January 4, 2013 — If there is one denominator that the average timeshare sales guest has in common with many other prospects it is they’ve taken a financial beating since the Great Recession of 2008 started. According to a Pew Research Center report “the wealth of the average American household has shrunk by an estimated 20%, the deepest such decline in the post-World War II era, according to government data.”
So here’s the scoop. Should you not know, the Pew Research Center is a Washington D.C. (USA) based ‘neutral’ source of public data, opinion polls etc. & does not formulate or express their own opinions on community policy topics, etc. but instead “is a nonpartisan fact tank that provides information on the issues, attitudes and trends shaping America and the world.”
Pew is a “fact tank” as opposed to the typical ‘think tank’ and with the help of public surveys, research and other analytical methods they study the “behaviors and attitudes of Americans in key realms of their lives, including family, community, health, finance, work and leisure.”
And those “key realms of their lives” is exactly what affects our industry. So here we are at the beginning of a New Year and nationwide, indeed globally, industry marketing and sales centers are once again in full operation inviting and selling to sales guests who, as in years past, live on a fixed-income.
It is that ‘fixed-income’ that is key and while these prospects often get excited when presented ‘Endless Vacationing’ opportunities via timeshare style and want to purchase a ‘slice of paradise’ for themselves they are still dealing with other realities that stop them dead in their tracks from becoming owners, including but not limited to the following:
Car payments, inflation, groceries, rent/mortgage, dining out, tobacco/alcohol, medical, gasoline & car repairs, clothing, insurance (all types), utilities, pet care, household needs & home repairs, TV cable, wireless, c-phones, ‘land-lines’, savings, weekend trips, raising children, gifts, college, investments/retirement, family emergencies and other expenses.
Sure, there’s nothing novel about those expenses but what is new since the Great Recession of 2008 smacked the average Jane and Joe upside the head is, according to Pew: “Of the 13 recessions that the American public has endured since the Great Depression of 1929-33, none has presented a more punishing combination of length, breadth and depth than this one.
The report continues, citing that the “survey finds that 30 months after it began, the Great Recession has led to a downsizing of Americans’ expectations about their retirements and their children’s future; a new frugality in their spending and borrowing habits; and a concern that it could take several years, at a minimum, for their house values and family finances to recover.”
Additionally, “more than half of the adults in U.S. labor force (55%) have experienced some work-related hardship–be it a spell of unemployment, a cut in pay, a reduction in hours or an involuntary move to part-time work.”
There is a plethora of other ‘not-nice’ reports documenting the same basic findings but if the reader is of the ilk who consider (e.g.) ‘An Up is An UP’ or a “$40,000-$50-K annual income” is a “qualification” to be a sales guest then those readers and those with their noses stuck downward only staring at low but acceptable VPG’s need not read any further because they’ll never get it, they live in La La Land and are destined for the has-been pile heap.
As for other readers who plan on being in the ‘biz’ for years to come, they can bet their last taco that unlike any time since our industry started in the 1960s there are a colossal number of sales guests, those living in the real world, who count every penny and are financially challenged to such a degree that they are truly stressed & maxed out just trying to make ends meet!
It is just the reality, the way it is, especially for those timeshare sales guests earning less than $75,000 per year. There is no money tree for them to pick from like their home equity prior to 2008 & they’re not going to go further into debt for a lifelong financial obligation to purchase a timeshare interest that they can rent anyway for cents on the dollar and on a when-they-need/want to travel basis.
As such, three (3) things need to be modified this year for developers (and marketing/sales ‘personnel’) and these painless, non-costing adaptations need to be initiated post haste. By doing so the immediate result will be increased closing ratios, sales volume, lower recessions and higher VPG’s.
The first adjustment is that the lowest acceptable annual income for a sales guest to be ‘qualified’ should be not a dime less than $65,000.
The second alteration should be a means test during the sales stage of the marketing effort before a prospect is ever allowed to visit a sales center.
And the third transformation must be to end those sales centers with the standard T/O method and replace that antiquated sales system with top notch responsible F/B (front to back) sales executives who are true professionals and stay with their prospect(s) from “cradle to grave”, so to speak.
Those 3 amended processes are nothing new; in fact over the generations there have been a select few timeshare developers (highly profitable developers) who do just that and their bottom line is a YTD VPG three times the industry average.
The ugly cold reality is that most developer still won’t yield to the plight of many of their potential sales guests in 2013. They’ll just keep on wasting time and resources attempting to get blood from a turnip using the highly acclaimed ‘throw it against the wall and see what sticks’ methodology!
And of course then they’ll blame otherwise talented (existing) marketing & sales personnel for being ‘weak’ while those developers continue the “hire ‘em in masses, train ‘em in classes & then fire their sorry asses” practice.
You know, the practice that’s taught by Ivy League Universities such as Harvard, Columbia, Wharton, Yale, etc. through their MBA curriculums etc. and the very same processes, practices and principles adhered to by all the ‘major’ corporations when it comes to management, marketing and sales!
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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'.
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