TopGolf Transforms the Typical Driving Range
The U.K.-based outfit has created a high-tech family entertainment center that's bringing new customers onto the links.
(Business 2.0 Magazine) -- The typical golf driving range hasn't changed much since Arnold Palmer was in his prime: The balls are old and spongy, the tees are uneven, and the ambience is lifeless.
Where's the fun in that? That's the question Brits Steve Jolliffe and his twin brother, Dave, pondered over drinks with their friend Geoff Emmerson at a golf course in North London in 1997.
Within half an hour, the trio had hatched a plan to give the driving range a 21st-century makeover.
Three years and more than $10 million later, they opened their first TopGolf "golf game center" in Watford, England.
They've since added two more locations in England, one in Thailand, and a fifth in Alexandria, Va., outside Washington, D.C.
TopGolf turns swing practice into a competitive activity. Players aim at dartboard-like targets; sensors read a microchip embedded in each ball and award players points depending on where their balls land.
To create more of a clubhouse feel, the TopGolf team also installed flat-panel displays in the driving bays. The bays are heated and tended by "caddies" - waiters who serve food and beverages.
Miniature golf courses keep younger children entertained at most sites, and pros are on hand to provide instruction.
Attracting the leisure class
The combination expands the appeal of the driving range beyond the plaid-pants crowd. Kids come for birthdays, companies for team building, and groups of 20-somethings for beer and games.
At the Alexandria range, half the clients are "leisure customers" who see TopGolf as an alternative to bowling or a movie, 25 percent are recreational duffers, and 25 percent are hard-core golfers. "The intimidation factor is gone," Steve Jolliffe says.
A TopGolf facility costs $5 million to $7 million to construct. The Alexandria location is on track to bring in more than 135,000 customer visits during its first year and should break even within four years, according to Golf Entertainment International, a private group that holds the rights to the TopGolf franchise in the United States and Canada.
At Alexandria, 55 percent of revenue comes from TopGolf games; food and beverage sales account for 20 percent; and retail sales, mini golf, events, and lessons make up the rest.
World Golf Systems, the U.K.-based company formed to license TopGolf, says it had revenue of $5 million in 2005 from equipment sales and royalties and expects to be profitable this year.
TopGolf is teeing up further expansion. Two new facilities - in Chicago and Dallas - will be rolled out in 2007. Australia, Dubai, France, Russia, South Africa, and Spain are also charted to get centers.
Steve Jolliffe says traditional driving ranges have asked about licensing parts of the technology, but he's unwilling to compromise: It's the complete TopGolf experience or nothing, he insists.
Anything less would just be par for the course.
TopGolf's winning technique
1. Keep an eye on the ball
Developing a golf ball that could be embedded with a microchip and still fly normally was a major challenge. Initially, manufacturers told the Jolliffes that the chip - an RFID transmitter that's smaller than a dime - wouldn't survive the manufacturing process and would degrade the ball's performance.
Yet after more than two years and $5 million in R&D spending, the TopGolf team had a ball that it says performs identically to those used on the pro tour.
The tagged balls are pricey - roughly $2 apiece vs. 40 cents for a standard ball--but attrition is low, since the balls stay within the confines of the facility.
"It's quite nice if somebody says you can't do something," Steve Jolliffe says. "We knew we'd get the chip in eventually, and then we could patent it." Indeed, the company has filed to patent its ball technology in more than 30 countries.
2. Set up for the pitch
Each TopGolf visitor must purchase a reusable membership card for $3. Before a game, players swipe their cards through a computer to receive several electronically tagged balls marked with their information.
At the hitting bay, they roll each ball past a sensor that syncs it with the scoring monitor. Depending on the time of day, the cost of a 20-ball game varies from $3 to $6.
Another advantage to this system: Because each player's data is associated with a membership card, TopGolf knows a lot about its clients. If a player hasn't visited in several months, for example, the company can send an e-mail offer for a free game on the next visit.
3. Aim for the Pin
Aim for the Pin TopGolf, the chain's signature game, awards points for each ball that lands in a target.
Targets are situated 25 to 250 yards from the tees; each has a colored flag in the center. TopChip is a different game in which the screen directs players toward specific targets.
Either way, if the ball lands in a target, the distance and points accrued are relayed wirelessly to a computer, which displays where the ball landed and tabulates scores on a screen in the player's bay.
Julia Feldmeier is a writer in Washington, D.C.