We continue to hear the standard explanations as to the stagnant sales of resort real estate developments:

1)     Consumers can’t afford to purchase second home real estate anymore because they took such a hit in their savings and retirement accounts

2)     Consumers can’t justify the expense right now because they are still worried about market turmoil and the possibility of values dropping further. 

3)      I even heard one example of someone who said they wouldn’t buy because it would look bad to their friends; i.e. “rubbing it in their faces”

4)      There is no consumer financing for fractional and until that comes back, nothing will sell.

All of these are valid reasons and are probably true. But there is another that I’d like to bring up: In difficult times, developers feel the need to respond with extra perks, incentives and reduced prices – probably warranted in many cases. But what many consumers are looking for now are good opportunities with reduced risk. Consumers who can afford to buy do not because of the perceived risk factor. The best way to combat that is to ‘wow’ the customer with the product and comfort them with a risk mitigation tool. How do you do that? First and foremost, implement a fractional ownership offering if you haven’t already done so. It is a practical offering in a time when savvy consumers are looking for practical uses of their discretionary income and it inherently reduces exposure because of the lower price point. With that assumption, here is what my company is doing to improve resort developers’ chances of realizing a strong ROI in a bad economy:

1)      Improving our sales process with more personal and customized messaging to the lead database

2)      Implementing new technology to increase sales velocity, increase closing percentage and reduce heavy marketing costs

3);     Implementing risk mitigation tools that will lead to higher closing percentages

4)      Introducing urgency tools to help close those leads faster

5)      Enhancing our owner communication program to embrace those who have already purchased – this will undoubtedly lead to more high-percentage referrals

6)      Implementing a new, smarter real estate broker referral program

And finally, we are paying for it and sharing the risk with our developer clients. We have wiped out 90% of all upfront costs and are paid primarily by performance – i.e. sales revenues. It costs developers very little to implement this process, making it easier to shift gears mid-stream if current sales strategies are not working. Learn more about Pierce Group’s ClearView Sales System™

Eric Pierce is President of Pierce Group, LLC a full service fractional ownership consulting firm. Pierce Group specializes in the design, sales and marketing of upscale Private Residence Clubs. Our clients are developers, land owners, senior lenders, and private equity firms involved in the development of fractional real estate projects. We have consulted and managed properties from Florida to Flagstaff, Chicago to Cabo and Idaho to Israel.