February 7, 2014 — I expect to receive some e-mails this week perhaps from one or two disgruntled sales reps, managers and maybe developers, too, regarding the notion of eliminating commissions (pay) as they are currently structured in our industry. However if you all follow along with my insane thinking for a moment I’ll clearly demonstrate why doing so would be a WINNER – and improve everyone’s bottom line!
So Here’s The Scoop. Although it is true there are some developers who pay their sales reps a base salary (and/or a draw) plus commission, in most cases the performance-based salary (draw) is minuscule and does not come even close to being near a livable income.
And from a recruiting perspective, when trying to attract successful sales reps from other TS companies in The Land of Time (and equally important from other industries) those TS pay schemes pale in comparison to what sales driven Fortune 500 and many other major corporations offer the professional sales talent they are recruiting.
Adjusting the pay scale in our industry is not a bad idea. Indeed, major companies around the world use the same basic formula in order to be competitive and attract sales professionals to consider their company, and there is no shortage of sales professionals ‘out there’ with verifiable and impeccable bona-fides from which to recruit.
Timeshare developers should follow those companies’ successes and employ the same tactic, with the primary benefit to the developer being that by recruiting those sales professionals the pros – once thoroughly and properly trained – bring to the ‘table’ a built-in minimum net 30% closing ratio – PERIOD.
Of course the caveat would be – dare I say it again – a marketing program that actually matched the ‘age’, ‘need’, ‘use’ and ‘affordability’ TS vacationing lifestyle factors to the ‘sales guests’ so that these reps (any rep) aren’t humping their tails off trying to sell (e.g.) a MSR priced $61,805, 2014 460 horsepowered Z51 3LT Corvette to a minimum wage graveyard shift burger flipper at the local fast food chain.
And by the way that “30%” is sales reality 101-A because in the real world of sales successful, proven professional reps already have the attitude, aptitude and talent, etc. and need only be shown the product/service, process, etc. and they’ll take it from there.
They indeed do so all the time in all industries because, unlike what some in our ‘biz’ believe, PROFESSIONAL sales is not smoke and mirrors, not razzle and dazzle but instead requires time-tested, proven and highly successful sales principles, methods and techniques that — like a Swiss watch — works just fine when selling any product or service to a qualified prospective buyer.
As an illustration to my ‘madness’ — and because long time readers know I’m all for a coup d’état to overthrow most standard T/O selling systems in our industry — consider the following approach to attract and recruit the top professional sales talent and only hire proven front to back sales pros.
In all recruiting ads, along with a ‘bio’ about the company (developer), the opportunity, etc., include (e.g.) “Top Sales Professionals from all industries with verifiable references will be considered for this truly unique performance based and very limited career opportunity. Base salary is $75,000 plus full benefits including annual bonus…”
By the way the above example, though the salaries offered will vary, is exactly what many sales-driven Fortune 500 companies (and others) advertise –– a livable base salary, bonus, etc. and these corporations do get the pick of the litter, so to speak!
TS developers can surely do the same thing when you consider that once said well-trained PROS ‘Meet & Greet’ 6 new sales guest each week – work say 48 weeks per year – and at a 30% net closing ratio they will sell (no if’s, buts’ or ands about it) NLT 86 ‘deals’ their first year. And at a conservative per-contract price of just $15-K, that is about $1.3 Million in net volume (per rep).
Now remember, we’re talking about sales professionals here – not the likes of Greasy Bob – Slick Sherry – Spin To Win Sam – Nose Bleed Drop Art – Churn ‘em and Burn ‘em Kay – No Heat No Eat Ed – They’re All Mooches Ron – Voluptuous Young Heather – Bawdy Bill & Blowhard Brett, etc.
And get this, developers: By recruiting and fully training sales professionals and paying a $75-K annual salary (not a draw) your sales reps annual ‘commission’ cost (in comparison to ‘now’) would plummet to roughly 5.77% (per rep) — and that leaves a lot of ‘huskies’ at the end of the year for an attractive performance bonus (per rep).
There are many more reasons for such a pay system in our industry, and the same formula can be used for those T/O sales centers with ‘liners’ and ‘closers’.
But the next best reason for doing this along, with lowering the developers sales costs, is personnel turnover will be lowered dramatically (more savings to the developer) because the ‘reps’ will have a sense of security, continuity with each pay-day throughout the year – and that ‘golden-ring’ to shoot for every 12 months.
Good luck out there!
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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’.
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