February 27, 2015 — ‘Kissing a lot of frogs’ to find that special person can be time consuming with no guarantee of the desired results. The same can be said about a sales career in our industry. That is why every sales rep reading this week’s column needs to seriously consider working only with developers’ that have an acceptable sales guest income requirement. That is if the reps care about their families, their security and financial futures. This is, after all, 2015. It is not, as some developers’ apparently believe – 2010, 2005, 1995 or 1980!
So Here’s The Scoop: First and foremost the sales reps that I’m speaking of must understand that I’ve been a part of this exciting industry for more than three decades. I have seen it all & done it all over the years but sadly, today, there are still timeshare developers worldwide and their management who continue to run their companies as they did decades ago – including their policies regarding sales guest income qualifications.
To illustrate where I’m coming from; first consider a 1981 U.S. Census Bureau report:
“The average American family experienced a significant decline in real income between 1979 and 1980, according to results of the March 1981 Current Population Survey (CPS) conducted by the Bureau of the Census.
“The 1980 median family income of $21,020 was 7.3 percent higher than the 1979 median; however, a 13.5% increase in consumer prices between 1979 and 1980 caused a net decline of 5.5% in real median family income.
“This represents the first statistically significant annual decline in real median family income since 1974-75 and the largest decline recorded in the post-World War II period.
“The sluggishness of real income growth during the last decade is evidenced by the fact that 1980 median family income was about $1,330 lower than the 1973 median ($22,350) in constant dollars.
The study can be read: http://www2.census.gov/prod2/popscan/p60-132.pdf
FYI: In 2015 – it is argued by many experts that the trend continued to this day.
Back in the early 1980’s some developers’ annual income requirement for a sales guest to be deemed a ‘Q’ was in the $20-$25,000 (gross) range. Today, based on the U.S. CPI (Consumer Price Index) the same gross annual income should now be between $59,000 – $73,000.
And yet, here we are 35 years later and in 2015 some developers and their management are adamant that a (e.g.) family household size of 3, 4 or more with a “combined household income” of $40,000 (gross) is a solid selling opportunity ( a ‘Q’).
To put that another way, and using the U.S. CPI to adjust the dollars, had those developers been around 35 years ago (and some were) then in 1980 their income requirement would be, on the low end, not $20-K (gross) but instead $6,366 less and they’d invite sales guests with annual gross incomes of $13,634.00 to their sales centers.
You’d think that is all that needs to be said and that the developers’ I’m talking about would automatically do what any reasonable business person would do – annually adjust, in this case, the income requirements of their ‘shoppers’ to current economic and financial realities. But, no, they refuse – for reasons I won’t go into today.
So allow me to briefly paint the story another way by introducing you to Homer and Elma Nicefolks. These are the sales guests most reps dread and are only too familiar with as a result of attempting their hardest to sell the Nicefolks every week – month – and year after year – in perpetuity!
Handsome Homer, a local delivery truck driver earns $23,800 (gross) annually and his very hard working and lovely wife Elma waits tables for a nationally recognized restaurant chain; with tips, Elma’s 30 hours a week waiting those tables adds an extra $16,200 (gross) per year into the Nicefolks “combined household” coffers.
Together the Nicefolks do earn $40,000 (gross) per year – they are ‘Q’d’ – and the reps working with developers’ with that income threshold will ‘go on tour’ with Elma and Homer (else the rep will likely be fired on the spot for refusing…).
Now ponder the following to really grasp what I’m saying.
According to the U.S. Census Bureau, in 2011 a family of four (4) w/a household income of $23,020 (gross) – as defined by the “Office of Management and Budget” and using the “Consumer Price Index” – is living in “poverty”.
Sidebar: Using the CPI, in 2015 that same amount and poverty level for a family of 4 is now $24,746.65 – see how that happens to us all each and every year!
