-by Scoop (July 28, 2017)
s is widely accepted the preferred method to evaluate the overall effectiveness of a timeshare sales team or an individual rep is by calculating their VPG ratio (Volume Per Guest; aka the Efficiency Factor and/or Value Per Guest). Most people reading this column know that to arrive at a given VPG we divide the total sales volume by the number of qualified sales guest during the period being analyzed and VOILA – we have the sacred, sometimes feared and without question – the unquestionable VPG.
So Here’s The Scoop: VPG’s are often revered on a daily sales report and treated as an all-knowing ‘sum’ that takes on a life of its own as a few in management become nearly mesmerized while gawking at the VPG – apparently attempting to decode or contemplate its greater meaning in relationship to all humanity 😉 .
However a few management folks I’ve known sometimes ignore other issues that affect the actual VPG such as when a sales tour attending a timeshare sales presentation is a married couple where one spouse recently lost their job (income).
In this example if the employed partner still meets the developer’s required “gross annual household income” guidelines to attend the sales presentation then for VPG purposes the couple is included and calculated as a fully qualified sales-guest.
Obviously, in that situation, when the home loses a sizeable portion of their yearly income a couple might, at least for a while, put off buying some extras and they could even experience a bit of trepidation while sitting through a TS presentation when it is highly recommended that they add a hefty vacation debt to their current family budget.
There are just too many real world examples involving situations that prevent a ‘sale’ from occurring in the first place, yet those cold hard facts of life are rarely, if ever, considered when analyzing a sales team or an individual VPG.
Putting that issue aside for a moment allow me to next point out some developers (and managements) perspectives regarding VPG’s: In a nutshell, if the ‘number’ is above the required (developer) level then all is well in the Land of Time and the inhabitants of the village will sleep well, so to speak.
However when VPG’s dip, fall to or slip slightly below tolerable levels slumber time may be a bit uneasy for some villagers as all the inhabitants are swiftly corralled at dusk as they fearfully huddle around the campfire to see whose heads shall roll.
Once assembled, most – trembling and weeping – hope they’ll escape the carnage and secretly pray they elude the next wave as the meaningless, relentless and never-ending slaughter continues before the throne of the almighty and supreme VPG.
That issue aside, for illustration purposes let us say that ‘today’ a sales room had 45 qualified sales guests who attended a TS presentation. Then, after the last wave concluded the sales manager tallied up the sales volume for the day and the ‘team’ sold $78,500, representing, in this example, a daily VPG of about $1,744.00.
Now, using that example, let’s peak a little beyond that VPG as I believe the real “bottom line” doesn’t clearly illustrate the totality of the VPG as the formula fails to include all the other money, thanks to the team (and/or individual reps), that will be remitted by those who became new owners/members ‘today’.
For example, when applicable, what about the additional funds generated by the (e.g.) 14% interest charged on the TS contracts that were financed or, for that matter, the annual maintenance fees (AMF) that will be paid during just the first few years – often, beginning the same year the TS contract is sold/signed?
Should not the contractual obligations taken on by the new owner/member ‘today’ to pay those monies also be included when calculating the VPG? You know, add up the face volume (or value) of the TS contract plus the projected interest collected and the AMF on said contracts (that will be paid at least for the same time period the interest is paid)?
Well, since ya asked Pilgrim, ya damn right they should be included! And when those dollars are ciphered in using my $1,744.00 VPG example that dollar amount now approaches and/or exceeds a $2,800.00 VPG – a yuuge difference, “that I can tell you”.
Say there, speaking of volume/value should we not also include or project some of the money each new owner/member will spend at their home resort or at the resorts they’ll exchange into on (e.g.) dining, beverages, activities, services and shopping, etc.?
And what about the annual dues paid to be a member of an exchange company plus the yearly exchange fees for ‘time’ including all the other travel products and services the exchange companies will do their best to sell those owners/members?
Don’t those additional expenditures also represent a dollar volume/value – “per guest”?
Look, I understand the ‘how & ‘why’ the current VPG formula is used but to ignore all the other money that originates from those magical little round tables by the sales team and/or the individual is, IMO, without rhyme or reason.
Especially if we continue the practice whereby the VPG is often the great ‘decider’. If we’re going to give a formula and a ‘sum’ that sort of power – shouldn’t the VPG be more representative of the “per guest” (dollar) volume/value?
Good Luck Out There
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