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The Riddle of the Week
--by Marc Saxe
I'd like to start by thanking Rod Hackman, the man behind (and in front of) The Beat,
for asking me to pen a weekly article looking at the business from the "Sales and Marketing" point of
view. So… "Thanks Rod" and all you readers and clickers out there.
It's 3 am on the west coast, the deadline's coming up. I'm sitting here writing, trying to figure out something
to say. If it's right on, it will help you lower your marketing costs, increase your sales velocity, make more
money, cure cancer, save the world and have fun doing it. The reason I'm up at 3 am, or now 3:30 am, isn't the
deadline. My lovely wife Cathy, who has been along for 16 years of this 20 plus year ride is a bit restless this
evening… so I'm up. Thinking about the deadline.
Rod must have had some confidence in me to deliver you something you can use. So much confidence, that he's asked
me to do this once every week or so. Little does he know. He thinks I'm some expert. I think I'm a journeyman…
a good journeyman at that. It's been a long journey. One that started over twenty years ago in Estes Park, Colorado
and has traversed a lot of aspects of this timeshare life, mostly here in the southwest.
I am hoping that I'll be able to shed some light on at least something each week. Not too much. Everyone who knows
me knows that it could get a bit wordy if I don't watch out. So I'll try to put in just a little gonzo, and keep
it fresh for you, and not get into too much "local color", or too deep in the program. Being raised in
Texas, it's hard not to do "local color". But, I do hope to come up with a story to illustrate my point.
And as my conversation, the point is usually the last line, or close to it. I beg your indulgence, dear reader
and clicker, to read a bit further. Click a little less often.
For those of you newer to this timeshare thing, the idea is to sell as much of this stuff as fast as you can at
a cost of sale that makes you money, and keeps you in business without running afoul of the laws of your state
and the nation. It also helps if you deliver a fine product, develop a loyal owner base and a strong team in sales,
marketing and administration. When I first started, the developers and marketing companies cared a lot more about
the sales and the money and a lot less about the "running afoul", fine product, loyal owners and strong
team parts. That's why we've been working our way out of the fix we created for more than the past decade. At least
it's one of the reasons. Collectively, we've moved the bar a notch or two… sometimes more… sometimes less.
When I first started, one of my illustrious "sales trainers?" --at some time after I'd been riding along
with a "professional" who had been doing this for at least a month-- told me that the object of the business
was to look across the table, and imagine your "you know what that I can't say the word anymore because we
really have grown up a lot" - guest, with a $1000 bill on their foreheads. Your job, should you elect to take
it, is to reach across the table, and peel the $1000 bill off of their foreheads, and put it in your pocket. It
was an awfully crass, but fairly effective image. Nice, neat and simple. KISS. Developer gets his, and I get to
keep the $1000 bill. We all get to be crass for the 80s.
It's over.
Now we're a bunch of psychologists and brain surgeons. There must be some equation going on in the heads of the
great trainers of today (like Shari's) showing us how to peel back the onion during the discovery process to arrive
at the second, third, fourth, fifth and G-d knows how many other levels of true buyer needs to uncover the real
underlying "buying motivation". Then just press the hot button, and voila'. KISS. Developer gets his,
and Shari gets to keep the $1000 bill. A lot less crass for the 90s, and more effective. After a while, you end
up with a lot of peeled onions.
After however many thousands of these peelings, I personally realized that I am a bit to analytical for many more,
and began to focus on getting "the you know what, that I can't say the word anymore because we really have
grown up a lot, with a $1000 bill on their foreheads - guests", to come and take a look and sit across from
someone else so they can peal the $1000 bill off their foreheads, or uncover their true buying motivation and press
the hot button. Or maybe buy sight unseen, over the telephone (that's the seed - we'll pick it up again in a few
weeks).
