September 23, 2011 — In the early 1980’s some timeshare developers had an annual household income requirement (for a prospect to tour a sales center) of $25,000. Adjusted for inflation, in 2011 that same household now needs to earn about $59,940.
And thinking about inflation, did you know that an $11,000 ‘week’ back in the early ‘80’s needs to sell today for about $26,400 in order for the reps in 2011 to earn enough commissions and have the same purchasing power their counterparts had back then (assuming the same percentage basis is being paid today)?
Speaking of earnings! Back in that era a ‘deal’ would almost always pay out a 1% ($60-$200 + per ‘week’) SPIFF the very next morning! Talk about getting reps pumped up for the day! And it was true that given a couple of those puppies each week reps would bank their checks and have a damn good time living off their SPIFFS!
Conversely the $1 paycheck was given birth in that time. Sometimes when payday rolled around and a rep was expecting a big juicy check they instead opened up the envelope and discovered a check for just a buck!
Instead of deducting any charge-backs from the reps’ reserve funds or spreading the charge-back out over several checks the developers with such a policy would take it all out of commissions earned and it was truly a ‘screw-you-pal (and their families)’ perspective!
And speaking of those SPIFFS and $1 checks some sales centers also had what was referred to as a ‘fish-bowl’ whereby ‘x’ dollars were allocated and set aside to pay out as a (small) ‘advance’ to any reps who needed a few bucks quickly for bills, etc. until payday!
Back then ‘singles’ (male, female and/or any ‘combo’) were toured but they were mostly NQ’d and/or handled as a courtesy tour; they went to whoever was on the bottom of the list.
And by the way, when reserve funds were first introduced in the ‘biz’ it was for two primary reasons. One reason was to protect the developers from ‘heat merchants’ (cons, thieves and liars) who would slither onto a sales line somewhere, tell the ‘prospect’ whatever it took to close a deal and write a ton of business in (e.g.) 30 days, make a quick $20-G and then move on, leaving the developer holding the bag.
The other reason was a form of control over the reps, the idea being that if the developer was holding on to thousands of dollars in reserve funds that belonged to the reps they were less likely to move on to another track.
Here’s an oldie-but-goodie. When RCI first introduced exchange/ownership movies and developers played those during the sales presentation, the net sales results either remained the same or often plummeted for two reasons.
One, because the reps, mostly ‘liners’, thought the movie and ‘Star-Spokes-Person’ would sell the deal. Oh, so wrong!
The other reason, which goes hand in hand with the first, is that sales training was non-existent. If a rep could pretty much breath they were hired, ‘rode’ (went on one tour) with one rep on their first day (often not a very good one at that), and then the ‘green-peas’ were tossed to the lions like raw meat!
Hence the industry ‘aphorism’ was born, in part: Hire ‘em in masses, train ‘em… then fire their sorry asses (and keep their reserves)….
It was also true that many sales centers in days gone by would have their reps break bread (aka eat breakfast) with their tours so that they had a better opportunity to ‘warm-up’!
But today, mostly because of those damn ‘bean-counters’ who never sold a week in their lives, that practice of ‘breaking bread’ is as rare in the USA as cash SPIFFS are most everywhere!
These days most reps are W-2 employees but in years gone by they were mostly 9’ers (1099’ers; aka Independent Sales Contractors) which allowed for an environment of discrimination, racism, sexual harassment, overtly preferential treatment, fist fights and prejudices, etc.
And back then ‘love lines’ were the preferred sales management system, allowing ‘ball-less’ SM’s to (e.g.) literally ‘starve out’ certain closers that they feared, didn’t like, or who wouldn’t kiss their sorry pathetic Asses. Other (male) managers used the love line to literally get ‘laid’ by the few gals who wanted to become ‘closers’…
There was one SM in particular who was very well known and that sadistic bastard would actually go up to the contracts office (after hours) and pay a secretary to meet him their for a rendezvous to alter the DOCS out of the name of the closer and put the revised ‘deal’ in his name or pass it along to one of his ‘pals’.
That piece of work ultimately found himself in prison on sexual assault charges but throughout his reign of terror, even though the developer (still in the ‘biz’ today) knew of his many escapades, he was allowed to continue to rule the nest despite the fact that his tactics produced sub-standard closing ratios, VPG’s, etc.
When Mexico timeshare sales first starting making big gains in the early 1980’s recruiters would come up to Hawaii and Florida to hire the top talent and sweep them away south…
They would also (usually) pay their round-trip airfare upfront and have housing waiting for them (sometimes it was good and sometimes not). Some of those who went ‘South’ became very wealthy while others just became party animals, like there was no tomorrow; and some are literally buried there today (as in 6ft under)!
Remember those White Weeks? Unbeknownst to most sales reps those weeks were pure gold from a sales perspective. Whenever a ‘tour’ mentioned that they (e.g.) “don’t like crowds” and/or “only travel during the off-season” that was a deal for sure!
And the top reps could load the soon-to-be new owner up with 2-4 times the amount of time (‘weeks’) for about the same price another ‘new owner’ would pay for just one Red Week (or two Blue Weeks)!
Plus, long before developers got in bed with East-Coast funding, back then cash deals were King and those same heat merchants would also pitch the virtues of buying ‘White’ in a Studio and trading into a ‘Red’ 2-3 Bedroom.
