September 30, 2016 — The following is not a slam against timeshare developers; in many nations it is basically just the way it is for many working stiffs. With the exclusion of (e.g.) government jobs supported by a union or private sector employees working for a company whose ‘top-brass’ actually care about their peeps’ futures, scores of millions of other hard working folks fall into an unusual category. And that is their incomes don’t keep pace with inflation. They are losing money each year and that is especially true for those paid on a performance based formula such as commission-only.
So Here’s The Scoop: Woman or Man, old or young matters not! What should be of grave concern to every person working at most levels in sales/marketing (SM) and SM management in many industries, including ours, is that they will find it a real challenge, in terms of their income’s purchasing power, just to break even each year and getting ahead financially over the course of a career might be impossible.
I’ve brought this topic to the forefront previously but it is worth repeating. For example, if a rep was being paid 6-7-8-9-10% (+ -) three years ago and they are still earning the same ‘cut’, then yep, they’ve already lost a bunch of money and it’s only going to get worse.
When I was a young sales rep, prior to my joining the ranks of this industry, I was told a short story by my sales manager (Jim D.) that made quite an impression. Indeed, this was at a point in my life when just about everything was going to change and taking those baby steps, slowly, everything did change, in part because of the anecdote Jim told me one afternoon in his office.
In his usual light-hearted manner Jim told me that the future was not that mysterious, was often predictable and then he shared “The 100 Man Story” with me that went something like this:
“Many years ago the Social Security Administration did a study and contacted 100 young, healthy 26-year-old working men and asked them about their life’s ambitions, dreams, objectives and to forecast their futures.
“All the men had a very positive outlook but to the agency’s surprise when the SSA checked back on these men 39 years later — when they had reached the age of 64 — they found that 36 had died, 54 were broke, 5 were still working, only 4 were financially secure and just 1 was wealthy.”
What I heard that day also reminded me of what “The Doors” lead singer Jim Morrison taught us with the band’s 1970 hit song “Roadhouse Blues”: “…the future’s uncertain and the end is always near – Let it roll baby…”
And in an odd sort of a way that brings me around to, as an example, earning $100,000 (USD) in 2016 in the Land of Time and how much less that $100-K will buy each year over the next 60 months that will zoom by one day at a time.
If a rep earns, in this example, $100-K this year (2016), next year, believe it or not that rep will run short about $4,250 in purchasing power if they earn $100-K in 2017. The following year, they’re out another $4,069. The year after they’re out $3,896, then the next year they’ve lost another $3,730 and during the last 12 months they’ll lose about $3,572 more in purchasing power if they are still earning $100-K annually.
To break that down to the understandable there are about 1,825 days in a five-year period and if they lose $20,000 over the course of those 60 months that is akin to the rep taking a ten dollar bill plus some pocket change every single day and tossing the money into a trash can.
And it adds up quickly, about $77 each week, about $335 each month and about $4,000 each year going down the drain, so to speak. Then, in the year 2021, it will take about $123-K in earnings to buy the ‘stuff’ that the rep could purchase this year for $100-K.
For the record: Despite what the media reports or the assertions of Janet Yellen (the head of the Federal Reserve in the U.S.) that inflation has been and will continue to remain in the 2% arena, if you study the records of the past 75 years you will discover, as I did, the data works out pretty much to the average annual inflation rate that I’ve used in this example of 4.25%.
But even if I’m wrong and Ms. Yellen (et al) is correct that still means over the next 60 months the rep earning $100-K in 2016 is going to lose about $2,000 each year in purchasing power because at the end of the day, most developers don’t offer an annual ‘raise’ and there are only so many sales guests to ‘Meet & Greet’ each working day.
As I mentioned, this income thing is the way of the world and I don’t know if “The 100 Man Story” was really based on an actual study. On the other hand, excluding those who’ve passed on, all anyone has to do in their community is open their eyes, look around, and they won’t have any problem finding seniors with their careers behind them working as (e.g.) a maid in a small motel or at the counter of a fast food restaurant, the corner convenience store and/or other ‘gigs’ just to make ends meet.
And you can bet the farm that like “The 100 Man Story” those people, when they, too, were young and full of dreams, good health and ambitions probably didn’t think that instead of living the ‘good-life’ in their 50’s 60’s or 70’s (+ -) they’d be a (e.g.) Greeter at the neighborhood Walmart, etc., and maybe with the use of a ‘walker’ or ‘scooter’.
In fact, I’m pretty darn sure, if asked, they would have some sound advice to share and they’d likely pass on some thoughts that we’ve all heard before – and yet many of us continue to ignore – one being that painful adage: “If I only knew then what I know now” and then maybe a word or two about that hindsight thingy having perfect vision.
Lastly, to the best of my knowledge the net selling prices of them thar timeshares over the last few decades have also not kept pace with inflation. So for those Doubting Thomas reps who believe that will change and by increasing the selling prices annually that is akin to getting an annual raise, well, they, too, are in for a rude awakening.
And for most companies including timeshare developers around the world basically paying a commission-only ‘wage’, I’ve said it before and I’ll say it again. That scheme is based on an antiquated and corrupt system offering no future for most of their reps; the very people who continue to often make ‘upstairs’ massive fortunes and financially secure futures.
On the other side of that coin, if all those entities would just adopt the example of many Fortune 500 companies, etc. and paid their marketing/sales reps and managers as those companies do, their peeps would also enjoy a financially secure future and, by the way, those companies would actually lower their ‘sales/marketing’ costs, too. Imagine that?
Oh well “…Let it roll baby…”
Good Luck Out There
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