The assignment is in the documents that have been attached to this question.
Jack Schibrowsky’s Database Marketing Spring Creek Golf Course Project Joe Roliardi owner of the Spring Creek Golf Course has been approached by a business consultant (Randy Fouth) from RJ Sips CRM solutions. RJ Sips’ works to give you everything you need to run your business in one centralized, easy-to-use database platform. Services include: Marketing Automation, Email Marketing, Landing Pages, Marketing Analytics, Segmentation, Profiling, Referral Programs, Businesses basics, CRM strategies, and Membership Programs. Randy has proposed a program for the Golf Course to provide a turnkey CRM system that will double Spring Creek’s profits. Joe has contacted you, his long-lost niece or nephew to help figure this out. He has sent you this basic info. The Spring Creek Golf Course is an 18-hole championship course that has seen shrinking revenues over the past 10-15 years, but the business is currently viable, since the property is paid off. Spring Creek usually fills around 50% of its tee times, with some weekend tournaments and weekday outings, golf leagues, Additional revenue streams include a driving range, restaurant and bar, pro shop, lessons, leagues, and special rates for juniors and high school students. More recently, Joe saw both regular and Club memberships decrease in 2020, in part due to the Covid19 pandemic. As a result, Spring Creek dramatically increased their recruiting efforts in 2021 and have partially caught up. But Still Joe is concerned about running out of potential members over time. As a result, he is very interested in customer retention. Joe generally classifies his customers into three groups, general golfers (with no memberships) Regular members, and Club members. He does have the Spring Creek Golf Course Medalists’ Newsletter and has been using Constant Contact software to email offers to his customer list. The annual cost of the subscription is about $10 per customer, not including the administrator’s time. The number of regular golfers continues to decline, but Joe has been able to acquire new golfers to replace them. Still, he wonders what will happen in the future. Joe sees the major issue associated with the current database is the inability to track non-golf purchases (F&B, Pro Shop, and events). Without this data, Joe has no way to determine who his best customers are. Spring Creek Golf Course Project Situation Analysis (20 pts) First, review the financial data and make a report. Include all of the following: Total annual Revenues and Gross Profit, Number and Percentage of rounds, revenues and profits from the membership program (5 pts) Calculate the current LTVs for Regular and Club Members You will need to determine the most logical number of years and justify it. (Provide the LTV tables) (10 pts) Calculate the changes in LTV (Include the LTV tables) if: (1.) Spending goes up by 10% and retention goes up by 5% (2.) Spending goes up by 20% and retention goes up by 10% Leaky Bucket How many new Regular and Club Members are needed each year to maintain the current number of members for each group (around 200 regular members and 75 Club members). (3 pts) Summarize the current financial situation. (2 pts) Spring Creek Golf Course Project CRM Proposal Analysis (50 pts) Randy has proposed a program for the Golf Course to provide a turnkey CRM system that will double Spring Creek’s profits. Joe has contacted you, his long-lost niece or nephew to help figure this out. He has sent you this basic info. He guarantees that you will be able to increase spending by 10% and Retention rates by 5%. But argues that with a little work the numbers will be much higher. Typically the increase is more that 10% retention and more that 20% spending increases. Cost of the RJ Sips’ Turnkey CRM is only $10,000, plus an annual fee of $10 per person to administer the program. The fee will be charged for the members only and not for General golfers. So for Spring Creek Golf Course that is around 200 regular members and 75 Club Members, $2,750. In addition, it is estimated by Randy that you will want to spend another $15 per person per year on CRM activities/programs. That would be $4,125. The Spring Creek Golf Course Rewards are $1 for every $10 spent. For regular members that includes golf, F&B, Events, and Pro Shop. For club members it will include F&B, Events, and Pro Shop. But the current rewards program for Regular Members is 1 free round of golf for every 7 played. That translates into an average of 15% off golf. There is no discount for Club members. Here is the estimate of current and new costs with 10% rewards on everything. Regular members Club Members Total Rewards Current CRM rewards $ 6,480 $ 6,480 Proposed CRM rewards $ 6,120 $ 7,735 $ 13,855 Total Difference (annual) $7,375 RJ Sips’ works to give you everything you need to run your business in one centralized, easy-to-use database platform. Services include: Marketing Automation, Email Marketing, Landing Pages, Marketing