But in the case of Elma bringing home an extra $311.58 a week, before tax deductions, keeping her family barely above the official poverty level – some timeshare developers and their well paid management actually want their reps to believe that the Nicefolks (with two little tots at home who have all sorts of financial needs) are instead going to part with those few, precious and desperately needed extra family dollars and buy a timeshare plan!
These developers apparently don’t ‘get it’ let alone that according to the U.S. Department of Agriculture the weekly grocery costs (eating at home) for a family of four (4) just like the Nicefolks, on the “Thrifty” end is – “$146.00” (weekly) and on the “Low Quality” end it’s “$191.00” (weekly) Then, they report, the “Moderate” end being “$239.00” per week and the “Liberal” end at “$289.00” (weekly)!
And in case that isn’t sinking in, again, we’re talking gross income — you know, before all mandatory Federal/State deductions including monthly rent/mortgage payments, standard living expenses, costs to raise children, the occasional dining experience at the (e.g.) Golden Arches, unforeseen household or car repairs, car & insurance payments and emergencies, etc. — then consider this as well.
The developers’ and their management that I’m warning against also have the unmitigated gall to insist their reps unconditionally accept – as they endlessly preach – that Homer and Elma are not only ‘Q’d’ they’re a damn good shot, because, after all, “An Up Is An Up’ and either “You sell them or they sell you”!
If everything I’ve said still isn’t getting through, then try some good old basic timeshare math and look at it from an income earnings perspective; make that a lack of earnings.
As an example, if a rep works 50 weeks this year and goes on ‘tour’ with just 3 Nicefolks each week, that is 150 times in 2015 whereby their opportunity to generate an income is deliberately and drastically limited by these developers & their management.
Now add next year’s (2016) Homer and Elma sales guests and now 300 times have come and gone whereby the rep’s income generating opportunity continued to be tremendously restricted.
Look at just the next 36 brief months; the total is now *450 times (and if you want to see a real example of “time is money” review the calculation below)
And while I’m ‘making new friends and influencing new enemies’ – IMO, some of these developers and their management likely think their reps may not be the brightest bulbs in the marquee.
They may very well be thinking, why would their reps not, if they have the drive, bona fides, intellect and talent, etc. be earning a much better living ‘down the street’ with other developers and their management who do ‘get it’.
Lastly, I would be remiss if I didn’t note that just because sales guests have gross annual incomes exceeding $50,000, $60,000 or $70,000 (and more) that doesn’t mean they can afford to purchase and own a timeshare plan; as any one of us can be at any time, shall we say, financially challenged.
But with family sizes of 3, 4 and more who are earning a “combined household income” of less than $50,000 (gross) in 2015 being invited to sales center nearly everywhere? They are almost always so challenged and when they do occasionally purchase it’s on the low dollar end including those ‘exit-trial’ packages.
And, as most everyone knows, because of family budgets, etc. those are the new owners/members who often cancel within the rescission period anyway – and do so in record numbers!
Hence the caveat this week – It’s time for the smart reps working with the developers & management that have low sales guest income qualifications to make the change while they still can and while there is still room for them to increase their income and find a long-term ‘home’ somewhere else.
So do so ASAP and get on board with the few and the very best timeshare developers and their management around the world in this incredible and awesome industry.
Good Luck Out There
*If it weren’t for all the Nicefolks as sales guests and excluding other ‘issues’ – a well trained professional timeshare rep in our industry will always close NLT 30% (net).
As such, 450 Nicefolks over 36 months replaced with higher income sales guests should generate the following additional income (per rep).
450 x 30% closing ratio = 135 contracts. Average contract: $15-K = $2,025,000 Volume. Multiply that (volume) by the percent the rep would earn. That will give the rep an idea of the additional earnings they are losing on those magical little round tables.
Now think of 60 months – or ten (10) years – OUCH – who can afford to lose that kind of dough – for the work time they’re going to invest anyway – aka: “Time is money”!
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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’.