March 23, 2012 — This week we’ll classify timeshare sales and marketing reps into three categories; the ‘newlywed’, the ‘nearly dead’ and the third group consisting of everyone else. If you’re in cat 1 or 2 you need not pay attention to the following but if you’re everyone else, this is your wakeup call if you’re going have a financially rewarding career in the Timeshare industry.
So here’s the scoop. Last week it was clearly and factually demonstrated that a sales (and marketing too) rep launching their career in our industry this year (2012) will have their income (aka: purchasing power in real dollars) erode by approximately $43,315 over the course of their first 60 months on the ‘job’. Now we’ll demonstrate how the income erosion exceeds $100,000 over 60 months.
That is correct! No ‘heat’, no ‘smoke’ and no ‘mirrors’; just plain cold hard facts! And to further illustrate what affects income let us consider one aspect of the sales and marketing system that contributes more losses and that is used by the good folks at Starpoint Resort Group (a sales and marketing entity for GEO Holidays Vacation Club) under the leadership of CEO Michael J Muldoon.
Mr. Muldoon has been around the ‘biz’ since the 1980’s and should know better but as of this writing the company’s marketing and sales savvy is firmly convinced that a “married couple”, each of them being “25 years old” with a combined household (gross) income of “$40,000” is a ‘good shot’ and worthy of an expenditure of (est.) $400 to $500 to get the couple in the door of the sales center.
Muldoon apparently operates on the notion that an “up is an up” and that such sales guests are financially capable and fully qualified to squander a portion of their measly ‘net’ income for the down payment on a timeshare plan, pay several hundred dollars in monthly payments for years, pay annual maintenance fees, exchange club dues, purchase airline tickets, go on cruises and then have sufficient disposable income (‘mad money’) to spend while on their ‘holidays’, etc.
Now, there is no shortage of the ‘Muldoon’ marketing and sales methodology in the timeshare business so here is a challenge to Mike and his ilk. I want you good people to take your crack ‘A’ Team ‘marketers’ and put up about ½ a Million dollars and have them round up 1,000 sales guests who meet the aforementioned ‘qualifications’. Then drag ‘em into your sales center over a four week period and report back to the ‘The Gate’ your ‘net’ STATS!
And by the way, Mike, if your Ace team has a problem locating those 1,000 sales guests in four weeks who are married and “25 years old” just remember, per your promotional materials there are also those ”75-year-olds” you welcome and can go after as well; in either case we’ll wait with bated breath for the net results.
Now while Mike and his high-powered executive team is crunching those numbers, what I want all timeshare sales reps (and marketing reps who also get a % on each sale) to do is to make a net sales projection, with those same type(s) of sales guests (aka: qualified tours) over the next 60 months by calculating taking just one (1) such ‘tour’ ‘each week (on a 50-week work per year) for five years.
For those reps who may not have a calculator handy that means you’ll be selling to and trying your best to ‘close’ 250 of these ‘hot leads’. Now compare those net sales results to taking the same very precious ‘sales time’ and ‘pitching’ to 250 prospects that are, say, married couples whose average age is 56, are empty nesters, home owners with a net worth of $300-K and a combined annual income of $85,000.
With the latter prospects a decent 20% sales rep (closed deals) will quickly see the value of those prospects represents (using a $15-K average sale) a net sales volume of $750,000 and at a (e.g.) 10% commission that is an additional potential income (‘above’ what the rep is earning) of $75,000.
Conversely, with those ‘other’ sales guests surely some exit programs will be sold, as well as a few EOY deals and/or other low ‘thousand’ dollar timeshare plans but it would be gracious to suggest that the ‘net’ volume wouldn’t even equal 50% of the ‘preferred’ prospects and that represents about another $40,000 in lost income bringing the now five year total to $83,315.
Of course that is not quite accurate, as in most sales centers every time a rep ‘blanks’ they usually move down the ‘line/list’ and the next day they might not even get ‘out’ and have an opportunity to make a living. And should that happen say just once a month over a 60 month period— and using that 20% and $15-K ‘deal’— that is another $18,000 in loss income and that brings the 60 month total to a realistic and very conservative loss of $101,315.
But what the hell, it’s only a loss of about $20,000 per year! Maybe even a tad more if you include those reserve funds being held (and rarely returned) without earning interest as well as those often bogus charge-backs and especially the ones with the old ‘timely-payment’ clauses.
And don’t get all rogue now by crunching the numbers beyond 60 short months (as in a 20 year ‘Career’) as you and your family will likely not be sleeping well at night and those long hours of tossing and turning can also cause cold sweats, fevers and bad dreams, etc. and may require a visit to the Dr. Office.
Of course if you aren’t provided ‘health’ insurance then you’ll have to pay those darn medical bills yourself so check with your tax professional as you may be able to deduct the ‘tab’ off Federal and/or State income tax liabilities.
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©2012 Inside The Gate