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Private Jets, Destination Clubs, Fractionals: 'Act Fast! Supplies Are Limited!'

Written by Bill Youstra 06/20/2007
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Luxury goods marketers spend a good deal of time honing their pitch; positioning their goods and services in a restrained and dignified manner that resonates with their clientele. But the pressure of “making the numbers” and the gut instincts of third-party sales representatives can impinge on that lofty image.

Ferrari - Van Horssen Exotic Car ClubIt’s an unavoidable fact: people – even the affluent – respond to basic sales cues. These apply to nearly all purchases, from mattresses to cars to vacation homes. If there’s a deal you might not get, you want it more. If there’s a deadline you might miss, you’ll act faster. QVC knows what they’re doing.

We’re often asked: are these come-ons real or just a marketing tactic? The answer: it depends. Let’s take a look at the most common appeals.

Going Fast!
The threat of a waiting list is common and often legitimate, especially in fast-growing businesses. Destination clubs are still young, and often freeze memberships to allow time to develop and acquire new homes. A ballooning member-to-home ratio can crater member satisfaction and lead to a revolt. Private residence clubs are built in a phased manner for financial reasons, and this allows them to enjoy several waves of scarcity for the same project.

OneSky jetEven jet programs are reporting a great year. Like destination clubs, they can theoretically always add inventory, but in the short term, waiting lists can be a necessity.

It’s true that the most desirable planes and homes go quickly, and even where product is less scarce, it’s still finite. If you really love it, it’s best to decide quickly.

To gauge the validity of this urgency, ask specifics:

If they say “response has exceeded expectations, but we can add to the priority list if you act now,” ask what they mean by “response.” Is it a signed contract or just an indication of interest? How many such responses are there? How many are on the priority list? What percentage typically fall off the list before signing a contract?

With private residence clubs, ask about the timing of subsequent phases, which may give you an additional year or two to make up your mind. You’ll pay for that flexibility however, as phased price increases are part of the private residence club bible.

fractional ownershipLast Chance at These Prices! Price increases are a natural part of these businesses. Jet programs and destination clubs continue to tinker with their model, and the drive to profitability has been a challenging one. With each increase, savvy marketers use the date-of-increase as a lever to get prospects to sign. Though it’s rare that an increase is concocted to close sales, the deadlines may be malleable.

Act Now for Special Privileges!
These are often unabashed teaser programs for extra flight-hours, special access during peak periods, extra guarantees, upgrades, extended money-back periods and more. Again, even if you can’t make up your mind by the deadline, there’s no harm in asking for these goodies as you negotiate your deal.

The Bottom Line

So should you respond to this pressure? If you’re in love with the offering and are simply dragging your feet, then get off the fence. The promotional benefits are real, and can be quite valuable. (Sometimes too valuable: the earliest members of some jet and home programs enjoy terms that are extraordinary in retrospect. In some cases these terms are a substantial drain on earnings.)

If you’re not yet sure, try to clarify any remaining questions promptly to get to your decision. If you can move quickly it’s likely worth the promoted terms. Take a look at the free Helium Report decision guides (jets, destination clubs, and (“Coming Soon!”): private residence clubs.

If you need more time, don’t allow yourself to be rushed. Take your time to make a sound decision and appeal to your sales representative to extend the same benefits. Bending the rules may be rare, but it occasionally happens.

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