world? Ritz-Carlton and the rest of the hotel industry has discovered a few things while laboring over these numbers through the years, and they figured out that the lion’s share of their negative scores emanated from three scenarios:
- Bad experiences correlate to bad reviews. That means if turndown service arrived while you were in the room instead of two minutes later when you went downstairs for cocktails, then you got dinged. Even if it’s not your fault, for example, if there is a death in the family while you’re staying at their property, then you will correlate a negative experience to that hotel stay. Great hotel, had a bad time.
- Sometimes a previous experience will heighten expectations. If you just stayed at a Four Seasons that comped your meals because your lobster bisque was served at room temperature, then you might be looking for handouts for the slightest of perceived shortcomings. This happens in golf quite frequently. If you just got back from a golf trip at top-100 courses, you might not think quite as highly of your municipal when you return.
- Some people can never be satisfied. We know these guys, and it is an actual statistical reality of 2-3 percent. It’s nice to know that the two guys that always have something to complain about on your golf course spread the love a little bit to hotels and car dealerships, too.
Thus, a 91 percent satisfaction score (Figure 1) means that suppliers are doing a good job of meeting the needs of the industry, and purchasing superintendents appreciate the effort. No significant deviations existed due to budget size or type of golf facility. But other satisfaction scores were determined by both size of budget and facility type, which also correlate.
Public Versus Private
More than 87 percent of public, daily fee and municipal golf courses reported budgets below $750,000; 67 percent are below $500,000. Conversely, just 20 percent of private and resort courses have budgets below $500,000, and 43 percent have budgets over $1 million.
These distinctions are crucial in understanding the service aspect of distribution and motivation for distributor and manufacturers sales reps. You can’t blame them: They are compensated to move product, so where would you spend most of your time?
When looking at metrics that define a good transaction (Q7), again the results were positive overall. No statistical change existed between public and private course for their sales reps’ product knowledge, quality of product or availability of product. But there are perceived differences in price, speed of order fulfillment, support and service (Figures 2 & 3).
Private golf courses are more likely to be satisfied or highly satisfied with “responsiveness” of their sales reps or distributor organizations (90 percent) versus public courses (84 percent). Private supers are slightly more satisfied with their “competitive pricing” (73 percent) versus public superintendents (71 percent).
This might be a result of budget size, as many higher-budget golf courses are catered to more closely. This doesn’t appear to be systemic, but instead probably a result of human nature and the willingness and ability for sales reps to grant more time and energy to larger accounts. Additionally, golf courses with larger spends often reap the benefits of lower pricing year-round.
“The bigger guys get the deals, and we can’t get those discounts unless it’s early order season or if I buy a pallet of it,” says Trevor Marsh, superintendent at Saratoga Lake Golf Club in upstate New York. He says his $350,000 budget makes it difficult to earn discounts on core products outside of early order season, but larger-budget operations, which he has also worked for, are able to get EOP pricing throughout the year.
“Competitive pricing” was the aspect of purchasing in which all superintendents were least satisfied. As a whole, 73 percent (not represented in a chart) were satisfied or very satisfied with their pricing; 21 percent were neutral, and 6 percent were dissatisfied or very dissatisfied.
But private course aren’t always feeling the love. When it comes to “technical expertise” of sales reps, private courses are much less impressed: 74 percent of private superintendents were satisfied or very satisfied with the technical expertise of their sales reps, and 23 percent were neutral. At public courses, 84 percent were satisfied or very satisfied, and 12 percent were neutral, or not impressed.
Many superintendents voiced frustrations about lack of knowledge on new or emerging technologies, such as specialty fertilizers, biostimulants or plant health therapies. Again this is likely more a result of sales reps being incentivized for purchases from large companies at a greater rate than their commissions on products from smaller companies that don’t have ongoing rewards programs.
When it comes to “understanding your needs” public-course supers are more satisfied with their distribution experience. Public superintendents are 83 percent satisfied or very satisfied with distribution companies’ ability to understand their needs, versus just 76 percent of private supers.
