“Taking Advantage of a Down Market to Double Product Sales to $4 Million”

When Tiger Woods shot to fame in 1997, Dale Bathum was ready to take advantage of the brighter spotlight shining on the sport.

Bathum founded his shoe company, Bite Golf Inc., in August 1996. Within a year, shoe orders were pouring into the Redmond, Wash.-based firm.

But just as Woods’s string of early victories dried up in 1998, so did Bite Golf’s sales. By the third quarter of that year, drastic action was necessary. "As the golf market took a big dive in the summer of 1998, we had too much inventory," Bathum says. "We hit a serious cash-flow crunch as our products weren’t selling through well."

To control expenses, Bathum tracked every dollar his firm spent and concluded that there were more cost-effective ways to build visibility and attract customers. In his first two years in business, Bathum relied on traditional advertising and marketing to attract golfers to his stylish footwear. For example, he bought ad space in popular golf magazines. But he could no longer afford that strategy.

"We changed our focus from marketing to cutting expenses like crazy," he says. "It was a real shift in mindset for all of us." At the time, Bite Golf’s annual sales were $2 million and the company had 12 employees.

Bathum embraced a low-cost, grassroots alternative: word-of-mouth marketing. He introduced a program where customers could earn "bonus points" for referring new customers. These points provided discounts for future Bite Golf purchases.

Meanwhile, Bathum sought an additional $300,000 from the same "angels" who invested in his startup in 1996. "Investors don’t want you coming back two years later asking for more money, but you have to spin your story and make them believe," says Bathum. His message: "Now’s our opportunity with the market messed up."

Turning Negatives to Positives

Bathum’s bigger competitors were shipping truckloads of unsold golf shoes to superstores and discount clubs such as Costco. Because these products were marked at rock-bottom prices, retailers didn’t put much energy into selling such merchandise.

"A little company like ours was able to keep our prices up," Bathum explains. "That made stores want to sell our stuff. Our shoes have always been sold in golf-specialty stores, not in the big discounters. We never devalued our brand image.

"We wanted to remain innovative, even when things got bad," he says. "We kept brainstorming to come up with fresh and unique new products, rather than standing still."

The result: Golf Assault, a military-style black boot that hit the market in early 1999. Few competitors were making product introductions, and Bite Golf’s new shoe was a hit.

Bathum projects sales of $4 million for 1999. "Orders are coming in very strong. We held together really well, and having weathered the storm, we feel prepared for rapid growth."

Writer: Morey Stettner