While on a recent Mexico vacation, I agreed to sit through a 90 minute presentation about private residences (not to be confused with timeshare condos!). Hours later, I found myself frustrated, exhausted and borderline schizophrenic. I realized I’d barely survived the gauntlet of highly-engineered sales strategies without purchasing, and felt obligated to share my experience. Career salespeople and direct-sales organizations should take notes, as I’ll outline common pitfalls that can lead to permanent brand damage and ultimate demise. Consumers interested in purchasing a timeshare or private residence will benefit from gaining insight into the “tricks of the trade” that are utilized to get you to say “yes.”
I’ve sat through half a dozen vacation timeshare presentations over the years, with rewards ranging from boom boxes to weekend getaway trips. None were more than 30 minutes past the scheduled 90 minute timeframe. In fact, at a timeshare presentation in Hawaii, I was able to leave immediately after breakfast, as both parties agreed it would be a waste of our collective time, and we still left with our $100 gift certificate. My experience in Puerto Vallarta was much different, from start to finish.
Upon arriving in Puerto Vallarta, I took a shuttle to the rental car company where I made small-talk with one of the employees (or at least that was what I thought was the case). He asked if I had plans and if I’d be interested in a dolphin adventure. He could even give me 2 tickets for free if I sat through a sales presentation at a local resort. To sweeten the deal, he promised a fancy buffet lunch and $200 cash upon completing the tour. I agreed, paid a refundable deposit and met up with his colleague outside our rental to be guided to the resort.
The unnamed resort was one of a collection of private residence communities on the property. We signed in and were escorted to a dining-hall like area where we were asked questions by our sales rep, who we’ll call Chuck. He sized me and another couple who came along for the dolphin adventure tickets. He then walked us to a buffet breakfast that did deliver as promised: a wide variety of quality food for existing members. We then toured the rest of the property and then sat down to finish the sales pitch and give him a “no”. Little did we know it would be nearly 5 hours before we were able to leave, and by that time, we all felt like we’d lost an entire vacation day (and possibly a friendship) in the process.
So how did the sales-centric organization get me from a “maybe” to definitive “no” in just an hour or two? The question holds the answer, but more on that in a moment. But first, one more bit of helpful background. In college, my favorite class was Sales 201, where I learned the fundamentals of FAB and Solutions-based selling. I also read one of my favorite books of all-time, Influence: The Psychology of Persuasion by Robert Cialdini. In the book, Cialdini outlines 6 key principles of persuasion. To break down the sales strategies I experienced with the vacation private residence club, I’ve mapped them to Cialdini’s 6 key principles below:
The science of reciprocity is simple: those that receive are obligated to give back. In our case, it was minimally 90 minutes of attention to a sales person or ultimately a $60,000 purchase. The first sales strategy during our timeshare experience was reciprocity: reminding us of the many “gifts” we’d receive after completing the “90 minute” sales process as well as an impressive breakfast. The organization even provided bottled water and a play area for children during the “closing” session, both arguably gifts of convenience, but truly offered to create minimal excuses to leave early. The organization truly mastered the first of the 6 key sales principles. FAIL #1: although relatively minor, the organization did not pay for valet parking as promised, although this may have been an oversight on their part but we were too eager to leave to bother asking for it.
Commitment and Consistency
Also reasonably intuitive by design, Commitment and Consistency relate to the need to gain a level of attention from the prospect by getting skin in the game. In my case, it was a $40 refundable cash deposit. I’m guessing the dropout rate is exceedingly low when prospects are out $40 if they don’t show up. Once on-site, the next Commitment element was a required signature on a one page agreement to attend the full 90 minute presentation. Getting a prospect to commit in writing is always beneficial. FAIL #2: actual private residence presentation time was 5 hours. This was by far the most critical and profound error made by the organization and sales team. Essentially, the breaking of a contract in regards to elapsed time commitment sabotaged the entire opportunity.
The Consistency principle relates to the overall messaging and experience. Any discordance in a sales experience can create doubt, ultimately sabotaging the deal. In our case, the sales people were somewhat inconsistent in their messaging and approach. FAIL #3: sales person went from personable family man to desperate sales person on the verge of losing his job to acceptance he wasn’t going to make the sale and ended the meeting by pouting and refusing to shake hands. This was a great way to close the door completely, which may have been intentional, but as I’ll point out later on, is short-sighted.
One of the most commonly used sales principles, Social Proof, is common in marketing messaging. One of the best examples I can think of (until it became taboo) was McDonald’s signage updating how many billions of customers had been served to date. How can 100 billion people be wrong? In the case of my experience, our sales person, Chuck, was also a member of the private residence club, as was his family. While this can be strong social proof, due to the nature of the sales environment, it can also be seen as cultish, like Amway representatives. FAIL #4: Although minor, I believe the sales experience did not do an effective job of leveraging Social Proof. I had to ask how many active members were in the program (over 125,000 according to Chuck, which is compelling).
