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David M Disick says the new EU timeshare directive offers developers opportunities as well as challenges.

                             "If life gives you lemons, make lemonade."—Dale Carnegie                                  

Naysayers and prophets of doom and gloom are predicting that the new Timeshare Directive will deal a fatal blow to developers of fractional ownership properties in countries belonging to the European Union.

The long-anticipated and much dreaded Directive, to be enacted February 23, 2011, has led to considerable hand-wringing in the fractional industry and doom and gloom prophecies of the imminent demise of fractional ownership in the EU.

As most people know by now, the Directive defines fractional interests so that they fall under timeshare regulations.  The provision that arouses the most handwringing and has developers’ knickers in a twist calls for a 14-day “cooling off period” starting with the date of a sales appointment.  During this time, developers are prohibited from taking any reservation or deposit monies from customers.

While, like many people, I don’t generally welcome government interference and regulation, there may be a silver lining in the apparently dark clouds of the new Directive.  After all, its intent is consumer protection and should therefore benefit the public. 

Since implementation and enforcement of the Directive is inevitable, developers are advised to comply with its various provisions, rather than engaging in futile efforts to circumvent them.  Developers can benefit from the opportunity to announce publicly their full compliance with this regulation in the public interest and thus can gain market credibility for themselves.  They can publicize their compliance through press releases and appropriate statements in their marketing and sales materials, on their website and on signs in the sales office or model unit. 

As a further step, perhaps professional trade organizations such as FSOTA or RDO can create a medallion or “seal of approval” that members can display prominently to assure the public that they are reputable businesses and conform to all applicable regulations. This can help engender the trust of customers—the foundation on which sales depend.
Furthermore, the Directive can serve to lessen the natural resistance that customers put up when they feel threatened by an agent trying to pressure them into buying.  Once prospects know that “nothing can happen” in terms of pressure to make a financial commitment, they lower their defenses, co-operate more in answering questions, participate more actively in the back and forth discussion and become more receptive to the sales agent’s presentation.

In fact, sales agents can be trained to deliver a “negative sell” (also known as reverse psychology) message, which, if properly executed, can be highly effective in improving the atmosphere of the sales appointment. In a prepared and well-rehearsed script, agents announce “up front” that they have no intention of asking prospects to make a purchase decision. 

Following is the context for the announcement and some suggested wording: After the agent has suitably greeted the prospects and engaged in a brief warm-up chat, the agent transitions to the Discovery portion of the meeting with the following words:  “Let me begin by thanking you for the time that we’re going to share today.  I hope we can consider this meeting somewhat preliminary, meaning that I’d like to analyze your needs and get a feeling for what you’re looking for. Oh, by the way, I don’t think we should be in any hurry.  You’ll have lots of time to think about it.”  (The last sentence can even be said with a knowing smile.)

This script serves to relax agents as well as prospects.  Agents can then focus their attention more effectively on the crucial task of developing a good, strong relationship with customers. They can accomplish this by asking appropriate questions about how they vacation now and listening with highly focused attention so as to comprehend fully their unmet vacation needs. 

Eventually, the agents come to understand their customers so well, that they can align with them, “get inside their heads”—so to speak—and see the property through their eyes.  From this perspective, agents can “advocate” how the property can fill a gap in the prospects’ current vacation lifestyle. 

By assuming the role of a counselor allied with customers for the customers’ good, agents can shed their traditional stance.  No longer are they self-interested adversaries who must overcome customers’ objections as they seek their own personal gain.  Rather, they take on the role of trusted guides who offer valuable direction, information and support so that customers are allowed to make good decisions for themselves.

The essential goal of this “relationship sales” technique is forming a strong bond with customers by demonstrating that their needs—and therefore the customers themselves—are heard and understood.  The sales person is on their side and is acting with their best interests at heart.

Once customers have left the “ether” of the resort, their vacation memories may grow dim as they are engulfed by their workaday world.  Nevertheless, the warm, caring relationship of trust and understanding that the agent has cultivated can still remain at the forefront of their mind—if the parties stay in touch.  And this is what agents can—and indeed must—make possible during the cooling off period.  I offer a few thoughts on how to do this within the letter of the law.

The Directive, as far as I know, does not prohibit communication with prospects during the 14 days following the appointment.  And, while developers may not take any money, I don’t believe any regulation forbids them to give small, low-cost gifts to customers, accompanied by a personalized note from the agent.  These gifts can serve to remind prospects of how much they enjoyed their vacation at the resort and provide a reason for agents to maintain contact and continue the relationship that has been developed.

This proposed idea for relating to customers during the “cooling off period” is based on current practices in the fractional industry.

Standard “Be Back” procedure for customers not committing to a property while at the resort has been to call, reminding them of the positive feelings they have expressed and asking something along the lines of “Have you thought more about it/discussed it?” etc. 

