Leveraging New Economic Insights

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Leveraging New Economic Insights

Leveraging New Economic Insights

to Develop More Effective

Go-to-Market Strategies

A Marriott Vacation Club Business Case Overview


Session Purpose

• Demonstrate that Income is Worthless

• Finding the best prospects is a universal challenge for all marketers

and the more data we have the harder it often becomes to prioritize

‘what differentiates the best from the worst’

• Our goal today is to unveil a new economic insight approach that you

may want to add to your selection criteria for capturing the right

audience for your product, service or experience

• This approach is helping us separate the good, the average and the

‘worthless’


Roadmap For Today

• Marriott Vacation Club International (MVCI)

– Marriott Timesharing

– How We Target Today

– Expanding Product Portfolio Requires New Selection

Tools

• Echelon/DSI

Economic Insight vs. demographics

– MVCI Business Challenges requiring econographics

– Discretionary Spending Measure and Examples

• Q&A


Introductions

• Urcil Peters

– VP, Demand Generate & Database Marketing,

Marriott Vacation Club International

• Dom Albanese

– VP, Marketing & Chief Marketing Officer,

Marriott Vacation Club International

• Jim Koppenhaver

– Group VP, Echelon Marketing


Industry Leader:

• Marriott has 15 powerful, high-growth

lodging brands-providing a product for every

type of travel need.

• Marriott Rewards is the biggest and best

frequent traveler program in the Lodging

industry with nearly 20 million members.

• Marriott’s worldwide reservations system has

the lowest cost per reservation in the industry

J.W Marriott, Jr.-

Chairman and CEO


Timeshare Industry Overview

• Wall Street estimates that Timesharing will

generate revenue of $42 Billion dollars over the

next 10 years

– Up from an estimated $8B in 2004

• Several major brands have time-sharing divisions

– Starwood, Hyatt, Hilton, Marriott and Disney

• And have the same goal – how do we get our

piece of the multi-billion dollar pie

• And all face the same challenge – how do we find

the best prospects for our resorts


Our Real Estate Brands

Quality Tier- Timeshare Ownership

Avg. Price: $25,000

Luxury Tier- Fractional and Private Ownership

Avg. Price: $175,000 - $1,000,000+ Avg. Price: $325,000 - $3,000,000+


Can We Make This Grow Even Faster?

MVCI Sales History

$1,400,000

$1,200,000

$1,000,000

$800,000

Sales

$600,000

$400,000

$200,000

$0

Yea


Marketing Model

• Plan, Implement and Analyze campaign offers

• Identify the ideal Customer and allow them to purchase our

Product through their Channel of choice.

Customers

Owners

Referrals

MVCI

Hotel

Partner

Affinity

Open

Channels

Broker

Direct Sales

In-house

Linkage

Media

OPC OPC

Direct Mktg.

Product


The Best of the Best & the Best of the Rest

• Lowest cost of marketing

• Highest volume of lead

• Smallest universe

Move to Reduce Purchased Lists

Owner

MVCI

Marriott

International

Partners

Vertical

• Highest cost of marketing

•Low volume per lead

• Largest Universe

Horizontal


Data & Contact Management Support

Legacy Systems

Partner Data

Purchased

Lists

Surveys and

Profiles

Awareness

Demand

Generation

Marketing Database

Campaign Planning

Aligning Customer, Channel and Product Offerings

Contact Management

“Suspects”

Aggregate, Profile, and Maintain Customer Marketing Information

“Prospects”

“Customers”

Capturing and Remembering Customer Preferences, Behavior and Activities

Transactional

Information

Product

Introduction

Purchase

Service

Fulfillment

On-Site

Experience


Evolution of Precision Targeting

Geographic

Age & Income

Lifestyle & Psychographics

Net Worth

Discretionary Spending Index


The MVCI Problem Setup

• By making income our primary selection tool we have

achieved good results

• But we have also run into our fair share of challenges with a

focus on income, home value, and net worth

– $75K goes further in Des Moines than New York City

– Consumers can be house rich (lots of value) but cash and credit poor

– And getting an accurate read of net worth remains elusive

• MVCI now has multiple product types (fractional, private

residences, timeshare) and we need to attract prospects and

buyers from across a broader spectrum of the population

• To succeed we need a better tool to read true wealth among

our suspect universe


Income is Worthless

Because it is

“Wealth-less”


Things That Make You Go “Hmmmm”

• Why would the timeshare industry be interested in

economic insight when blunt instruments of mail and

phone had worked so well in the past?

