Fractional Ownership: The 90 Minute Sale
Is fractional ownership too complicated to sell in 90 minutes?
According to conventional wisdom, fractional ownership or private residence club vacation homes are much too “complicated” to sell in less than 90 minutes. There’s too much purchaser “education” to do, too many “issues” requiring lengthy explanations, too many “gray areas” needing clarification.
To that, I respectfully reply, “Poppycock!”
A case in point: One morning, I arrived early—it was about 8:45 a.m.—at my office in Franz Klammer Lodge, in Telluride, Colorado. I saw two people, who looked to be in their late 40s and married, zipped into ski suits, trudging along in ski boots and carrying what seemed to be a big, bulky package of ownership documents. I checked with Greg, the only Membership Executive who was in that early, and sure enough, he told me, barely hiding his smug self-satisfaction, that the people had arrived around 8:05 a.m. and now the sale was wrapped up—just in time for our future Owner-Members to catch the first chair.
To be sure, 40-minute sales didn’t happen very often then, and probably don’t happen very often now. And, Greg was exceptionally well-trained.
Nevertheless, I think it important to know that with appropriate training, selling a fractional ownership or private residence club vacation home in less than 90 minutes is within the realm of possibility. I believe that this is achievable, even today, when qualified prospective purchasers are said to be cautious, mistrustful and unwilling to make commitments.
In fact, I believe that it may be necessary to present and close in less than 90 minutes because today’s qualified purchasers are often high-energy, high-functioning, super achievers. This affluent clientele doesn’t normally have the time, the patience and the “sitzfleisch” (your German-speaking friends understand) to spend much more than 60 minutes at a time of their precious vacation listening to a sales executive earnestly drone on and on about “everything you wanted to know about fractional ownership or private residence club vacation homes—whether you asked or not.”
This article presents some of the challenging Frequently Asked Questions (FAQs) that must be handled skillfully and without wandering off point lest customers become bored and leave before sales executives have the chance to pose any “closing questions.” It offers examples of how a sales “train of thought” can easily be derailed well before arriving at its destination. Then, Model Scripts suggest how sales executives can keep the train steadily chugging toward a fractional ownership or private residence club vacation home sale, instead of being sidetracked—or even derailed—by issues better dealt with later on—or not at all.
“Is this a timeshare?”
This question is often asked with fear, skepticism or disapproval. Or, (worse) from a savvy customer, “How is this different from timeshare? Or, (worst) “It’s just a timeshare with lipstick.” (I have literally read this in a fairly recent press article!)
These questions may be less common now, than they used to be. Yet, customers still ask them—especially since nowadays most fractional ownership and even private residence club vacation homes have evolved into permitting rentals and taking part in external or internal exchange programs. So, how can the crucial difference from timeshare be communicated to potential purchasers who are legitimately confused?
Here are some ways that sales executives may go off track in answering this question:
Response #1A : “No, it’s not a timeshare. It’s different.” First of all, we all know that legally, in most places, fractional ownership and private residence club vacation homes fall under the same “shared ownership” laws as timeshare. So, this response, however well-intentioned, is misleading. Moreover, is hiding one’s true legal ownership structure a good way to build a trusting business relationship? (Especially when marketing materials and legal documents are probably required to carry “timeshare” or “fractional” or “residential interest” disclaimers.) The word “different” in the answer pushes the dialogue way off track into a comparison of fractional or private residence club ownership vs. timeshare—which is well beside the point because the purpose of the discussion is not to discuss timeshare. Besides, any such comparison is subjective and open to dispute. This not only wastes more time, but can come off as “snooty”—rather than as a forthright, honest answer to a basic and legitimate business question: What is it that you’re offering for sale?” (Also, it’s a bit harsh to say a flat out, “no” to a customer.)
Response #1B : “Well, let’s think of it this way. A Day’s Inn and a Ritz-Carleton Hotel both provide you with a place to sleep, but the guest experience in each is quite different.” While this response offers the virtues of reframing the question and offering an answer that comes closer to the truth, it too, needlessly complicates matters, by confusing the subject property with two nationally branded hotels that are irrelevant here. And, yes, this answer, too, misses the point of the question as to what a purchaser of a fractional ownership or private residence club vacation home actually owns. Also, it wastes precious minutes and may put off some people by appearing elitist.
Response #1C : “That’s a great question! I’m glad you asked it. What do you know about timeshare?” (Or, a worse response) “What if it were a timeshare?” (Or, the worst response) “Have you had a negative experience with timeshare?” Here, the sales executive does well to compliment the question and the customer and to involve the customer in the sales dialogue by asking a question in return. But, if a sales executive responds with any of the above questions, he/she is accepting the customer’s label of “timeshare” along with whatever (undetermined and unknown) associations (both positive and negative) that the customer makes with that label.
