What is a “member update” really?

The “Member Update” is a key strategy of the declarant (DRI) to sell more points. The criteria for attending is that both decision makers must participate (if there are co-members) because they are looking to make a sale during the update (and people do not usually make a high-priced purchase decision without their partner). So although it is positioned as an update, the objective is to sell more points.

Why call it a “member update?” It is possible (although not confirmed) that a portion of the cost of the DRI (was Intrawest) sales team may be passed on to members, in the form of the annual service fee. By positioning the talk as a way to help members use their membership, DRI may be claiming a portion of the conversation as service to members (i.e. member services cost). ….

Although the Intrawest sales team appeared to look for balance during the update, by providing tricks on using the membership first, and then following with a relatively soft sales pitch, DRI has shown evidence of a different strategy (i.e. a hard sell). They sometimes use tactics such as humiliation to push people into a sale or create a false member-problem, whereby the member starts believing that their only way out is to buy more points. Whatever the member pain point appears to be, DRI will tap into it as part of their sales strategy. DRI will also try to encourage upgrades into the new EE tiers (EE 2.0) by showing how the current “basic” membership is losing its value (without directly saying so).

The above comments stem from reading DRI’s quarterly and annual reports, and analyst conference calls. DRI makes it very clear that their core business is in the selling and financing of points (80% of their revenue) and that tiering is their strategy to push current members to upgrade their points bucket. This is why DRI created the new EE tiers and why they put a condition to joining those 400 point and 700 point tiers on buying new points post May 1, 2016.

DRI has also dramatically increased the posted price per point to over $300US to generate a higher perceived value of our club, potentially (in part) for US members in their other DRI collections, who they are likely pitching points to (e.g. getting DRI members in the US Collection, for example, to buy Embarc points). And as they have indicated, they expect that 50% of point revenue will come from the current members. Which means that each and every “member update” is expecting to end with a sale.

How is this different than what Intrawest did? Theoretically, it is no different. But practically, it is very different. Intrawest sales people had a soft sell that aligned with the club’s culture and reflected their firm’s relatively small interest in the timeshare business; Intrawest ran their management/declarant role of the club relatively lightly, and tried to sell their interests at the turn of the century. They were not very good at exploiting the membership and focused more on service.

DRI is in the timeshare business. And they make it clear that the timeshare member is a “wallet” to them. So then, you might ask, what is the job of Member Services compared to these Member Updates? Well, if Member Services gave members all of the answers to their membership, a Member Update would not be required, would it? The member would learn all they ever wanted to know from the website, by calling member services, etc…But that doesn’t happen.

There is always a little mystery to how the membership works and how members might be able to maximize it. Why? So that members attend the “Member Update.” And why only on site while you are on holiday? Because people’s spending habits while on holiday break their standard norms and values. Individuals tend to spend differently on holiday because they are outside of a normal routines. Consumers buy things that maybe they don’t really need, or even regret, while caught up in that euphoric “life is perfect” situation. And so the best time to capture a member to buy more points is while they are sitting poolside.

So should you go? If you do, you will benefit by receiving some sort of gift, so balancing the value of that gift with the value of your time is a worthwhile effort. From DRI’s perspective, they likely track their sales effectiveness, and Apollo is likely watching those numbers, so participating in a sales effort without actually buying will impact those statistics in a way that may influence future decisions.