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It's All in the Mix
By Michael S. Finn, RRP
No, I am not referring to baking a cake or even the perfect martini. What I am referring
to is marketing mix. Sometimes we concentrate so hard on bringing in as many tours as possible we forget about
mix and how important measurability is. I do not just mean VPG (volume per guest). If you want to stay ahead of
the curve and be profitable you must know all the numbers. When you do have all the numbers, you
then must know what to do with them.
First let's look at the basics. What programs do you have and what is working the best? Most timeshare (yes Virginia,
I called it timeshare) resorts have three programs at the top of their lists.
- Owner Referrals
- In-house Guests
- Mini-Vacs (if you have loyalty members, they are the cream of this crop)
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Now it only makes sense that a resort would only want the most productive programs available. Here is where it
starts to get tricky. The outside observer might have looked at this list and said, "timeshare is not so tough",
just sell out the property with Owner Referrals. Well, after the obvious fact that you need an owner base to sell
Owner Referrals, we find other holes. I actually ran a simulated program once that showed in a perfect world
it would be feasible to sell out a resort with 75% or more of your mix being from Owner Referrals. Now we get
to the holes: it traditionally takes 4-5 years to sell a resort completely. To build a pipeline of owner referrals
accounting for 75% would take as long at 15 years or more. This would increase your fixed costs for 15 years as
opposed to 4 years and I am sure it will not make the bankers too happy to wait that long for their money. To aspire
to have a high percentage of Owner Referrals is admirable, to accomplish over 30% of your mix being Owner Referrals
is commendable.
So we search on to find the next great marketing program. In most resorts this would be In-house Guests. Once again
a great program, but how do the numbers pan out? In my opinion VPG is overrated regarding this program. I have
seen very good In-house executives who can manipulate this number easily. I worked with a guy who was so good at
prequalifying in-house guests that he virtually only registered the guests who were going to buy. Some of you may
ask what is so bad about that? Lost volume for the company is bad about that. This in-house exec may be closing
over 50% of his registered guests. In his prequalifying zeal he may have disregarded or disenchanted many guests
who may have closed at a paltry 25%, thus denying the house of needed volume. My suggestion is to divide the volume
better for measuring purposes. In other words, use a Volume per Unit (VPU) or a Volume per Occupied Unit, depending
how you assign in-house execs. This will tell you what you are honestly yielding from your in-house department.
Not all In-house Guests will buy, but a good percentage will regardless, so get as many on a proper presentation
as possible. Your VPG may suffer a bit, but you will get more volume at a great conversion.
Well now we have a marketing plan that might sell out a 100-unit project in 10 years as opposed to 4 years. Still
not good enough for fixed costs or those pesky bankers. The commonality of the previous two programs is that they
have a limited finite universe that normally correlates with the owner base and size of the project. Although all
databases have a finite number, with Mini-Vacs to the public it is a large finite number. There are nearly 250
million people in this country. If we carve out just 2% of them (the actual number would be higher) that might
be eligible to take a tour, this gives us 50 million people to draw from. As you can see, Mini-Vacs yield a much
larger number than those of referrals and in-house guests. Mini-Vacs are normally the highest yielding program
of those that are solicited to the masses. Now we can hedge our bets even more with proper demographic and psycho-graphic
selects or use previous guests or loyalty members as a model database. Here is another hint, learn something from
the success of Owner Referrals and In-house guests and use it with Mini-Vacs. Treat all your guests like they are
specially invited by a friend. The hospitality and credibility will pay great dividends.
What we have outlined is a plan that many resorts follow now. If you can get the volume from these three programs,
you should be doing well. But what if you are not? First try to spruce up these programs. Think about automating
your Referral program or being more aggressive In-house or look for more cost effective ways to get Mini-Vacs.
Look at the other programs that have been the bread and butter for many resorts. We grew up on Day-Drives in the
northeast. If done properly they are cost effective, offer almost immediate gratification and build volume. Although
many people do not like to talk about the dreaded OPC (off property contacts) they are effective parts of many
resorts' overall program. Ask timeshare people in Key West about the success stories they have had with OPCs.
As you can see, the program's ingredients are there. Use the numbers to get your mix right. If I have not thrown
out enough numbers and scenarios already, just realize that if you do not maintain your mix properly you may turn
away a high yielding guest for a lower yielding guest. Unless you know the numbers and how to monitor them on a
daily basis, your mix will catch up with you. Not too daunting a task. Good luck.
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Michael S. Finn, RRP,
writes an insightful bi-weekly column regarding issues of ethical and profitable sales & marketing. Read his bio here
Email: Michaelsfinn@aol.com Published
on Mondays.
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