Timeshare Firm Gets Feet Wet With the Net
07/29/04- Brandweek.com

Once known for its high-pressure sales techniques, the timeshare resort industry has gone mainstream, with big lodging companies like Marriott, Hilton and Hyatt all involved in buying and building vacation-ownership properties. Timeshare sales for Marriott, for example, totaled 14 percent of its revenue in 2003. Overall, timeshares have become a $66.7 billion industry, according to a study released by PricewaterhouseCoopers in April.

Despite drawing big names, the timeshare resort industry largely consists of smaller companies like Phoenix-based Princeton Resorts Group. Unfortunately, these companies have operated in a kind of marketing time warp, relying on old-fashioned direct mail and cold calling. "These guys are doing [marketing] stuff that worked well in '70s," said Roman Bodnarchuk, CEO of N5R, the digital agency handling a new Princeton campaign that launches this week. "They use lots of direct mail, and their cost per lead is huge."

The N5R effort still involves direct mail -- a postcard -- but it then directs consumers to their own personal Web site. A pre-populated registration form will make entering data about themselves much easier. As an incentive, a grand prize of a lifetime of vacations will be offered. In addition, if contest entrants refer a friend, they receive an online "scratch card" and the chance to win a secondary vacation prize. "It's simple, but nobody else is doing it," said Bodnarchuk. "We're using the Web as the business reply card."

With the new tactics, Bodnarchuk said response rates could approach between 16-32% -- rates they've achieved for others in the industry. In addition, Princeton Resorts is getting a wealth of information about potential customers, "so when a telemarketer follows up, he can tailor the call to the individual," he said.

The new strategy was a long time coming, said Michael Murray, director of creative services, Princeton Resorts Group. Murray estimates that do-not-call legislation caused the company, and the industry, to lose about 30% of its business. "The industry -- and that includes us -- was slow to react, as usual," said Murray. It took about a year for Murray to find the right online agency to help implement a campaign. He picked N5R not for one quality, but for "a lot of little distinctions that they've made."

The new campaign will change the way Princeton's outbound call center will do business, said Murray. "Instead of grinding out cold calls, they're going to taking cold leads and turning them into hot leads. Plus, we'll now have an extensive profile on people so we can the pitch exclusively to them," he said.

Toronto-based N5R has experience with timeshare resort marketing, counting resort developer Intrawest as a client. "I don't know of any other brands or any other industry that spends as much money percentage-wise on sales and marketing as these guys do," said Bodnarchuk. "Our biggest client is Procter & Gamble, and they would never spend more than 10% of sales on marketing. These companies won't think twice of spending 50-cents on every dollar."

Murray sees the new campaign as money well spent. "I'm looking to get back that 30% shortfall and then some," he said. "At the end of the day I'm looking at lower costs and a lot more sales out of it."