Analytics, Segmentation, Profiling, Referral Programs, Businesses basics, CRM strategies, and Membership Programs. Randy has proposed a program for the Golf Course to provide a turnkey CRM system that can potentially double Spring Creek’s profits. Joe has contacted you, his long-lost niece or nephew to help figure this out. He has sent you this basic info. This all seems like a lot of money to Joe, but Randy keeps telling him it is a no-lose situation. #1 How much will the CRM program cost in total and how much is that per customer per year? (10 pts). #2 If the CRM program were to increase retention by 5% and spending 10% for each customer group, how much would Joe increase his revenues and profits? If the CRM program were to increase retention by 10% and spending 20% for each customer group, how much would Joe increase his revenues and profits Use LTV tables to help to calculate this. (10 pts). #4 2, Currently Joe is able to stabilize his membership base with a concerted effort to recruit new regular and Club members (Some regular members upgrade to Club memberships golfers each year (only a small % are . This costs him around $15,000 in traditional marketing expenditures. How much is the estimated acquisition cost for each customer (assume the cost is the same for each type)? (10 pts). How much could joe save on acquisition costs if his calculation of per person acquisition cost remained the same and Joe wanted to simply maintain his current # of customers(around 200 regular and 75 club members)? To calculate this, figure out how many fewer customers he would have to recruit to fill the leaky bucket with a 5% and 10% increase in retention. (10 pts). #4 Summarize the CRM program in terms benefits and costs. Pay attention to the none financial aspects like added information available and how Spring Creek Golf course might change its marketing. (10 pts). Each Regular and Club member will be issued a rewards card that will swiped for check in and for the rewards for F&B, Events and Pro Shop purchases Spring Creek Golf Course Relationship Marketing Plan (30 pts) Recommend a total of 5 bonding activities for the new CRM program for Spring Creek Golf Course. Up to 6 points per recommendation for a total of 30 points. They can be Financial, Social, or Structural. Make sure that you recommend the best alternatives. They will be evaluated using the following criteria The complete description of the bonding activity (including anticipated costs). The goal/objective of the bonding activity Likelihood of accomplishing the specific objective Benefit vs. Cost For each activity, give it a name, description and justification. Example Initiation fee and cumulative membership discount (Do not use this one). Jack is proposing that Spring Creek Golf Course require a $2,000 initiation fee to become a Club member. This is typical at most Country Clubs plus it results in Structural bond and barrier to exit. To make the fee more palatable the additional fee will be paired with a reduction of $100 per year in annual membership fees for 4 years until the membership fee is reduced to $5,500 or $400 less than the beginning annual fee of $5,900. It will stay at that level going forward. Here is a table of the financial transaction. Current Program Proposed Program Yearly Total Yearly Total Year 1 $5,900 $5,900 $7,900 $7,900 Year 2 $5,900 $11,800 $5,800 $13,700 Year 3 $5,900 $17,700 $5,700 $19,400 Year 4 $5,900 $23,600 $5,600 $25,000 Year 5 $5,900 $29,500 $5,500 $30,500 Year 6 $5,900 $35,400 $5,500 $36,900 Year 7 $5,900 $41,300 $5,500 $41,400 Year 8 $5,900 $47,200 $5,500 $46,900 The reduction in annual membership fees creates an additional barrier to exit. If the club member decides to not renew their membership, they lose the cumulative reduction in their annual fees. This is likely to increase retention rates by at least 5-10%. And prevents a club member from simply not renewing one year and then renewing the next year depending on a person’s situation. The benefit to Spring Creek Golf Club is that they are ahead in terms of Dollars received from the member until Year 8. Plus, they get the time value of the money benefit. Currently, only around 20% of the club members are still members after 8 years. This change is designed to significantly change that. Spring Creek Golf Course Current Membership program Regular Members $99 per year Preferred Tee times Reduced Green Fees The Spring Creek Golf Course Medalists’ Newsletter One free round of golf with annual signup First chance sign-up for golf leagues Club Membership $5900 Preferred Tee times Includes green/cart fees The Spring Creek Golf Course Medalists’ Newsletter One free round of golf with annual signup First chance sign-up for golf leagues Spring Creek Green Fees No Membership Regular membership winter Summer winter Summer Prime $ 60 $ 50 $ 50 $ 40 Twilight $ 45 $ 40 $ 40 $ 35 Super Twilight $ 35 $ 30 $ 30 $ 25 Retention Rate Year 1 Year 2 Year 3 Year 4 Year 5 Year 6-10 Regular Member 0.5 0.5 0.6 0.6 0.7 0.7 Club Members 0.75 0.75 0.8 0