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Monday, January 09, 2006

A Profitable Sunday Morning at The Tucson Home Show
by Chuck

View of the Show

This past Sunday morning my wife and I attended the Tucson Home Show at the Convention Center in Tucson. I normally don't go to these shows, but Victor had volunteered to manage a booth for the Ki Center Martial Arts, where he has been active for years, and had two free passes for us.

Victor in his booth

We got Victor to the Convention Center in time for the 9:30 opening of the show for the day. The parking lot was almost full when we arrived and I was surprised by the large number of visitors who were there at that time on a Sunday morning. We had intended to just take a quick look around and leave. However, we ended up spending almost four hours at the show which occupied both the ground floor exhibition hall and a large upstairs ballroom.

The thing that both surprised me and resulted in our spending so much time at the show were the large number of timeshare vendors. These vendors had large booths with big banners that read Register to Win a $500 Home Depot Gift Card or something similar. Having worked trade shows myself, I know that the purpose of these giveaways is to collect names and contact information in order to try to sell something later. One look at the entry form and I knew, without even reading the fine print, that they were collecting information for a timeshare solicitation. So, I backed off, but Bella, my wife, wanted to try for the prize so, after warning her about the telephone calls she would be receiving, I stood by as she signed up.

I have attended a number of timeshare presentations in the past mainly to get the free gift. But I also had a secondary objective and that was to explore and understand this market with the intent of eventually buying. Early last month, Bella and I attended one in Sedona, Arizona where we did purchase a one-week timeshare with which we are very satisfied.

As soon as Bella began filling out the contest entry form a sales rep came over and began trying to schedule an appointment. I tried to blow off the rep by saying that we recently purchased a timeshare and were not in the market for another at this time. However, rather than backing off, this only encouraged the rep to push harder for the appointment. When he promised a $175 gas gift card and a week's free stay at their resort in Hawaii, I accepted.

We then proceeded to fill out the contest entry form for three other timeshare companies where, in addition to a number of other freebies, which are nice but nothing I felt were worth investing a lot of time obtaining, I obtained promises of a $50 Costco gift card, a $100 Visa gift card, a $20 gas voucher, $10 in cash and 10,000 hotel rewards points (which can be used for airline fares, car rentals, etc. and don't expire). I did not have to negotiate for these, but rather let them give me their quick pitch and then choose the gifts I wanted from the list they presented to me. Since we are planning to vacation in Hawaii this summer using the one week timeshare that we have already purchased, the promise of an additional five days lodging for free was attractive. Since the gift cards can be used for things we normally purchase anyway, we can put what we would normally spend on these things away for our airfare to Hawaii.

Now, I will have to attend a 90 minute sales presentation at each one of these places and, I know from past experience, that they have very good sales reps who will make very attractive offers which will only be available if I purchase at the sales presentation. However, I will counter by pointing out that, first I have just purchased a time share and want to finish paying for that before I buy any more and, second, with two children in college and two more getting ready to go to college we do not feel we can afford an additional time share investment at this time.

I made it very clear to each sales rep that I am not ready to buy additional timeshares at this time for the reasons stated above. But they insisted that they wanted me to attend anyway. They stressed that there was no obligation and produced as many inducements as they could to get me to attend. Why?

First, the sales reps at the Home Show will receive a commission for every qualified prospect they register for a sales presentation. Whether I buy or not, they will receive their commission SO LONG AS I ACTUALLY ATTEND THE SALES PRESENTATION. Another sales rep will give the presentation and that sales rep will receive a commission only if I make a purchase.

Second, the companies know that many of the people attending these sales presentations will not purchase. But they give away lavish gifts anyway, because even when people do not make a purchase, they usually come away sufficiently impressed with the concept to both begin thinking about it for the future and, more importantly for the company, telling their friends about it. At these presentations, whether you buy or not, they not only ask you to tell your friends but also ask for names and addresses of friends and family whom they can solicit for future sales presentations.

Third, the timeshare industry is not that well known and information about it cannot be easily distilled conveyed in a 30 second TV spot. Most people are not going to research and educate themselves about it on their own and, in the absence of knowledge about the product, people are not going to buy it. So these companies need the opportunity to educate the public about the industry.

Finally, while the incentives they provide are valuable to me, I am fairly certain that the time share companies are not paying any where near the price that I would have to pay for the same item. Obviously, a five day stay at a luxury resort in Hawaii would cost me $200 or more per night. But, so long as there are vacancies (which there are, otherwise the companies would not be selling timeshare interests for the resort) it will cost them next to nothing to let my family an me use the room in exchange for the opportunity to sell me a ten or twenty thousand dollar timeshare. Similarly with the gift cards. A $175 gas card would cost me, as an individual, $175. But not only would the timeshare company get a discount for purchasing in bulk but would also probably reduce the price further by paying part in cash and part in rooms and conference facilities. Again, if they are not fully booked, the cost to the resort would be next to nothing but the Mobil Corporation or Costco Corporation could use them for sales and other meetings as well as give them away as incentives to employees. It is a win-win for everyone.

Model Train Club Exhibit

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