This could have something to do with the number of sales reps many of these courses deal with. Public courses and those with smaller budgets generally have fewer reps calling on them; 87 percent have five or fewer. Conversely public, large-budget courses in larger golf markets have more: 40 percent have six or more (Figures 4 & 5). That’s a lot of foot traffic.
Superintendents at larger-budget courses often spend less of their time on agronomy and more time in management meetings. We added a “director of agronomy” title to get a feel for golf courses that might have multiple layers of turf managers running the day-to-day operations. About 10 percent of private superintendents have a director title versus 5 percent at public courses. These management types can’t always stop what they are doing to chat about new product purchases, especially when they have inventory left over from last year’s EOP. Purchases at these types of facilities tend to be more of a group effort as the person who is second or third in command often has a better grasp on product use and replenishment needs.
But despite the downsides of EOPs – why can’t I get these prices all the time? I haven’t used all my inventory from last year, and I’m kind of busy winterizing my golf course to stop everything and order an entire year’s worth of products – 71 percent of total golf courses participate in an early order program from their distributors. Private courses were more likely to participate in distributor early order programs (77 percent) versus public courses (67 percent).
The larger discrepancy between public and private was in participating in early order programs directly from their manufacturer rep: 71 percent of private golf courses participate in early orders programs directly from their manufacturer rep versus just 53 percent of public golf courses (see story on p. 16 and data on p. 18). Again, size of budget and total spend with individual manufacturers likely influence this difference.
Additionally, 76 percent of all respondents say they are in some sort of purchasing cooperative.
Public courses are far more likely (82 percent) to buy through a cooperative versus a private course (66 percent). The reason is fairly clear: Cooperatives often purchase pallets of product or other bulk increments at lower prices that their members can then leverage and buy just one piece at near the same price of a bulk deal. Public, smaller-budget courses are more likely to use this mechanism for chemicals and fertilizers.
This reality also might make public superintendents more likely to send major purchases out to bid: 15 percent of public supers say they “strongly agree” when asked “I always send my major purchases out to bid” versus 8 percent of private supers.
“I would absolutely recommend bidding purchases out, it keeps distributors on their toes and possibly give an even better price. Competition is a good thing,” says Mike Meehan, director of agronomy at The Golf Club at Lansdowne in Virginia. “It shows ownership/membership that you have done your homework and are doing what is in their best interest and that business is done ethically. It can affect distributor relationships, but it is good business and most distributors understand the process. Most distributors that I have dealt with welcome it.”
An interesting correlation exists between bidding and satisfaction (Figure 6). Superintendents who bid all jobs are more satisfied with all aspects of the distributor relationship, including price, service and technical expertise of their reps. Many say the bidding process makes distributor relationships stronger because of the transparency it brings, and those relationships can help meet the needs of superintendents when unforeseen needs arise.
“The thing you have no control over in this process is future weather and your needs that aren’t covered when you put this bid process in place,” says Timothy McAvoy, superintendent of the Fox Hollow Golf Club in Branchburg, New Jersey. “Manufacturers force all of us to make selections in October for the following summer season, which is great and easy on paper, but not so much in reality. Establishing a relationship through the bid process with a distributor is essential when you might have to make changes that season. People relationships make the world go round, and that applies to all walks of life.”
During the last decade or so, distribution companies have consolidated; cooperatives have brought smaller distributors under one umbrella, and regional suppliers have merged in an attempt to grow critical mass and compete with larger, national players.
As that dynamic continues, it doesn’t necessarily mean that superintendents have fewer choices in major markets. But many are keeping their eye on the situation.
We asked if supers had fewer sales reps in the wake of consolidation, and the result was evenly split. The concern was more pronounced when asked if consolidation would make the supply chain less competitive: 73 percent of superintendents worry in some way that consolidation might create fewer options and higher prices to follow, although just 10 percent “strongly agree” with that statement.