March 2, 2012 — It should be noted that although Part II is not representative of all timeshare developers this segment will nonetheless clearly demonstrate how most commissioned-only timeshare sales (and marketing) reps in 2012 are actually earning as much as 60% (+ -) less in real dollars than what the founding generation of commission-only timeshare reps were earning in our industry.
So here’s the scoop. I’ll be brief but bear with me for a moment so that the ‘big picture’ is crystal clear. As is often the case today, during the 1970’s and 1980’s inflation was also included in every Podium presentation and the speaker would forecast what future accommodations would cost a then extremely nervous audience all too familiar with soaring prices.
Between 1975 and 1982, for example, inflation in the USA ‘averaged’ an annual compounded increase of about 10.043% straight across the board for most good/services etc. (For the record, over the past 75 years inflation in the USA increased at an average annual compounded rate of approximately 4.5%.)
Last week in ‘Part I’ the former Westin Ilikai timeshare property in Hawaii was referenced regarding the pay system that the company introduced for their timeshare sales reps in the early 1980’s, and that income was compared, in part, to today’s pay structure.
However, that example (Westin/Illikai) included a salary (not a draw), plus commissions and full benefits. And as was pointed out last week, sales professionals are in sales for the commissions and bonuses (not a salary) so for a more ‘fair and balanced’ comparison and to keep this simple let us consider sales (and marketing) reps ‘pay’ today without any ‘salary’, bonuses or benefits.
For example: In 1983 when a commission-only rep sold $100,000 a month in volume and if that rep was paid a 10% commission (either a split between a liner and closer or the full 10% for a F/B rep) said rep(s) would earn $10,000 (excluding spiffs, etc.) for the month.
Today, however, if a rep wanted to earn enough commissions to keep up with inflation and the purchasing power (in real dollars) of the timeshare reps from an earlier era (I.E. 1983) then those TS sales reps today— selling the same $100,000 volume (in a month)— would have to be paid $23,298 in order to accomplish that objective.
Huh, you remark? That is a colossal difference! Another way to state that is to point out that if today’s timeshare rep sells $100,000 in volume for the month then the rep(s) would need to be paid a commission of approximately 23.298% (I.E. Not 10%) just to keep up with the ‘Joneses’ of the past, so to speak!
Now while you are crunching those numbers with a standard online inflation calculator (http://www.halfhill.com/inflation.html) I’m reminded of the adage that “Figures don’t lie, but liars figure”; and how ‘today’ the assertion that timeshare sales reps are making the ‘big-bucks’ is not necessarily correct.
And when you include that today additional cash SPIFFS paid out the next morning on sales made from the previous day are mostly a faint memory or ‘rumor’ of a bygone era, then the ‘big picture’ and reality should become even clearer!
Then, on top of that, are those monthly, bi-annual or annual performance bonuses and other such things like contests for that Gold Rolex watch, etc. that are no longer on the table in 2012. When you sum it all up things aren’t looking quite as bright as some people lead others to believe.
When you put it all together even the not-too-bright fictional character Jethro Bodine (played by Max Baer, Jr.) from the popular 1960’s TV sitcom “The Beverly Hillbillies” could cipher that today’s reps are taking home, in real dollars, a staggering 60% (+ -) less than their peers did not that long ago!
A few years back while in Cancun on vacation, sitting around sunbathing poolside at a TS Resort and gazing out over the beautiful turquoise Caribbean and enjoying some cold ones, a TS sales rep that I once worked with years earlier happened to walk past and we both immediately recognized each other.
As we chatted and updated one another as to what (and ‘who’) we’ve done, where we’ve been, etc. over the years my friend fondly recalled, and I quote: “It sure was different back then. The days of living off hundreds of dollars in cash SPIFFS each week and picking up those $2,000 paychecks every Friday afternoon are long gone.”
It was obvious during our conversation that my friend was not well and although we didn’t discuss the apparent illness I later learned that it wasn’t long after we met in Cancun that my friend had passed. Since then I’ve often thought about that comment of those ‘$2-K weekly paychecks and living off hundreds of dollars each week of cash SPIFFS’.
Today there are surely many talented timeshare reps who pick up that $2-K weekly commission ($100-K per year) check. But back in the day, excluding SPIFFS/Bonuses etc., that same $2-K weekly commission check would have to be, in today’s dollars (aka: income and/or purchasing power) $4,675 (or $243,100.00 per year) just to match with the reps of yesteryear.
Quite frankly I’m pretty sure today there just aren’t that many ‘Top Gun’ TS sales Pros selling traditional weeks and/or points programs who are filing their annual tax returns claiming a commissioned income approaching or exceeding one quarter (1/4) of a million dollars ($250,000.00) from selling deals on those little round tables.
And for those who are, I surely congratulate them for their accomplishments and for at least matching their predecessors’ purchasing power (income). But for everyone else “A Timeshare Race To The Bottom” is real, alive and is becoming even worse than has already been illustrated.
So stay tuned next week for Part III and yet another huge eye-opener on how that ‘race’ continues to spiral downward and out of control while the developers themselves have not gone in the same (income; profit) direction.
I.E. Brace yourself Betty Lou and Billie Bob, because someone is getting …!
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