November 9, 2012 — Last week we explored several causes which over many years led up to and contributed to the huge hit taken by all of us from the Great Depression and in all, my best estimate based on ARDA (American Resort Development Association) and other industry reports is that as an industry we’ve lost upwards of $20 BILLION in sales (gross revenue) over the past 60 months.
So here’s the Scoop. IMPO the future looks very promising for our industry if developers, marketers and sales reps adjust to current and impending market conditions. And we must do so because whether we like it or not ‘things’ continue to transform and the next 60 months will go by, with or without us adapting, just as fast as the last 60 months passed.
Therefore I’m not going to soft-sell this with analogies, comparisons, demonstrations, charts, etc. as I surely need not waste the readers’ time trying to get through to ‘others’ who are closed, narrow or of a mule like stubborn mindset because they are living well in the land of ‘Time’.
The following cures are not necessarily new ideas but the results (aka: Stats) at the few sales centers that use one or more of these ‘adjustments’ are impressive and make the difference between one developer yielding a net YTD VPG of $1,100 Vs another developer in the same region selling an equal/comparable product but who nets a YTD VPG exceeding $3,000.
I will be brief and if anyone requires further discussion (details) on any or all the topics covered then feel free to post your comments, remarks (good or bad; agree or disagree) or suggestions below and/or contact me via e-mail and ask any specific questions that you may have.
Lastly, the following will not be all-inclusive, applicable to all timeshare developers or necessarily in any specific order of importance, etc. So here we go.
A.) Most developers should start a B2B (business to business) sales effort initially in their specific region/area of operation. This would begin with developing a ‘corporate’ timeshare package (or simply modify the current ‘plans’) that appeals to business owners.
Then hire one decently paid phone professional whose sole purpose on planet earth will be, six hours each business day, to call up these local owners, introduce the developer (company), the ‘concept’ (the TS plan), etc. and then request, schedule and set appointments with the business owner(s) who agree to meet in person with the developer’s rep.
Each appointment would be followed up by one front to back timeshare sales professional who will go to the owner’s office and present the benefits and features of the timeshare plan to all decision makers of the company.
Additionally the sales pro will present the timeshare plan as a potential employee benefits package, including demonstrating to these business owners how they can use their TS ‘perks’ on an as needed basis to close a deal now and then or on a limited basis as a promotional sales tool to acquire new ‘buyers’, or give a bonus week(s) to their best clientele, etc.
B.) With regards to acquiring sales guests for a developer’s sales centers; it is high time and long overdue to ‘focus’ marketing efforts on a niche and known market and stop ‘hawking’ to the masses. Stop touring the 25-30 year olds. Stop touring anyone over 60-65 and it is time to stop qualifying any ‘household’ earning less than $70,000 per year!
C.) However it is also time to casually ‘pre-sell’ all truly qualified prospects before the ‘invitation’ to the presentation is solidified specifically looking for those ‘red-flags’ that we ALL already know exist and are the real reasons why specific prospects can’t and flat out won’t purchase a timeshare interest.
With that approach and using simple discovery methods red flags such as ‘age’, ‘health’, ‘financial considerations’, ‘marital status’ & ‘use/need’ issues etc. are revealed and the ‘qualification’ standards can become more flexible (aka: A management call) during the process. Plus with this approach all those costly, wasteful and time consuming sales guests who shouldn’t attend the presentation in the first place will be weeded out.
D.) On another topic it would be wise for some developers to offer a fee and percentage based ‘license’ and/or ‘franchise’ type of opportunity to seasoned industry sales professionals interested in setting up their own off-site marketing and sales operation that they actually own and will exclusively represent the developer’s resort, timeshare plans, etc.
E.) It is also time to end accepting small down payments such as 10% and unless doing so is absolutely necessary the required initial deposit should be in the 20-30% range (plus any closing costs).
F.) With a more financially qualified sales guest(s) that brings me to net selling prices which, when a timeshare project (resort) merits one— including any real and unique additional ownership benefits of the timeshare plan— an immediate price increase should be implemented by the developer.
G.) Next, it is time to eliminate the typical T/O selling system and replace that entire antiquated process with a more controlled sales environment; that being with a highly professional front to back sales team who are seasoned, well trained, disciplined and business savvy timeshare sales professionals who understand that successful ‘selling’ is indeed a profession and requires set skills, steps, etc. that the average sales people simply do not possess.
H.) And while we’re at it, at many sales centers if the current sales manager, PD, DOS etc. were removed (regardless of the reason) the fact of the matter is the sales reps (and sales center) would continue to produce the same basic results during the managers’ absence.
That is why it is time to get rid of any manipulative & narcissistic sales management types who spend their time mostly prancing & farting around the sales centers merely focused on controlling their sales lines using valueless ‘management’ and intimidating tactics such as: ‘you’re on overage’, ‘you’re on the bottom of the list’, ‘a sale is made every time’, ‘where did ya get weak’ etc.
Replace those managers with proven individuals who will implement a competitive but harmonious professional & progressive working environment and a standardized continuous rotating front to back sales line with a primary goal of constantly striving to improve closing ratios, VPG’s, etc.
I.) Big, juicy daily cash spiffs must also be re-introduced. Reserve Funds must be ended. Timely monthly payment schemes (installments by new owners) in order for the reps to be paid their full earnings must come to an end as well as all ‘charge-backs’ (once the rescission phase has lapsed).
J.) Being that every new TS owner (buyer) costs the developer the same marketing expenditure whether they ‘buy’ a one week (or points equivalent) program or a 4 or 6 week program the sales rep should be paid a bonus for selling all new owners multiple weeks plans.
K.) And although there will always be a place for Human Resource personnel and management when it comes to locating, hiring and selecting all marketing and sales professionals, that duty and responsibility must be placed, at least in part, on the sales/marketing manager’s plate as they are ultimately responsible for all sales results.
There are other adaptations that are required as we evolve with the ‘times’ that will increase sales, profits and lower costs including adapting the TS ‘plans’ (product) to meet today’s consumer (buyer) needs, but I’ll cover some of those thoughts on another day.
For now I’ll close with one final (‘cure’) recommendation required of any developer wanting to be in this business for many years to come. And that is to simply start making the adaptations now (aka: ‘Today’) even if those revisions are taken in ‘baby steps’.
And it also means that when developers seek counsel with all their advisors (Attorneys, Accountants, Investors, Partners, Executive Management) instruct them to seek ways ‘it can be done…’ as opposed to their traditional retentive approach of ‘we can’t do that…’; ‘been tried before …’, ‘it’ll never work…’, ‘why change, we’ve always done ‘it’ this way…’
After all, developers in their own right are the Big Kahunas, The Big Cheeses, The Top Dogs, The Ultimate Players and the ones who put it all on the line every day. Because it is your company, your name and your money and as you already know only too well: Net Sales Trumps All!
To send tips, comments, suggestions, agree and/or disagreements etc. email Scoop: [email protected]
Contributing sometimes extravagant, bombastic, emotional, pompous or even pretentious writings about the timeshare industry, Scoop covers an array of industry related subjects each week including inside information, tips, scandals, interviews, forecasts as well as new (good or bad) products and services--- and, of course, all the 'Good', the 'Bad' and the 'Ugly'.
Stay tuned for what is sure to be a fun ride and check back to Timeshare Scoop du Jour each week for more of the inside scoop.