It all comes down to return on investment. Each marketing program has a measurable contribution to your bottom line; some programs flop and some succeed. As a business metric for timeshare marketing, Value per Guest is a solid starting point to understand the success or failure of your sales efforts. Each program will generate sales tours and each program will exhibit varying closing rates. The average sales price per a tour will also vary from source to source. While VPG is a good evaluation tool, it does not take into consideration the underlying cost associated with each program. When investigating sales efficiencies, make sure you take into account your cost of marketing.
Generally Value per Guest is measured by taking the dollar volume of your sales for a specific tour source and dividing it by the total number of guests toured. For example, suppose Resort X is running a drop box program and they want to measure their VPG for the month of October. Let’s say this specific drop box program has generated $49,000 in sales while showing 28 tours in the month of October. The Value per Guest for the drop box program for the month of October would be $49,000 divided by 28 tours or $1,750. This effectively means that each tour generates $1750 in gross sales for that program for the month of October.
Could a program have a solid VPG with a bad Return on Investment? The answer is yes. Value per a Guest is based on a measurement of gross revenue per a guest. Resorts and marketing companies need to keep in mind that while metrics like VPG are a helpful indicator of sales success, they do not necessarily shed light on the bottom line profits. Imagine a marketing program that generates tours based on telemarketing leads that cost 3 dollars a piece. In this imaginary program, the phone room is only able to convert 1 out of every 200 leads they call into actual onsite tours. Let’s pretend that the premium associated with each tour is a 3 night stay at a discounted rate of $100 per a night and includes a gift certificate that costs the resort $50. If the program has a VPG of $1300 then and the cost of marketing is $950 per tour, then the net revenue before sales commissions and taxes is only $350. Now obviously, those numbers are exaggerated, but it is easy to see how a program with an apparently healthy VPG might actually be under performing a program with a smaller VPG but a healthier cost of marketing.
At Whitecap we focus on providing your team with software and marketing capabilities that can generate high-quality tours with an extremely low cost of marketing. All of our plans have a low fixed monthly rate. With a fixed rate you can cut down your associated variable marketing costs and spread your fixed cost over the total number of tours that your generate. Currently the Select plan starts at just $499 a month. If you generate 20 tours over the course of that month your promotional cost of marketing drops to less that $25 per tour. At those numbers your low cost of marketing will prop up your return on investment. Apples to apples, it hard to find a better deal and with our 30 day free trial, it is definitely worth checking us out.
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