Getting them to come and take a look has gotten a lot harder than it was 20 years ago just rounding them up off
the streets in some ski town, or dropping them letters where one out of two hundred and ten bazillion win the 100
pound bar of gold. The rest, of course, get their choice of a grandfather clock, am/fm multiplex stereo with headphones,
an all terrain vehicle, or inflatable boat with motor. And if you come at 1pm you get the gold plated pen and pencil
set to boot. If you come early, maybe you'll get breakfast or lunch before the tour. They'd respond for that. Heck,
they didn't know about timesharing, or what they were going to experience at the "party". But, like other
marketing of the 70's and early 80's, you could pull around 2% to the door. It makes you wonder why they show up
today at all. The breakfast or lunch still works.
Minivacs, G-d love them, are great tours out here in the southern California desert. But try to make them feel
good about the experience. We want them to feel good. It's the 21st century, and with most of the companies publicly
funded, everything is out there to be seen and heard on this world wide web. So we give them more than an am/fm
multiplex stereo with headphones. We give "you know who", our guests, an experience that we hope they
will enjoy more than the last experience they went on… a real minivacation with golf, dining, skiing, shopping,
events, discounts. Amazing. Notice the part about the "last experience they went on". Do you think they
like these experiences?
By the way, have you ever stopped and looked at the marketing model of this enterprise for very long? …I mean "looked
at it"? Let's say for example that I'm running this phone room. Oops, I mean Call Center. We're not Marriott,
Disney, Hilton, Hyatt, Four Seasons, Ritz, or anyone else with a REAL brand name (my apologies to all of the professionals
who work for exclusively timeshare "brands"). I don't have "honored guests". We're lucky to
have a hotel somewhere near the showroom to put them up, and a few good locations to do OPC. We need phones and
mail to fill the pipeline of tours for the hungry sales team. Oh, you could throw in a little local/regional advertising
and some WWW dot stuff if the budget can handle it.
Here's the numbers.
My question for you is "What's wrong with this picture?"
If you say "Nothing…everything looks okay- I'll take more" go back three for a moment. Let's look at
the other side of the picture for a while. Half a percent through the door means 199 out of 200 you marketed didn't
go through the door. Ten percent buy and stick, means 1999 of 2000 that you "marketed" to, didn't either
buy or come through the door. Yes, it worked financially to do it that way. Barely, at a 45% sales and marketing
cost of sale on a reasonably high-ticket item. Anything changes in the marketplace or your organization, and what
are the chances it still works? Slim and zip. You're B.O.I. Enough changes and that well-oiled machine of yours
becomes parts for someone else's well oiled machine.
What do you think went through the minds of the 1990 that didn't respond or show up? How much do you think their
not showing up contributed to your 45% cost of sale? We can talk about the 9 out of 10 that didn't buy and what
to do about them later. Not a whole lot of businesses can make it when 1999 out of every 2000 they "market
to" don't look or buy, and 1990 don't even respond. What do you think the 1990 were thinking? I've got a sneaking
suspicion that I know the answer. But, If you've made it this far this week with me, I'm going to leave it up to
you for next week to come up with some of the answers.
To drop a bit of another seed, there are a few models of the business that aren't running at 45% and higher cost
of sale. We know that fractionals should, just by their nature, be half that or less. But there are segments of
this business that allow for low, or exceptionally low, costs by industry standards. Are they in Orlando or Las
Vegas? Good question. It depends. At the very least, we'll look at some things that can lower your overall costs
and help "fix it in the mix".
Next week we'll look at how effective our marketing efforts have been, and what these efforts mean a month or two,
or a year or two, down the road - and probably a bit more. If you have any ideas, input, or a good story about
"the real business", now is the time. Drop me a note, a question or a comment to: or msaxe@resortopportunities.com.
We'll pick it up there next week. By the way… it's 9:30 am, and I made the first deadline.
Happy trails, and see you same time same place… next week.
Copyright 2001, Marc Saxe, Resort Opportunities, all rights reserved.
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