The Water Cooler - Driver Wars, Continued. A New Battlefield

The Combatants:

Mark King, CEO of TaylorMade Golf Company (Founded by Gary Adams)

Ely Callaway, Chairman and Founder of Callaway Golf Company

Wally Uihlein, President and CEO of Acushnet Company (Titleist and Footjoy)

Tom Crow, Founder of Cobra Golf

Karsten Solheim, Founder of Ping Golf 

Bob Wood, President of Nike Golf

While the individuals listed above were definitely the leaders of the companies battling for supremacy of the golf market in the 90’s and beyond, as memory serves, the biggest battles, the most explosive product comparison campaigns, where between Callaway Golf Company and TaylorMade.  Mark King versus Ely Callaway.

Both Mark King and Ely Callaway understood how profitable the graphite shafted metal driver was/is and in the golf industry the formula was clear; the path to profits was be #1 in a category on Tour.  Being #1 drove sales.  Titleist was #1 on Tour in balls and #1 in sales.  Footjoy, #1 in shoes on Tour, #1 in sales.  It actually wasn’t a perfect model, Ping was the number #1 selling iron in the 90’s but not the most played on Tour, that title went to Mizuno.  But the formula worked for Ping’s putters, wow, did it work for their putters.  The Solheims have an awful lot of gold putters, one for every victory on Tour, and sold a multiple to us golfers like no other putter company before or since.  However, where the really big money lay was in drivers.  Drivers were high profit items that for the first time were being sold as a single item.  Even in the Eye-O-Matic’s heyday (THE driver of the 50’s, 60’s, and 70’s) most consumers would buy the 3 and 5 woods to go along with the set. 

Gary Adams and his TaylorMade “Original One” changed all that.  People started buying just one club.  As graphite became the shaft of choice for said club the price got higher, and the profits went with it.   Mark King, Ely Callaway, the golf equipment industry, they understood, “being #1 on Tour with the driver meant being #1 in sales of drivers, meant making the most money.”  (You want a real oddity to all of this?  The guys that dominated putters and irons, Ping, didn’t get it.  They continued to manufacture and sell laminated woods well past the expiration date of actual wood woods.)  So, if you happened to be a Manufacturer’s Representative to the PGA Tour in the late 80’s and throughout the 90’s you were now involved in one of the biggest battles that ever took place in golf.  The battle ground wasn’t the golf course per se, it was the range, and the scorecard was the Darrell Survey.  (The daily equipment survey of what the Tour Player was playing that day.)

Tour Reps were working harder than ever to get a driver in the hand of anyone teeing off in the week’s event.  It didn’t matter if the player was the money leader, the guy with the most major wins in the field, or the guy that just qualified on Monday.  It all counted in the survey.  Manufacturers were building to suit.  The driver wars basically created the concept of the equipment trailer as we know it now.  Before driver wars if a player wanted a club with a specific shaft, loft, and grip a Tour Rep would go find a pay phone, call the company, and they would make it at the factory.  Then they’d ship it, probably overnight, and everyone would hope UPS wouldn’t break the thing.  Then the player would try it… and half the time end up using the club he originally had.  Now, clubs are made to order in 3 minutes, faster than McDonalds can make a hamburger!

Then it happened.  TaylorMade offered $500 to every player using their driver that week plus a bonus pool if you won with it, potentially up to $50,000.  To the Tour player, and remember this was before the “All Exempt” Tour, this was not only free money, but it was also needed money.  Callaway matched the deal, then offered more.  Other companies got involved too and the Driver Wars became a battle on multiple fronts.  Insanity ensued.  Throughout the 90’s and into the mid 2000’s the battle for #1 Driver on Tour ebbed and flowed between TaylorMade and Callaway like the dug in troops in France in World War 1.  Others tried.  Founders Club with the Judge.  Founders was TaylorMade founder Gary Adam’s next company, and his credibility went a long way with Tour players.  Unfortunately, Gary’s health failed him, and his company floundered without him.  Langert Golf, tried and failed.  Cleveland Golf, tried and failed.  Titleist could never quite muster the momentum in the club category to gain a #1 slot with players or consumers.  TaylorMade and Callaway were becoming juggernauts with deep pockets, big marketing budgets, and garnering more and more control of their retail partners each day.

Players were deciding which driver to tee off with that week based on the best incentive program.  Around 2005 TaylorMade said, “enough” and offered the first “Driver Only” contracts on Tour.  A promise to play a TaylorMade driver all year on the PGA Tour could get an exempt player $80,000 a year.  Of course, other companies followed, except Cobra.

Cobra broke the mold.  Started in 1973 by Tom Crow, they made the Baffler, the great, great grandfather to your rescue clubs of today.  It sold well.  Then they introduced irons.  By 1994 they were on fire, selling King Cobra Irons to more golfers than any other iron company.  They had a “new” way of marketing, tied to famous players such as Hale Irwin, Beth Daniel, and most importantly Greg Norman.  Their endorsement deal with Greg Norman turned the golf world upside down.  They were using famous golfers to sell clubs and it was working!

Norman drove Cobra sales.  As a youngster Tiger Woods admired Greg Norman.  Because Greg used a Cobra Driver, Tiger used a Cobra driver.  Because Tiger and Greg used Cobra drivers a lot of people bought Cobra drivers.  This might have helped Cobra finally break the hold TaylorMade and Callaway had on the driver market except for a company no one expected.  Nike.  Nike snagged Tiger right out from under Cobra’s nose.  Nike signed Tiger to the most lucrative player endorsement deal ever done for a golfer (5 years, $40 million) and announced, “Game on golf industry, we’re going to make clubs.”  (Not quite as iconic as Tiger’s “Hello world!”, but… eh) Tiger would play Nike equipment wherever possible.  His contract enabled him to reject Nike equipment if it didn’t meet his standards, but, when possible, Nike would be in his bag.