Agents can find these obligatory calls to “cooling” prospects frustrating because people are suddenly tied up and fail to return their repeated messages.  Moreover, agents often are at a loss for something new and interesting to say as a reason for their call.  At worst, customers may feel harassed.

Another common marketing and sales procedure is providing a small “anti-cancellation” gift to purchasers who have “authorized” reservation or purchase agreements.  (I prefer avoiding the intimidating word “signed.”)

Why not combine these practices, even though no authorized agreements yet exist?  By this I mean sending a series of small surprise gifts to qualified prospects after their departure from the resort.  This can provide agents with something new to say to customers and offers agents a reason to maintain email and phone contact with them.  Agents can enquire if the gift has arrived, if it was suitable, etc.  They can also deliver news of the resort and offer to clarify questions that customers may have.

No attempt is made to ask people to buy during these brief, purely social “checking-in” calls.  That can be saved for Day 15 and after. If prospects are non-responsive, then gifts and phone calls cease.  Prospects can stay on the mailing list until they opt out or are culled because they don’t open emails sent to them.

Note: The gifts offered will be far more credible and effective and will appear less manipulative, if prospects have already received gifts during their stay at the resort. These gifts can include a welcome basket with fruit or cheese, coupons for complimentary beverages, a bottle of wine, a fridge stocked with snacks and so on.  This sends the message that courtesy gifts are the way the company likes to pamper its owners and guests.

It’s also a good idea for agents to ask at the end of the sales appointment for the customers’ permission to “stay in touch with them” by email and phone over the next couple of weeks.  Of course, their desires as to the contact they will agree to must be obeyed.  A primary rule of the New Marketing is, “Never intrude, Never interrupt, and Never intercept.”

Here are some gift ideas just for starters to “warm up” prospects during the “cooling off” period:
1. Send customers a small “Welcome Home” bouquet of flowers.
2. Ship small, inexpensive logo wear items such as a ball point pen, memo pad, resort stationary, computer mouse pad, sun visor, ski patch, headband, golf cap, canvas tote bag, etc.
3.  Send a few stamped postcards for customers to mail to their friends telling them about the great place where they have just vacationed.
4.  Surprise customers by emailing to them photos of the family taken in the model unit or sales office.  Post their pictures on the company’s Facebook page.  (Call the customers in advance for permission and encourage them to write “something nice” on the company’s wall.)
5.  Email a recipe from a well-known local restaurant or one that that the family has specifically enjoyed.
6. Mail an appropriate food or food ingredient (candy, pancake or crepe mix, tea, jam, or other non-perishable) that is a specialty of the resort.
7.  Ship a small paperback book on the history of the area.

Gifts need to be accompanied by a personally addressed note, hand-written when possible.  The idea here is to maintain a warm relationship and give prospects good reason to call the agent to say thank you.
Of course, gifts need to be handled carefully.  They must not be construed as “bribes” or acts of desperation by over-eager sellers.  Rather, they are small token reminders of the customers’ stay at the resort and a gesture of thanks for the time they spent researching the property.

Multiple gifts can be sent—even daily or every other day or so depending on one’s judgment of individual prospects.  Sales agents can compete for prizes for thinking of appropriate cost-effective ideas.

This programme can generate excitement among sales agents who now look forward to their obligatory follow-up calls with prospects. It can be especially gratifying to agents when they may not have to go through the drudgery of making outbound calls because customers may be calling them first to say thank you.

Another advantage is that the program can generate good “buzz”—favourable word of mouth amongst prospects and people in their spheres of influence about the level of service that the property delivers.  Whether prospects ultimately purchase or not, agents who have cultivated a strong, positive relationship can still comfortably ask for referrals of friends and family.

In addition, the gift program can be far more cost-effective than press releases, ads, or website statements that “tell” about the high levels of personal service that the property offers.   Rather, the gift program can convincingly “demonstrate” it through “small acts of random kindness.”

In sum, far from being detrimental to fractional ownership, the new EU Timeshare Directive offers the opportunity to make known to the public that they will not employ uncomfortable “high pressure” sales tactics to persuade people to buy. 

The Directive also provides a necessary wake-up call to the industry. Now more than ever, training sales agents in “low-pressure” relationship sales techniques assumes even greater importance. Agents skilled in opening a deep and trusting relationship with customers will be in a stronger position to close sales with them. Thus, the Directive, inadvertently perhaps, offers new opportunities for more effective marketing and sales programs. Will developers take advantage of them?

David M. Disick is a fractional pioneer and active consultant to the industry.  This article expands on the relationship marketing and sales philosophy set forth in his new book, Fractional Vacation Homes:  Marketing and Sales in Challenging Times. It will be available starting January 1, 2011 at 1:01 a.m. (Mountain Time) through his new website and blog, fractionalsandprcs.com.