September 5, 2014 — This past week ITG published a press release for “Market Research Report.biz” wherein they made several assertions including: “The key factors driving growth of the global vacation ownership industry include rising number of HNWI and employed population, growing demand for leisure and recreation, increasing internet penetration, ameliorating global economic condition and zealous international tourism in the US.”
So Here’s The Scoop: Should you not know, HNWI means “High Net Worth Individual” and the definition of being such a person is rather ambiguous because it seems, for example, that the financial services industry has different net worth (liquid assets) factors and/or values that they use to determine who qualifies for the tag of being a “HNWI”.
The website Investopedia.com tells us: “The most commonly quoted figure for membership in the high net worth ‘club’ is $1 million in liquid financial assets. An investor with less than $1 million but more than $100,000 is considered to be ‘affluent’, or perhaps even ‘sub-HNWI’. The upper end of HNWI is around $5 million, at which point the client is then referred to as ‘very HNWI’. More than $50 million in wealth classifies a person as ‘ultra HNWI’.”
Investopedia.com continues: “These individuals generally demand (and can justify) personalized services in investment management, estate planning, tax planning, and so on.”
With that in mind also remember that every study within our industry spanning several decades, including reports from ARDA, Ragatz & the major exchange companies, also clearly report that buyers of slices of Paradise fall into the Investopedia.com definition of being “affluent” or a “sup-HNWI” – meaning the average timeshare buyer/owner/member has at least $100,000 in liquidity.
But, sadly, as an industry we don’t market to those prospects/potential buyers and when they do show up in our sales centers it’s purely a matter of luck because most developers’ marketing entities mass market as opposed to target marketing.
We all know the routine. Sort of like on the Statue of Liberty approach: “Give me your tired, your poor, your huddled masses yearning to be…” but in the ‘biz’ it’s: “Send ‘em all in from ages 25 to 75 yearning for free gifts regardless of their health, wealth or if they are single, living together, married or if they like and can afford to travel…”
Another interesting aspect about the vast majority of all “HNWI” as well as the lion’s share of timeshare owners is that you’ll rarely find anyone in either category who is less than 40 years old.
And I would argue that most people in any “HNWI” category who are over the age of 60 have had at least 20 years of high-end and extensive travel experiences under their belts and as they head into the final phase of their lives travel may no longer be important to them. Kind of the old “been there, done that” and/or not a good ‘shot’, so to speak.
What I know absolutely to be spot-on is that professional timeshare sales reps and closers would nearly sell their souls to any developer – and stay with them for the duration – if said developer target marketed to the very prospects who are in the appropriate age and “HNWI” categories and who would be inclined to purchase the very product and service developers are otherwise squandering millions of marketing dollars trying to sell anyway.
Surely there must be one developer out there somewhere in the Land of Time who can see the value of target marketing and after crunching the numbers understand the impact and benefits to them by using what I’ll call ‘Trickle Up Economics’ – you know, the more the developers’ reps sell, the more moola the developer will earn (net).
Oh what the hell, it’s only money anyway and who in their right mind wants to lower their marketing and sales costs, lower their rescission factors, retain quality reps all the while significantly increasing their net sales volumes, closing ratios, VPG’s and profits? Silly me!
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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