February 12, 2016 — I’m pretty darn sure that folks at the developer level, all other C-level management positions in the company and all the way down to lower echelon marketing and sales management folks as well as many front and back-end sales professionals would likely support the notion that the most important sales statistic in our industry is the individual and sales center(s) net YTD (Year To Date) VPG (Value and/or Volume Per Guest).
So Here’s The Scoop: I, too, agree with the importance of the VPG but on the other side of the coin I also believe that what is equally important, maybe even more so, is the individual and sales centers net closing ratio (CR) because if you judge the strength of any timeshare marketing and sales results merely on their VPG of (e.g.) $2,200.00 yet they only produce a (e.g.) 15% net company CR – then there is absolutely no doubt that a whole bunch of sales contracts and revenue is being lost.
For illustration & simplicity purposes let’s say Scoop’s Timeshare Emporium & Furniture Barn pays a lot of money in marketing costs to bring in 100,000 qualified sales guests per year. And let us further say that Scoop’s marketing and sales efforts generate an average contract price of $18,500 each time a sales guest signs on the dotted line for one of Scoop’s super deluxe vacation ownership plans.
And let us further say that Scoop’s team nets a 15% CR. That, and check my math, means that Scoop’s company generated 15,000 ‘deals’ with a face contract value for the year of $277,500,000 (Million).
Oh, and also for demonstrational purposes only – again, to keep this basic – all those sales were cash deals and each TS contract was paid in full (PIF) within 30 – 90 days of signing; wouldn’t that be great?
Now Scoop is damned pleased with those results because with a net profit margin of say 18%; Scoop personally bagged a cool $49.9 Million – plus all the other perks associated with being the CEO of Scoop’s privately held LLC.
And for the record most of Scoop’s managers, at all levels, made out pretty darn well as did all of Scoop’s top 20% marketing and sales producers – and the entire teams effort generated a net YTD VPG last year of 2,775.
Then comes along some know-it-all type who dares to suggest that Scoop’s team likely missed a couple of deals out of those 85,000 sales guests who didn’t buy last year.
This person also had the insolence to remind Scoop that in the real world working on those magical little round tables about 10% of all sales guests – as long as they are treated professionally and receive a complete, upbeat, knowledgeable and somewhat entertaining presentation including a methodical closing sequence – are going to pretty much buy without any real ‘sales’ resistance.
Scoop is also reminded that those sales guests (10%) are aka ‘Laydownskies’, which means Scoop’s team could only persuade about 5.55% of the other 90,000 sales guests that owning a vacation plan – was a great idea for them after all.
Nonetheless, with Scoop’s team producing a 15% closing ratio 85,000 of Scoop’s costly sales guests, after a two or three hour presentation said NO THANKS, collected their premiums (gifts), left the auditorium and went on about their daily lives.
And there is the ‘kink’ because without doubt, NLT 10% of those 85,000 ‘NOs’ should and could have been sold & closed – and using the same average contract price from those who did buy (the 15%) – that would have generated Scoop’s Timeshare Emporium & Furniture Barn an additional 8,500 TS contracts.
Translated, that increases the total quantity of contracts to 23,500 (up from 15,000) adding an additional $157,250,000 (Million) on top of the initial $277,500,000 (Million) for a grand total last year in net sales from the exact same number of sales guests to about $434,750,000 (Million).
Scoop’s team’s VPG could have been an impressive $4,347 instead of $2,775 – and Scoop’s net YTD closing ratio, instead of 15%, would only have had to increase a mere 8.5% – to come in with a conservative, achievable and realistic net CR of just 23.5%.
Which, I might add, any company including those within the Land of Time that conducts F2F (face to face) sales presentations, be it B2C (business to consumer) or B2B (business to business) and is not producing a solid net YTD closing ratio in the 25% range is, IMPO, an underperforming ‘entity’ resulting in a loss that is ludicrous and a crystal clear indication that there is something terribly wrong with those running the asylum.
Oh well, in this case, Scoop is living large with the status quo and obviously doesn’t need, want or care to make an extra $157,250,000 (million) because, after all, Scoops’ modus operandi has always been and will forever remain – NEXT!
Good Luck Out There
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