Golf Club Management: 12 Key Performance Indicators for the Pro Shop

Posted by Alex Lavoie on February 15, 2018

It's time to understand how your golf club management strategy can improve.

When your course isn’t at the top of its game, it's easy to blame the uncontrollable factors that influence its performance. The good news is that a golf club management strategy can improve performance substantially by focusing merely on the factors that are within reach.

With modern pro shop POS technology it's possible leverage your data to gain new insights and reach your  full potential. Leveraging data means making the right decisions to achieve optimal inventory performance, employee performance, and financial performance. In order to do so, your decisions need to be based on key performance indicators that when all interconnected together tell a complete story of the overall performance.

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There are 12 key performance indicators that can be broken up into 3 sections:

Managing Financial Performance

1. Total Sales

Knowing how well all products are selling is an obvious number that all golf managers should be looking at. Your POS should able to quickly produce this high level key performance indicator to tell the overall health of your pro shop. 

2. Gross Margin 

It's absolutely crucial that golf club management understand exactly how much money they are making of each product and product category. Your inventory should consistently perform well on this metric so make sure you are on top of this KPI

3. Net Margin

By looking at the overall margin on your total sales you'll understand how profitable overall. If performance is lacklustre you can quickly diagnose the problem by starting here. 

 

Managing Merchandise Performance                                  

4. Sales by Category

If you've added a new category of products this year or if you're not sure whether an old category of products is performing well with your current audience take a look at this KPI. This metric determines whether customers responded to a new category of offering or not. Your POS should be able to easily produce this metric little to no headache.

5. Stock Turn

Your stock will turn over at some point so it's crucial to know when and how often it does. Knowing how many times it turns over during the year informs purchase order behaviour and can also give some indices regarding seasonality and customer buying trends.  

6. Gross Margin Return on Investment (GMROI)

How effective is my inventory at generating cash flow and profits?There are some calculation involved here but this metric is crucial for determining how profitable your inventory truly is. This case study explains how to calculate GMROI and use it with data collected by your POS .      

7. Sell - through

Analyze sell through as monthly report to understand much stock has sold. This metric can help with organizing purchase orders and understanding seasonality while showing which products are performing well.

8. Weeks of Supply

How much do I need to buy or markdown? The inverse of sell through, this metric explains how much you have left in stock and is the most crucial metric when organizing purchase orders. Modern POS system are able to produce these numbers automatically and provide clean, easy to understand reports on these metrics.

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Managing Employee Performance

9. Sales Per Hour 

What are the busiest store hours? There's nothing more frustrating than losing potential customers to a long wait or a lack of service technician. Collecting time stamped data with your pro shop POS will ensure that your pro shop is never understaffed. 

10. Sales Per Employee

How well are my employees doing on the sales floor? One the most difficult aspects of golf club management is the human aspect. There's no doubt that making sure your pro shop sales floor is performing is a difficult and time consuming task. If your pro shop POS stores data on employee sales you should be able to generate the metric and inform your staffing decisions.

11. Units per Transaction (UPT) and Average Transaction Value (ATV)

Every transaction has a value and sometimes your pro shop staff don't get the full value out of a customer. Understanding how often your pro shop staff succeed in up-selling a customer. If your POS tracks data effectively you can easily generate this metric to determine what items are typically found in larger baskets and how good your staff is at bundling products for each sale.

12. Payroll Percentage

Sometimes golf club management doesn't get it right it comes to having the right amount of staff in the pro shop. This metric shows whether your staff is too much of a drain on revenue depending on the level of inventory you have in stock. If you have a lot of staff and not much inventory what is the point of keeping so many employees on the payroll? Gathering this kind of data from pro shop POS will help you make better staffing decisions. If you need to cut the payroll down, consider using automated POS kiosks elsewhere in your golf operation.

 

These metrics act like levers for your business. You focus your efforts on one, and several parts of your business react. If you want metrics that will make a real difference, you need to think of them as inter-related, a complete whole that shows how well your business functions.

 

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Managing a pro shop is a blend of art and science. Sometimes you need to go on instinct; sometimes you need to look at the numbers. These metrics are tools to help make the most rational decisions to further reach the full potential of your pro shop.