From a marketing and sales point of view, it is not a best practice to go into the legal classification of the property’s ownership so early in the meeting when relating to a customer, discovering needs and presenting the vacation experience are of primary importance. Moreover, customers should not be the ones to frame the discussion. That’s the role of the sales executive. The engineer’s job is to drive the train; the passenger’s job is to enjoy the ride.
A comparison early on of fractional ownership or private residence club vacation homes with timeshare frames the dialogue poorly. It can lead to a sales executive’s long-winded, complex and dreary soliloquy on how fractional ownership is and is not the same as timeshare along with a dissertation on the legal vs. experiential ramifications and repercussions thereof and thereunder—by which time the customers are either nodding off or heading out the door to engage in an activity—any activity—that’s a tad more fun. (Okay, a bit of hyperbole, but only to make a point.)
This response misses the express track toward creating a good relationship with the customer, uncovering vacation needs and showing how the property can fulfill these needs. This is not even the local track. This sidetrack can even be a pre-cursor to derailment.
The customers are on holiday, after all. Why not cut them a break? They asked a simple question on what fractional or private residence club vacation home ownership is. Don’t they deserve a simple answer? Why not offer one that’s understandable, engaging and even truthful? (Perhaps a customer’s idle curiosity can turn into a sale.)
Model Script #1:
Sales Executive : “That’s a great question! [supporting] I can understand your asking it. [supporting] Many people we meet with here also believe what you suggest. [supporting]
SE : (said pleasantly, with genuine curiosity) Are you interested in the potential resale value of your investment?” [exploring, sharp-angle turn, reframing, assumptive, trial ownership question based on a secondary issue—resale value]
Customer : “Of course.” (The very early assumptive “trial ownership question” is unexpected, especially after the support, and there shouldn’t be resistance to it. (See: ABCs of Sales—Always Be Closing)
SE : Then you’ll be pleased to know that what we offer is fractional /private residence club ownership of your vacation home. Your fractional/private residence club deed works like the deed to your home and can be resold by real estate agents. It’s not like the title to a new car that loses value the minute you drive it out of the showroom.” [reframing, assuming, informing]
SE : “Have I answered your question satisfactorily?” [verifying] (question optional)
SE : (said pleasantly, with genuine curiosity) “Is this the sort of real estate you’re looking for?” (question required) [exploring, assumptive]
A technical analysis of what Model Script #1 aims to do reveals a number of goals.
By complimenting the customer, the sales executive starts to create a relationship of trust in which it is “okay” to ask questions or raise objections. This is the foundation of the back and forth dialogue essential to closing a sale.
The sales executive further supports the customer by saying that other people come to the office (there’s traffic), and the customer is not the only one to believe what he/she suggests. The word “timeshare” is never used.
Instead, the customer’s attention is turned sharply away from timeshare and toward the potential resale value of the fractional ownership or private residence club vacation home.
The support that the sales executive offers the customers relaxes them and helps makes them less fearful and less resistant to the shift in focus to the potential resale value of what has now become their “investment.”
Fractional ownership and private residence club vacation homes are defined by the non-judgmental, easily understandable and refreshingly truthful and accurate essential difference from timeshare properties—the resale value of owning the deed to one’s home vs. owning the title to a new car.
On this solid foundation of real estate ownership, the sales executive can build even more value by describing or demonstrating the property’s amenities, services and benefits—most not usually available in a primary home. No time or energy is expended on discussing the “inconvenient truth” of fractional ownership and private residence club vacation homes falling, in most locales, under the same legal definition and rules and regulations as timeshare.
After giving information, the sales executive seeks to get information about the customer’s interests and vacation needs, thus regaining control of the dialogue.
The sales executive verifies that the customers have understood the answer and are satisfied with it. (This step is optional, if customers seem to “get it.”)
Explanation of fractional or private residence club vacation home ownership is followed by a trial ownership question as to the customer’s motivations or needs. “Is this the sort of real estate you’re looking for?” positions fractional ownership and private residence club vacation homes securely under the very desirable umbrella of real estate ownership.
The sales executive retakes the throttle from the customers and drives the train forward on the express track to ownership by asking an “assumptive” trial ownership question that assumes a) the customers own their own home; b) they are looking to purchase real estate; and c) this is the sort of property they have in mind. (Assumptiveness is used here not to “close the sale,” but to “discover what the customers want/need.”)
The Model Script gently allows the “Look-ie Lou’s” to disqualify themselves.