As is the case with many aspects of life, authority is highly effective in a sales environment. After all, who buys from someone that knows little about a product they represent or from a company with little history or credentials? On this front, Chuck did know the properties reasonably well (although he wasn’t sure about completion dates for 2 new developments in Argentina & the Dominican Republic, which I thought was odd) and he was a member, which offered validation. The other Authority element favored by this organization was the “check with my manager” strategy common at auto dealerships. In our experience, managers we’re called over to speak with us no fewer than three times. FAIL #5: While not quite Authority, the process of having us meet with 3 additional representatives to collect our gifts was extremely frustrating. Combine the “ladder” approach to exiting people out of the process (to try to catch fence-sitters) only resulted in exacerbating those that were firmly “no’s” and ready to leave. We overheard another couple testily complaining they’d been at the resort for over 6 hours and just wanted to leave.
When was the last time you purchased something significant from someone you didn’t like? A vast majority of the time, consumers prefer to purchase from people and companies they like. Based on my experience, I believe they set up sales representatives strategically based on available information (demographics, personality, etc.). Chuck was a relatively young family man who we could clearly relate to. He made sure to show us pictures of his children on his iPad (the ultimate sales device for timeshare presentations). FAIL #6: Until he knew we weren’t going to purchase, he was also personable, friendly and accommodating. Afterwards, he was moody, dare I say borderline infantile in his poutiness. Instead of appealing to guilt, he alienated himself from us, intentionally or not. Combine with #5 above: the 2 sales support staff we were introduced to were increasingly less likeable as we tried to escape.
Everyone likes getting special, unique or exclusive deals. Limited-time offers and special gifts are the foundation on which the timeshare sales community was built. In our presentation, Scarcity messaging included availability of studio units and other limited time offers available “today only.” One of the most clever (or fatal) Scarcity tactics utilized during our presentation was early on, when Chuck asked if we currently owned a timeshare. When we said no, he wrote in large block letters on his sales sheet: NOT OWNERS. He then explained this might be a problem (implying we may not be able to continue with the presentation and receive our prizes). He called over a manager who decided to approve the presentation, despite the inherent risks of us not being current or previous timeshare owners. FAIL #7: As I’ll address later, the manager’s approval of us as prospects may have been the 2nd largest mistake of the entire experience.
One of the recent insights I’ve gained into consumer purchase behavior relates to loss. Essentially, people have a greater fear of losing than excitement over gaining something new. As outlined in Predictably Irrational by Dan Ariely, people are more motivated to take an action based on potential loss of something existing, than gaining something they do not currently possess. My primary motivation to attend these types of sales presentations is for some sort of desirable gift, followed by personal interest as a marketing professional, regarding current sales strategies employed in the field. My Puerta Vallarta experience demonstrated how effective this strategy can be: I was committed to completing the presentation, for fear of losing the $60 Dolphin Adventure tickets and $200 cash if I didn’t see it through. The reason is because these gifts were positioned as mine to lose vs. gain.
Not being one to complain without providing potential solutions, I’ve thought about how the Puerta Vallarta private residence organization could have gotten a “yes” from me, or others I saw complaining during my visit. Here are just a few ideas:
- Targeting: search engine and social media marketing to attract qualified candidates (vs. direct sales at golf courses, car rentals and at the airport upon arrival)
- Filtering: qualifying more selectively up front, and allowing an out with some or all of the prizes awarded, otherwise, everyone loses
- Setting Expectations & Building Trust: although it’s obvious why the organization didn’t ask us to sit through a 5 hour experience up front: we would say no. Any presentation that goes more than 50% over the scheduled time is much more likely to cause harm to the sales opportunity (and brand via word-of-mouth & social media). Consider staging the sales strategy so both parties have an “out” throughout the process, saving everyone time and money
- Training: perhaps the target buyers of timeshares and private residences are not college educated independent thinkers, but I would suggest Chuck get additional training to gain trust and credibility: nobody likes a pouty whiny sales person
- Pricing Smart: be careful when price-cutting after each “no” as it erodes the brand (and sales) experience. While the initial product offering was over $60,000, the final offer was $3,500. Better off utilizing Marketing Automation to better target and score leads before making low-ball offers.
- Upping the Give: encourage guests to stay after the presentation through end of day. Provides opportunity to experience accommodations, services and staff (with potential for additional monetization and close)
- Gift and Receive: give prospects gifts even if they give a “no” and it’s in everyone’s best interest to cut the presentation short – see Reciprocity
- Closing Losses with Grace: apologies for time lost, hand-shake, open invitation to return and providing contact information. Nothing to lose, everything to gain.
- Marketing Automation: follow-up with offers (of increasing value) including 2-4 night stays in a studio for those that initially said “no” is a great way to smooth ruffled feathers and bring prospects back into the fold. Creates a viral effect as well
- Referral Program: reward anyone (not just current members) with points or $ towards services for getting them into a tour. For this to work, the organization has to be transparent about how long the sales experience can take (2-3 times longer than I was told). Otherwise, I’m only likely to recommend my worst enemies to the experience
What was most compelling about the sales presentation was Chuck’s claim of a 70% closure rate (prospect to buyer). While this may be achievable with a high-pressure sales environment, it is not sustainable in the Digital Age, when consumers can quickly and easily share their thoughts about a product or experience with others. Additionally, consumers can do their own research (at sites like sellmytimeshare.com) and discover that they may not be getting the best deal with the “buy it now” sale strategy. At some future point, the private residence sales organization is going to have to rethink its approach to sales, or risk a tarnished reputation through negative reviews, comments and posts online that have a global reach and indelible presence on the web. As for me, I’m happy continuing to rent houses, apartments or condos when vacationing.