August 29, 2014 — Seasoned timeshare sales and marketing professionals, including most developers and all levels of their management, are familiar with 20-60-20 rule whereby among any group of reps 20% are the top ‘writers’ – 60% are average – and the other 20% are less than stellar producers. But did you know that ratio also applies to the buyers of most products and services including slices of Paradise? Allow me to share.
So Here’s The Scoop: Within sales and marketing departments, the percentages of those three categories will fluctuate depending on other issues such as training, management style, products or services being marketed and sold etc. but when it comes to basic sales efforts to timeshare ‘sales-guests’ (aka: prospects) the following rule of thumb would be:
For every (e.g.) 1,000 ‘sales guests’ approximately 20% will be inclined to purchase a TS upon the conclusion of the presentation. And while the next group — the 60%er’s — are up for grabs and definitely need to be highly excited, encouraged, motivated, sold and closed, the next group — the remaining 20% — will not, for all the known and legitimate reasons, purchase a TS under any circumstance.
Those real world reasons include but are not limited to: A poor sales presentation and/or closing sequence; prospects being too young or those who’ve aged past their travelling years; floundering relationship issues with their significant other; and of course affordability, employment or business situations and health issues, etc.
But to get back to sales guests in attendance (and assuming a full, complete, professional & upbeat sales presentation was followed by a superior closing sequence), within the 20% (‘inclined to purchase’) group about half (10%) are pretty much laydownskies anyway – meaning they will buy when asked (closed) the first or second time and w/o much hesitation (objections/concerns, etc.) whip out their credit cards and become owners/members ‘today’.
Now I assert this based not on published studies, reports, theories, opinions or just some estimation, etc. but instead on hands-on sales, management and marketing experience spanning 3 decades of being in the TS trenches.
So if a sales center is producing an (e.g.) 18% net closing ratio from every 1,000 sales guests they engage the team obviously generates 180 TS contracts. However considering the aforementioned 20% ‘inclined to purchase’ group and the 10% laydownskies factor within that group something doesn’t add up and/or went wrong.
I say that because of the reality that 20% of the 1,000 sales guests in the ‘inclined to purchase’ group are a very good ‘shot’ (prospect) and should generate 200 ‘deals’ of which the laydownskies (half of the 20%) would represent 100 of those 200 sales.
However, in the example of a sales team with a net closing ratio of 18% the sales center only generated 180 contracts and to my way of thinking that represents a minimum loss to the developer of 20 contracts per every 1,000 qualified sales guests.
And that begs one simple question: Whatzup with the remaining 82%? The costly 820 sales presentations/prospects out of every 1,000 invitees – where the end result is a constant reverberating chant of ‘NO THANKS’?
Even more important, for those sales centers that calculate ‘Exit Deals’ (trial or discovery programs etc.) into their total sales centers’ net closing ratio and using the 18% in this example, that should suggest all is not well at all and corrective actions should be the order of the day.
To improve net sales and excluding other marketing issues, etc. the first tweak to improve results is that developers have to eliminate the 20% known ‘NO THANKS’ crowd from their sales centers, those who ‘will not, for all the known and legitimate reasons, purchase a TS under any circumstance’.
That’s correct. Put an end to touring those from the carefree youthful newlywed or cohabiting mob, the well traveled elderly seniors (including those with serious health issues) and the financially challenged folks as well (e.g.) a married couples (or singles) who couldn’t care less about vacationing let alone in anything larger than a no-frills standard 250 sq ft. motel room – even if it means doubling up with family or friends while vacationing.
(Sidebar; Front desk Check-in chat at Motel Hell: ‘Ah shucks, no thanks Ma’am. It’s just the four of us so we’ll take one of them rooms with them two double beds. Gosh, it’s only a place to lay our heads down at night and good old Ralph has volunteered to get our coffee each morning from the Denny’s next door (snort – snort)…’)
And therein is where the cost-minded developers need to begin to clean house. Weed those sales guests (20%ers) out from the presentation in the first place, don’t let them in the door, and replace them with more prospects from the predisposed crowd among the scores of millions of potential sales guests who like to travel, who do or will travel, who prefer upscale accommodations when they vacation and who can afford to travel.
Caveat: Accomplishing that simple task would generate a financial windfall of such magnitude among those developers who did ‘clean house’ that within seconds of reading their new daily income, cash-flow, balance sheets and sales reports they’d likely begin rubbing their hands together while simultaneously laughing hysterically and weeping profusely with joy.
And with that warning out on the table, once developers have regained their composure perhaps it will be time to finally tweak their antiquated, functionally and economically obsolete TS selling and closing processes – and everyone in ‘the biz’ will be happier & earn much more moola in the Land of Time.
Oops, I just found a flaw to my thinking because I just calculated the colossal financial gains from doing that too and the net results would be so overwhelming, so swift and so immense that most developers could be driven to sudden & incurable madness — something none of us ever want to witness again.
Good Luck Out There
© Copyright Inside the Gate. All rights reserved.
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.