Rolling Toward The Close
So, the fractional ownership train may be rumbling out of the station, but the engineer is far from being out of the woods and back on track.
If not handled properly, the train could lose speed being sidetracked by premature and “untimely” questions, such as: “What’s the fraction?” “How many weeks do we get?” and “How does the reservation system work?” These questions may cause significant unscheduled delays that make for an unpleasant, uncomfortable and ultimately unproductive journey.
And, there’s still a minefield of questions remaining that could easily derail the train, not the least of which is a question that customers rarely articulate, but one that is almost always foremost in their mind: “Is this a good investment?”
Ideally, the sales executive’s dialogue with the customer should next head into relating more to his/her walk-in guests and discovering their vacation needs. The good news, though, is that the questions at least demonstrate some knowledge of the industry. The magic way to avoid these “inconvenient” pre-mature questions is not to pause waiting for them to be asked, but for the sales executive simply to take control and move on promptly to the next question on the sales executive’s agenda, not on the customer’s agenda.
If the necessary first steps of relating to the customers and discovering their vacation needs have not been accomplished thoroughly, and if customers have not had sufficient chance to engage with the experience of the property—its location, comfort, quality, amenities, services and so on, then answering questions on “fractions” or “weeks” needs to be delayed.
If a sales executive simply answers, “one eighth,” or whatever the fraction is, he/she may be stepping onto a fatal “third rail.”
The basic principle is this: Discussing fraction size /number of weeks of use/reservation system, etc. must be delayed until the value of the vacation experience has been solidly established in the customer’s mind. Some ways to delay answering premature questions are illustrated in the following model scripts.
Model Script #2 :
Sales Executive : “I’ll be happy to share that, but first, tell me…, [whatever information on the vacationer’s wants, needs and vacationing problems the sales executive still lacks in order to make an effective presentation] so that I may better serve you and present only the information most important to you (and save you precious vacation time.)”
Or, “I’ll get to that shortly/in a moment. Let’s just first take a look at…”
Or, the sales executive may use any response he/she customarily employs to defer answering questions such as, “What’s the price?” that arise “too soon,” i.e., before customers appreciate the value of the opportunity being offered.
Model Script #3 :
A less favored response—that may be used if the customer strongly insists—is:
Sales Executive : “There are eight (or whatever number) owners per home. (no pause here!) Are you familiar with all the year-round activities that the resort offers? There’s…(enumerate activities) Which of these do you and your family enjoy? Have you tried…(activity or restaurant) yet? Wasn’t it great?”
In these Model Scripts, the sales person keeps hands off the “live wire” of discussing “number of weeks” (by answering in terms of owners per home) and without pause, redirects the customer’s attention to whichever of his/her agenda items still need coverage—more relating, more discovering, touring the property, presenting amenities and services or moving to the next display area in the “Discovery Center.”
It’s a good idea for sales executives to script and share with each other their favorite different ways of re-focusing customer attention on the benefits of the property, after distracting questions threaten to stop the train dead in its tracks. Then, these responses can be memorized and practiced out loud with team members. (Practicing with customers is prohibitively expensive!)
By the way, the sales executive’s question above, “Wasn’t it great?” may be considered a “trial close” or, as I prefer to call it, a “trial ownership question.” Asking a good number of these questions (each worded differently, but usually requiring simple “yes” answers) throughout the meeting gives the sales executive an idea of the level of involvement that the customer has with the resort and with the property.
If the customer seems cold or lukewarm, the sales executive must discover more vacation needs and build more value. If the customer is “warm,” the sales executive may start asking “request for an ownership decision” (closing) questions.
Sales executives may consider writing and practicing memorized scripted lists of “trial ownership questions” and “requests for an ownership decision” (closing) questions. These questions need to be practiced out loud until they sound spontaneous, effortless and part of the sales executive’s personality. (It’s like reading naturally from a teleprompter, except the teleprompter is in one’s head.)
As suggested above, disclosing the number of weeks too soon may result in a train wreck, as illustrated in the following disaster:
Customer : “How many weeks do I get?”
SE : Four (or whatever the number).
Or, even worse: SE : Four Guaranteed Planned Weeks plus Space Available.
Customer : “I can’t use four (or whatever number) weeks!”
The customer prepares to charge out the door, and the train is effectively derailed. (There are no passenger injuries, but the sales executive’s ego is suffering bruises sustained from trauma due to rejection.)
(By the way, arguing with customers that they don’t have to use all the weeks is fruitless. In their value-conscious minds, if they’ve paid for all the weeks, they want value from all their weeks.
