Analysis: Timeshares and Sound Direct Marketing Principles

A friend recently asked me if an "affordable vacation getaway" that included a 90-minute timeshare presentation was a scam. Some timeshare marketers have used deceptive practices, such as incorporating misleading contests, relentless sales presentations, and unclear contracts. However, for the most part, discounted vacation packages for timeshare properties are legitimate offers.

I started thinking about timeshare marketers and realized that not only do they use many good direct marketing principles, they are also very adaptable to changes in their environment. In the early days, developers would invite tourists at their vacation properties to spend two hours looking at a "real estate investment" or "vacation idea." It all seemed great until it came down to closing the sale and developers resorted to high pressure tactics. As a result, they earned a reputation of being ruthless and the last thing travelers wanted to do was attend a timeshare presentation. However, during this time, people were also buying timeshares and loving them.

Timeshares began using telemarketing efforts to bring in potential buyers. These programs are what most of us are familiar with today. Enjoy a 3-day stay in Las Vegas with dinner and a show for two for just $49. This approach worked great until the creation of the Federal Do Not Call Registry drastically cut down the list of consumers available to call.

Once again, the timeshare companies adapted by developing "response leads." A response lead is a person who, by a variety of different means and channels, requested information about the product or service offered. By using direct mail lead generation with a "request information" offer, timeshare marketers are able to contact these leads.

Now, timeshare developers are also incorporating the Internet into their marketing mix. Email is used to promote quality vacations at a discounted price and urges prospects to visit the timeshare's website. The website shows the beauty, luxury, and attractiveness of vacation opportunities and helps create interest in the actual vacation property. Leads can also be gathered from web visitors.

Timeshare companies have sharpened their skills to a level envied by other direct marketers. And they know how to adjust to whatever the marketplace throws out there. Here are some tried and true techniques we can learn from timeshare developers:

Reach out to the right list
Timeshare marketers know how to work a list. They are reaching out to known travelers. They contact people within regions that are near prime timeshare properties. They are developing good leads through direct marketing efforts that encourage prospects to request more information. Make sure your list is working hard for you.

Adapt to marketplace changes
With the unpredictability of today's economy and consumer buying activity, it may be time to think about trying different approaches to connect with your customers and prospects. As marketing obstacles have sprung up, timeshare marketing programs have adapted to continue reaching the right people with the right offer.

Make a great offer
Timeshare marketers make an offer that is sometimes hard to believe and often even harder to resist. I was recently offered a trip for a family of four, for 3 days and 2 nights, in a lovely, relaxing vacation spot relatively near my home for $99. That's a great offer! Yes, I knew I would be hit up to buy a timeshare and would be required to attend a presentation. But, if I were really interested in going to this resort, it would be a great deal. Offer something your target audience will think is too good to pass up!

Think return on investment
My friend asked how the timeshare offer could be legit. How could they offer such an affordable vacation package and make money? Timeshare marketers are using response rates and return on investment (ROI) to create a successful program. Let's say they contacted 10,000 prospects including my friend. If they had 200 people take them up on the offer, that's a 2% response rate. Since the timeshare owns the property, and it has vacant rooms, the cost to house prospects is minimal. Plus, they are bringing in $99 per prospect, which more than pays for the marketing costs. Let's say that 5 of the 200 prospects who attend the presentation sign up for a timeshare - this could easily mean the program is profitable.

I often come across marketers who are afraid to spend a higher amount to bring in a prospect. For harder to reach prospects with the opportunity for a large sale, it can be worth spending more on the direct marketing effort. For instance, you can send a $10 high impact dimensional package if it will help you close a $100,000 deal. See my blog "When Should You Go Dimensional?" to determine if a dimensional mailing could help you close the sale.

Take advantage of the Internet
Timeshare developers have realized that the Internet can add another dimension to their marketing programs. A website can give a visual tour of timeshare properties. Email can drive to the website and encourage requests for more information and create qualified leads. Timeshare marketers are creating integrated direct marketing programs with direct mail, telemarketing, email, and Web. For more details about integrated marketing programs, check out my blog, "Creating an Integrated Marketing Message."

I think the most important thing we can learn from timeshare marketers is adaptability. When outside forces interfere with marketing effectiveness, think outside of the box and find a new way to reach your prospects. And make an amazing offer!

Understanding the Need for Speed

Our everyday lives revolve around the need for speed. We want everything done faster. Photo developing and dry cleaning in an hour. Microwave meals. FedEx®. We even use abbreviated names to save time. We fidget waiting the 10 seconds for our word processing application to open — wishing we had a faster computer.

In the business world, the need for speed also prevails. The concept has been around for decades: getting to market first. Manufacturers rush to develop, create, and distribute products before the competition. However, “speed to market” has taken on a whole new meaning with the rise of the Internet.

There’s no doubt that the Internet has changed the definition of fast. Both traditional brick-and-mortar companies and pure-plays have discovered that the definition of fast is now shaped by the Internet. Companies are created and disbanded in record time on the Internet. In some cases, being first with a great idea has paid off. Ebay’s ability to build a customer base of buyers and sellers has given it a competitive edge that late arriving competitors have not been able to duplicate.

Some Internet pure-plays have even been able to give longstanding companies a run for their money. Amazon.com has held its own and is expanding. America Online has been around since the mid-1980s.

To keep up with today’s need for speed, many companies — and even industries — are changing the way they do business. For instance, the insurance industry is responding to market conditions. To meet consumer demand, state insurance regulators are searching for ways to reduce the time it takes to approve new insurance products. Banks and security firms are making it to market first because of the lengthy approval process currently in place for insurance companies.

So, what are the benefits of being fast? Let’s start with what is to be gained by getting a product to market quickly.

Beat the competition.
When you’re first in the marketplace, you gain a competitive advantage
by building stronger brand recognition. For instance, SwifferTM was the first to introduce dry, disposable cleaning cloths and was able to build its brand before the competition came onto the market.

But, second may be better.
Sometimes you can be a close second and do better than whoever was first. You can learn from the competition — what’s working and what’s not — and make minor modifications that will make your product even better.

Customers are waiting - impatiently.
Another reason for speed is that your customers may be waiting for a product or service. And, you need to get it to them first. Once again, if you don’t put it in customers’ hands, the competition will.

Increase your cash flow.
You may also want to get a product or service to market quickly in order to optimize your capital investment and increase cash flow. You need to see a return on your investment before funds are depleted. Many Internet pure plays are learning this valuable lesson. Many Internet start-ups are closing their virtual doors because they didn’t successfully get their product to market before their cash flow ran out.

One last tip. The key to successfully focusing on speed to market is meeting a new demand. Make sure your product or service is something that people want. It won't really matter who is first to market — if nobody wants the product or service.