Nike built on Cobra’s strategy and changed golf marketing away from number of players / Darrell Survey numbers to “Player Popularity”.  They certainly followed the trend started by TaylorMade’s Driver Only contracts and Nike wasn’t anywhere near the first company to sign a player, that had been done for years, but what Nike did was put a great big needle into an even bigger bubble that was golf’s driver wars and rolled marketing of golf clubs all the way back to the 70’s.  We all wondered when the first Tiger Woods Signature irons and woods would arrive.

Arnold Palmer couldn’t sell clubs.  Jack Nicklaus couldn’t sell clubs.  Guess what?  Tiger Woods couldn’t sell clubs.   Phil Mickelson didn’t help, making news when he jabbed at Nike saying he was surprised Tiger could play so well using inferior equipment.  Nike manufactured golf equipment, clubs and balls, from 1998 when they launched their first golf ball and 2001 when they bought Tom Stites’ Impact Golf to manufacture clubs, all the way to 2016 when they stopped producing clubs, balls, and bags.  During that time, their equipment never checked out at retail, sales lagged, and eventually the company just gave up trying to make equipment, square drivers and all.  Aside from Greg Norman, it just hasn’t happened.  A great big name in golf has never been able to drive great big club sales at retail.  To Cobra’s credit, they never tried to sell “Greg Norman” clubs.  You know what has sold clubs?  Influence. 

Known as “the pyramid of influence”, the one Mark King and Ely Callaway understood so well, influence has driven sales extremely well for years.  But it’s such a fine line between an “influencer” and a “brand” unto oneself.  Tiger, Jack, Arnold; brands unto themselves.  100 players teeing off with your driver during the US Open; influence.  But.  And this is a big “but”.  I’ll let you in on a little secret.  To dominate the Tour in player count AND to dominate retail sales takes a special combination.  First, the club has to work.  You must make a great product.  (Many would say this was Nike’s big failing (Phil), not me, but many.)  Next, you must have the right price at retail.  The brand needs to be recognizable with a good reputation (that’s where our pyramid of influence shows up) And… you need retail distribution.  Good, recognizable product, at the right price, available in many places, and you have a chance to be #1.  TaylorMade, Callaway, and Acushnet had all of that.

OK, got it.

So, who won? There’s an author and business consultant named Simon Sinek who published a book called, The Infinite Game.  In the book Sinek explains, “there are no winners, only survivors”.  He goes on and explains you can basically pick your terms, did you win for a quarter? A year? Or are you measuring for a decade?  If you ask me, Callaway Golf won the 90’s because of the Big Bertha Driver.  No product created a frenzy in a golf shop like that club before or since.   (They need to send a Christmas card to the Stan Thompson family forever thanking them for the … “inspiration”.) But, 3 companies reached the $1 billion mark in annual sales, Callaway, TaylorMade, and Acushnet so I’m sure all of them would hold big corporate meetings celebrating their “victories”.  Some companies definitely lost or gave up.  The industry lost Lynx, Founders, Langert and many others.  Cobra was purchased by Acushnet and for a time relegated to game improvement status.  And Nike?  Well, Nike gave up.  They no longer make equipment.  They couldn’t make money selling equipment.  The biggest name in golf, maybe in sport, Tiger Woods, couldn’t help Nike sell enough golf equipment to make it worth their efforts.  In the Driver Wars they definitely lost.

You know who won.  We won. The golfer that wants to hit it farther won.  The golfer that wants, needs, forgiveness won.  Remember sky marks?  They are rare now, but before the driver wars? Rampant.  From a performance standpoint we won.  We hit the ball farther and straighter and we didn’t do anything to deserve this performance but buy a modern golf club.  And that’s why we lost too.  $500 for a new driver?  Those first metal woods Gary Adams was selling out of the back of his car were retailing for $50!  Now we have to ad a zero to that price?  Yup.  And it’s not over. The driver wars continue.  The driver is more profitable today than it was 20 years ago so nobody’s giving up on trying to dominate the category.  What’s mind boggling is how companies are going about influencing us to buy their drivers.

In today’s world the “Influencer” has changed and with it how the industry markets clubs is following.  This year the PGA Tour announced a $40 million bonus pool rewarding its highest profile tour pro “influencers”, those that have the greatest impact on the PGA Tour’s publicity and engagement.  Golf has recognized the value of the internet’s “clicks and views” and manufacturers are using this new process to influence purchases.  Now, it’s not enough that a player signs a contract to represent a golf company then puts their clubs into play.  It’s not enough to just be counted. It’s not even enough to be “#1 on Tour”.  Now players and their clubs need to be “seen”.  Twitter accounts need to be “followed”, FaceBook posts need to be “liked”, and YouTube videos not only watched but “subscribed” to.  Golf’s most valuable influencers aren’t necessarily the best players, they are the most “followed”.  And now, it’s a “sphere of influence”, not a “pyramid”.   There’s a new battleground in golf equipment and it’s no longer on the range, it’s on the internet.  As we move forward, it might be more important to golf companies to sign a good data analyst and Tic Toc influencer than a PGA Tour Player.  And us golfers?  I’ve never been able to hit a 300 yard drive with a cell phone, but apparently that’s coming.

#outofcontrol?