That’s why sales executive need to custom-craft ways to show customers how they may enjoy the full benefits of the property (based on their particular vacation lifestyle and interests that they have already shared in Discovering) well in advance of any discussion of number of weeks of use.
It’s tough, but not impossible, to clear this wreckage from the tracks.
Sales executives could ask customers:
SE :“If you did own [the property], just imagine for a minute, how would you enjoy it?
If the customers have weeks left over, ask them to think of whom they would like to invite as their vacation home guests. Which people among their: Family members, friends or neighbors; Fellow city or country club or church, synagogue, mosque or ashram members; Running, gym, golf, tennis or yoga buddies; Knitting or quilting circle, coffee klatsch gal pals; Bridge or poker club players; Business or professional associates or employees, vendors or suppliers. Who doesn’t need and love a nice vacation? It’s the perfect gift for special people on their birthdays, honeymoons, wedding, anniversaries, divorce, graduation, mother’s/father’s day, confirmation, Christmas/Chanukah.
Or, sales executives may ask if the customers would want to rent or exchange their home (if the property permits this) or to donate a week to a charity auction. If the customer doesn’t have a favorite charity back home, perhaps the sales executive can have a list of three local charities that would gladly accept a donation of a week to auction off to raise money for a worthy cause.
Okay, let’s assume that a customer has patiently co-operated and has disclosed his vacation lifestyle and what improvements in it he/she would like to see and seems somewhat interested in the property. A discussion of the reservation system is warranted, but doesn’t call for a sales executive’s “brain dump” of every last little detail.
Many believe the most complex and (perhaps only) legitimately difficult part of selling fractional ownership or private residence club vacation homes can be one of the reservation systems—of which there are several types and subtypes.
Among the more challenging is to explain and understand is the “rotating priority reservation system”—which not all properties use, fortunately. I’ll spare you the details here because it’s not fun to read and even less fun to describe. (If you’re interested in details, just search in Google and tons of good info will come up.) Suffice it to say, that from an historical point of view, the fractional ownership and private residence club vacation properties that pioneered this type of reservation system way back in the 1990s were The Deer Valley Club, “A country club for skiers,” in Park City, Utah and Franz Klammer Lodge, Private Residence Club, in Telluride, Colorado.
In the meantime, our hard-at-work sales executive has been talking with his lukewarm customer who has just asked how eight owners of one home share Christmas-New Year’s Week. A response, depending on the property’s use rules, could be:
Model Script #4 :
Sales Executive : “That’s an important point, and I’m glad you raised it.” [supporting]
“Our members make their reservations online or by phone.”
“Each owner has ___ weeks of Guaranteed Use, __ in Winter, __ in Summer.”
“Our staff of dedicated reservationists and a sophisticated computerized reservation system ensure that owners enjoy equal access to peak use times over the years through an equitable rotation system.” [informing] “Are you with me on this?” [verifying]
(More advanced—only upon request) “Owners whose first holiday reservation choice isn’t filled, rotate up in priority so that they are more likely to have their choice filled the next time and so on. [informing] Is that enough for now, or do you need more?” [verifying]
If there is still a desire for additional information, it would be good to ask, “What particular situation/s do you have in mind?” [exploring]
This question is a good sign, as the customer is imagining what his/her personal vacation use might be like. Ideally, the sales executive has on hand written, audio or video testimonials from owners as to their satisfaction with the fairness of the reservation system.
By all means, supply necessary additional information as requested, but at an early or medium stage, there’s no need to go into the details of dates when the twice-yearly calendars are sent out and the deadlines for owners to return them.
There’s still plenty of time to review, in writing, this and all the other information such as HOA dues and what they cover, etc. when ownership documents are given out along with the ownership agreement to be authorized.
At that point, a simple printed chart on the reservation system, prepared by marketing, and explaining the rotation system should be given to prospective owners and reviewed with them.
Skilled salesmanship consists not only of giving out information correctly and clearly, but also holding back less important data so as not to sidetrack the train of thought as it speeds forward toward ownership.
About The Author
David Disick has been involved in the fractional vacation home ownership industry since 1992. His pioneering development, the award-winning Franz Klammer Lodge in Telluride, Colorado, was the first property to be branded as a Private Residence Club. This trend-setting property set the stage for the creation of the wide variety of private residence clubs in today’s market and was essential in establishing the prominence of this luxury segment of the industry.
Mr. Disick has written numerous articles on fractional ownership and spoken at many industry conferences. Fractional Life has named him to its list of The Top 21 Fractional Real Estate Professionals of 2010. He is the author of Fractional Vacation Homes: Marketing and Sales in Challenging Times, which expands on the material in this article.