And because cash was King they’d earn a couple extra ‘points’ on each deal where they could get the new owner to ‘cash-out’— if not right there on the tables then w/a ’15-30 day cash out option’ letter.
Another oldie-but-goodie was ‘wired’ tables. Some developers and/or management would actually ‘wire’ the table so the closers could excuse themselves and go to the back area where they would listen in on what John and Mary were saying. Then the closer would come back and ‘slam’ the deal.
In other sales centers ‘management’ would use a walkie-talkie and when an existing owner was ‘boxed’ to ‘buy’ (if they could just get rid of that darn week they already owned) the manager, right in front of the soon-to-be buyer would speak to someone ‘important’ on the other end of the walkie-talkie and request a price and/or value to ‘buy back’ (hence, the perfected form of the ‘table buy back’) and/or ‘trade-in’ the owners’ old TS. That tactic spread like wildfire in the biz.
Of course no such buy-back or trade-in existed and the prospect would then buy the new TS only to discover when they returned home that they still owned their ‘old’ TS plus the new one(s).
Accelerated Use was also introduced at some 25 year RTU (right to use) projects in Mexico and the Caribbean and sold on the premise that exercising that ‘benefit/feature’ was, as all travel is, based on and/or is subject to “availability”!
It was a ‘hot-hot-hot’ deal, and some TS Plans actually had that feature in the writing (in the ‘DOCS). Retirees or anyone else not wanting a ‘lifetime’ (or decades) commitment jumped on those TS plans like white on rice!
And speaking of ‘hot’ stuff in Mexico and the Caribbean, etc: ‘Closing’ was most often nothing more than Juanita taking the new owners’ file (DOCS) and tossing it, sometimes even in alphabetical order, into a standard file cabinet!
Yet for that ‘closing procedure’ developers would (and still do) charge as much as $1,000 (‘Closing Costs’) per ‘interval’ and some developers would (and still do) kick back a portion of the CC to the closer as a SPIFF!
Party, party, party! Back in the day, just before Henry R. Silverman of HFS (which became Cendant) paid Christel DeHaan $500 Million (1/2 a billion dollars) to buy RCI, Christel sponsored an annual ‘bash’ for all the top timeshare sales/marketing producers in the biz to meet in a place like Cancun, etc. and a great time was had by all!
In Hawaii tourists would flock to sales centers when OPC’s offered them a small box of Pineapples to go on tour, and in Mexico a cheap blanket would turn the ‘trick’ if accompanied by an even cheaper small bottle of rotgut Tequila if the ‘mark’ would just agree to spend a few minutes to “Come see my new hotel; next trip you come here you stay my hotel. Yes?”
In 1983 one particular timeshare developer vowed to his sales staff that if the cost of tours ever hit $100 (then his ‘hard’ cost was about $75) he was going to close down the sales center and walk away from the business. He’s still in the ‘biz’ today!
Long before drug testing, background checks and other such (mostly) ridiculous anal probes Timeshare was a wild and crazy time with some reps having their initial ‘POP’ (line of ‘coke’, a joint or a drink) just before the “first wave”.
And then they’d snag a ‘refresher’ before the “second wave” followed by another to kick off the 3rd and by the time ‘Happy Hour’ rolled around at the end of the day they were indeed ‘Happy’— especially when they closed some deals that day.
That dandy little practice was in the USA; but in Mexico and the Caribbean there were some sales centers with full-service bars (some still exist to this day) within arm’s reach of those little round tables.
Closers would come to work in the morning and could order up a hefty Bloody Mary or a Ramos Fizz just prior to the morning meeting to ‘kick-start’ their day.
And because most sales lines there closed around noon-ish or 1:00 P.M., by the time high noon rolled around and having had a few more ‘cold ones’ with their ‘UPS’, well, you get the picture…
Along w/cash SPIFFS, Gold Presidential Rolex watches were passed out like candy to the top Producers as were gold chains, gold coins, rings and other flashy jewelry.
A ‘bad’ week in commissions in the early ’80s (for the ‘Top Guns’) was $1-K; and they worried a little wondering how they’d make it through the week on such a small amount of money!
If a sales manager tried to put a ‘Producer’ (Closer and sometimes a liner) on overage or the bottom of the line/list for (e.g.) missing that morning sales meeting (regardless of the reason), etc., some closers/liners were known to tell the manager to stick it where the sun doesn’t shine (to put it kindly) and off to the next ‘track’ they went.
And when the sales guests made it into the presentation and they ‘bought’ but it was discovered during the ‘paper work’ they had no credit cards or the cards were maxed and the new owner didn’t have their check book handy for the ‘down’ that was no problem.
Then, the Closer would get the name of the new owners’ Bank and write up one of those nifty ‘counter checks’. And if the new owners didn’t know their bank account number, etc., the Closer –following the instructions of ‘management’– would just make one up and actually get paid on those deals on pay day!
There is much more that went on and feel free to share (here) if you like. As we near 2012, as we’ll all agree, there are remnants of those days all around the ‘biz’ to this day.
It is good that some things have changed, but for those who weren’t around I can tell y’all that for those who survived, hung in there and prospered, it was the ride of our lives as we (collectively and side by side with the developers) built a multi-billion dollar industry that today spans the globe!
And that’s the way it was…
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©2011 Inside The Gate