• Our problem is similar to one that many of you face

• How do we get the most bang for our buck?

• How do we fill our pipeline with the best leads knowing

that brand affinity, product familiarity and ability to pay

play a role in getting our prospects to become buyers?

• Collectively known as the “paranoid market leader”

syndrome


Accurate Econographics Has Been The

Missing Link in Customer Insight

Capacity

(ability to invest in the brand)

Capacity

Affinity

(involvement in/exposure

to brand)

Affinity

Propensity

Propensity

(predictive profile

characteristics like lifestage)

We have the foundation for superior and actionable insight that drives

smarter marketing decisions


Economic Insight Is a Multi-

Dimensional Puzzle

Income

Spending

Power

Expenses

Financial

Resources

Spending Power is not:

- HH Income (money in)

- Net Worth (balance sheet)

- Home Value (tangible asset)

- Income Producing Assets (investment inc.)

- Credit Score (record of repayment)


“And Now, For Something

Completely Different”

Net

Worth

Financial

Assets

+

HH

Income

Discretionary

Income

+

Home

Value

Home

Equity

=

Echelon

Discretionary

Spending

Index

A continuous household-based

score of 0-1000 that can be

appended to customer and

prospect files to measure levels

of spending power


Looking For Wealth vs. Income:

The Key to Discretionary Purchasing

DSI Class DSI Range

Average

Household

Income

Average Home

Value

Average Net

Worth

1 901-1000 $ 250,960 $ 565,424 $ 2,462,891

2 801-900 $ 169,732 $ 501,575 $ 1,581,015

3 701-800 $ 196,379 $ 620,189 $ 1,769,716

4 601-700 $ 145,636 $ 421,211 $ 1,512,110

5 501-600 $ 158,719 $ 320,025 $ 936,896

6 401-500 $ 123,971 $ 304,784 $ 728,818

7 301-400 $ 98,673 $ 188,198 $ 513,500

8 201-300 $ 58,102 $ 112,691 $ 239,367

9 101-200 $ 41,670 $ 65,773 $ 124,934

10 1-100 $ 31,735 $ 46,294 $ 111,309

Source: Echelon Marketing Group and SRI-BC MacroMonitor, 2004-2005


The Next Step: Moving From “Ability To

Spend” To “Demonstrated Spending”


Beyond “Who”, What Do We Say?

HH

Capacity

Group

Affinity

Group

Propensity

Group

Action

Existing Owner

5

5

5

“Love you,

we want a

deeper

relationship

Hotel Guest

1

3

4

“You like our

brand but

probably

can’t afford”

Non-Affiliated HH

5

1

5

“Marriage

material, let’s

start dating”


What Would MVCI Do Differently

Based on Economic Insight?

Challenges:

– Can we better select HHs for Tour solicitation for

higher close rates?

– Could we be getting more qualified referrals from

our members?

– Are the best HHs accepting our invitation to Tour?

– Can we more efficiently prioritize which Tour-No-

Sale HHs to pursue?


Spending Capacity Finds

“Misfits & Orphans”

HH Income

(Former)

Spending Capacity

(New)

Net Effect

Old Standard

HH Income > $75K

Qualified Prospects

DSI 551+

Unqualified Prospects

DSI


We’re Touring A Disproportionate

Number of Low-Likelihood Buyers

Distribution Of Owners and Tour Prospects

% of Each Group

1-100 101-

200

201-

300

301-

400

401-

500

501-

600

601-

700

701-

800

801-

900

901-

1000

DSI Bands

Owners

Tour Prospects


Economic Insight Tells Us Which Non-

Buyers “Aren’t About the Money”

Conversion Rate By Tour Frequency

Conversion Rate

1-50

51-100

101-150

151-200

201-250

251-300

301-350

351-400

401-450

451-500

501-550

551-600

601-650

651-700

701-750

751-800

801-850

851-900

901-950

951-1000

DSI Band

• Conversions from Tours are dramatically higher (2x rate) at higher

vs. lower DSI scores

• Can guide sales exec follow-up to pursue “the money”


Summary

• In the rapidly growing timeshare industry ‘he

who finds more paying customers wins’

• Filling our pipeline with better qualified leads

will help us achieve aggressive sales & revenue

growth goals

• Understanding HH-level econographics gives us

the information needed to truly invest in different

prospects and customers differently

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