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| Database Marketing: The Perfect Model By Michael S. Finn, RRP Yes, timeshare is the perfect model for database marketing. Many industries, such as retail, must rely on mass advertising and hope for the best. When Pepsi does a multi-million dollar commercial or six (6) of them, they have no idea how much business they will receive from it. Do not get me wrong, these marketing professionals know their business. I am sure they figure if they spend $1,000,000 this month they will either meet or exceed their budget. I know these marketers lower expenditures or even eliminate them for a period of time to see if it affects sales. Our business is different. If we were to spend $1,000,000 in a month on marketing, we had better get at least $4-5,000,000 or a marketing head will roll. I am still not sure if this is a blessing or a curse. For better or for worse our industry is about as quantitative in regards to marketing as can be found. In other words we know how much our premiums, our tours, our advertising and our database costs before we roll the dice. I spoke to a developer this week that told me that he would give me $2,000,000 right now if I would guarantee him $10,000,000 in net sales. Most every facet of the timeshare industry can be measured. For this reason it is a perfect model for database marketing. Some parts of the database are rather simple. For instance a sales and marketing organization that wants to produce $10,000,000 dollars in sales this year, knows that with their $1000 Volume per Guest (VPG) they need to have 10,000 preview guests or an average of 200 guests per week. This being said they determine what their marketing options are and proportion them and adjust for seasonality. Some resorts do use some media or a lot of OPC (off property contacts) marketing. The more that this organization depends on this form of marketing, the less of a database model exists. For this reason we will look at a complete database model as an example: Let's say we are two years into a project and we have built a pipeline of mini-vac tours to go along with our day tours and referrals. This project will be completely driven by database. Our first database would be a list purchased with the proper selects or criteria. To sell 150 mini-vac packages per week we will use historical data to work backwards and say that we need to mail or solicit 150,000 names per week. That will give us a 1% response based on inbound, outbound and Internet support. At this point we have two choices: keep buying names or, for the savvier marketer, refine and solidify this database. In other words keep track of all the names that requested more information or hit our website (yes there are ways to collect this data). Now we have started a preferred database that can be used later. With one hundred and fifty packages sold weekly we can create a pipeline that should end spilling out just over 100 tours per week or over 5,000 tours per year. If the resort has a $1400 net VPG then they can look forward to over $7,000,000 this year from this program. This is how a $.12 lead can equate to millions in sales. The key to the perfect database model is measurability. I know marketers who could tell you how many paper clips they used to sell an interval. We start with a cold lead and mail, email, fax or call it. Now it becomes warm when we get some type of response from the potential client. From there we carry forward to a guest or tour. When they buy they become a purchaser or owner. These are all points that can be measured and in some cases re-measured. For these reasons timeshare marketing is as close to a perfect database model that I see out there. And measurability is the key. |
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More Finn | Home Michael S. Finn, RRP,
writes an insightful bi-weekly column regarding issues of ethical and profitable sales & marketing. Read his bio here |
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