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From Lead to Loyalty: A Vacation Owner s Customer Journey

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From Lead to Loyalty:

A Vacation Owner’s

Customer Journey

Executive Summary

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It’s not enough for vacation ownership companies to do well with some or even

most of the interactions with owners and prospective owners. Customers want

better than that, and fully satisfying them at all times to build lasting loyalty will

take a new strategic focus on their experience and communications.

The path to better owner experience and communications begins by mapping and tracking the customer journey so it can be adapted, leveraged and improved to meet these higher expectations. In turn, understanding and optimizing the owner journey is the stepping stone to new levels of customer engagement and subsequent vacation ownership company revenue derived through upgrades and referrals. Fifty-nine percent of timeshare sales revenue comes from current owners,

according to the 2017 AIF State of the Vacation Timeshare Industry prepared by E&Y, and they spend more, too: The value of a first-time buyer transaction is $17,803 versus $21,577 for an existing owner, according to the 2017 AIF Financial Performance survey conducted by Deloitte.

It’s a similar situation when it comes to losing customers, according to the financial performance study. Rescission rates, or the percent of purchases cancelled during the allowable period following the sale, usually 5 to 7 days, are more than twice as high for first-time buyers than existing owners: 22.9% versus 9.3%.

In short, It’s very expensive to create a new vacation ownership customer. So once a prospect becomes an owner, it’s critical that communications and interactions are organized and coordinated for a better overall experience. Doing so fuels future referrals and upgrade sales, while lowering blended sales/marketing costs. Engaging owners with a seamless and positive customer journey also reduces loan and maintenance fee delinquencies, making the organization more profitable.

From Lead to Loyalty: A Vacation Owner’s

Customer Journey

by Bryan TenBroek

New owner

transaction value transaction valueExisting owner

AVERAGE TRANSACTION VALUE, 2015 & 2016, U.S., NEW OWNER & EXISTING OWNER

$30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0

Source: 2017 AIF Financial Performance

$17,163 $17,803

$20,879 $21,577

2015 2016

SALES FROM NEW OWNERS

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What’s a Customer Journey?

Customer journey is the increasingly popular term used to describe the total of experiences that customers go through when interacting with a company or brand. These experiences are often called touchpoints, marking specific transactions between a company and the owner or prospective owner.

Touchpoints occur in a variety of channels, functions and time periods. They include an owner or prospect reading a marketing brochure, visiting a web site, using an app, receiving an HOA meeting notice, casting a vote, and talking to a salesperson or owner services representative.

However, the customer journey demands that the sum of the experience is greater than its parts, or touchpoints. Customers of traditional hotels that get the journey right may be 61% more willing to recommend the experience than customers of hotels that merely focus on a few touchpoints, according to The CEO Guide to Customer Experience, a report by McKinsey. There’s no reason vacation ownership resorts cannot achieve a similar level of preference.

One important difference between a string of touchpoints and an effective owner journey is perspective: It must be seen through the eyes of the customer. Also, one size definitely does not fit all. Every step of the owner journey should be easy, enjoyable and targeted because interactions are based on a particular customer’s needs at the time. For example, first-time buyers exploring their first trip are looking for different interactions than seasoned owners seeking new and diverse vacation options or wanting to upgrade their ownership to allow more experiences or flexibility.

Mapping the journey helps identify owner pain points along the way and gives vacation ownership companies opportunities to reduce friction and increase engagement. When mapping, companies often find disconnects between how they are

structured to interact with customers and what needs to happen for an optimal customer journey.

Benefits of Focusing on the Owner Journey

Vacation ownership companies can reap sizeable gains from focusing on the customer journey as a strategic way to communicate.

Marketing Benefits

+ Creating a consistent brand experience from lead to loyalty + Improving owner satisfaction and

engagement

+ Cultivating loyal owners that refer their friends and family

+ Moving beyond loyalty to nurturing brand ambassadors

+ Establishing market leadership

Operating Benefits

+ Fueling revenue growth + Decreasing operating costs + Reducing operational complexity + Increasing collections and reducing

the cost to collect

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Defining the 3 Tracks of the Vacation Ownership Journey

Despite clear overlap and opportunities for synergy, the owner journey currently involves many different departments or business units of the same vacation ownership company, often operating independently in silos. This is a big stumbling block to improving connections.

The industry generally operates in three silos, or tracks. First, the sales and marketing track, then the vacation track that starts with reservations or exchange and ends with the guest experience while on vacation. The third silo is the financial/administrative track, focusing on mortgage financing, annual

maintenance fees and HOA governance. More often than not, each track operates its own system, resulting in multiple, possibly conflicting communications with owners.

While the term journey suggests a series of sequential steps, there often is no final destination, unless you want one-time customers. For vacation ownership, and many other industries for that matter, the journey is on a loop, with owners repeating transactions and revisiting touchpoints. There also are one-off interactions, such as the need to make a last-minute cancellation, or customers that fall into collections and later become current. And in some cases, the journey must end with owners that enter a life stage that no longer is

compatible with owning their vacation for a lifetime, in which case viable exit paths are emerging. While the final journey map needs to follow a comprehensive path, it’s useful to start by identifying the touchpoints in three main tracks.

If each department is operating within its own silo, the company is likely not delivering the optimal owner experience. While individual touchpoints may be great, that does not mean the experience as a whole is. To change that, organizations should first map the entire customer journey, then execute a strategic reorganization aligned directly with that journey. Doing so takes time, but the reward is worth it.

Starting with Owner Communications

To begin getting in sync with the customer journey to build momentum for this mindset and approach at your organization, secure some early wins so employees and owners can see and feel the difference. Owner

1 2 3

There’s initial and ongoing sales and marketing that involves outreach, sales process, purchase, contracting,

referrals and upgrades.

The vacation aspects of the journey can last for months every year.

Owners plan, book, prepare, pre-check, arrive, experience their

vacation, check out and share through comment cards and with

photos through social media.

The financial/administrative part of ownership is continuous, with monthly mortgage payments, annual assessments and the homeowners’ governance and

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communications is a critical component of the strategy, and a great place to start because it:

• Cuts across all three tracks.

• Represents important but currently uncoordinated touchpoints along the journey.

• Leverages easy-to-use communications management tools resulting in more consistent experiences and operational improvements.

With a customer communications management (CCM) system, you can put siloed tracks and functions on a single technology platform for developing and distributing new owner welcome kits, vacation confirmations, pre-arrival packages, owner invoices, notices and other documents. CCM simplifies and streamlines the entire communications process, and this can be done without a massive IT overhaul or upgrade.

Consider how complicated owner communications are now: Large, purpose-built, branded resorts, with an average of 130 units per property, dominate the industry. It’s likely that each unit represents about 70 ownership interests for a total of 9,100 individual owner families.

Let’s say you have, on average, 12 communications each year, excluding mortgage statements. You now have nearly 110,000 communications annually for just one resort! That’s a big number and many owner preferences to manage. It’s even more arduous if silos are operating at cross purposes.

A CCM system, on the other hand, facilitates collaboration, compliance and coordination. CCM technology lets you create a content library with text, logos, images and more, plus build document templates for all of your owner communications. You can leverage data tables to deliver highly personalized communications. If structured properly, a single data file will dynamically merge all elements to customize each letter, bill or other customer document for multi-channel delivery via print/ mail or email.

CASE STUDY

How a Vacation Ownership Leader Harvested Benefits of Focusing on Customer Journey

Challenge

When it came to communications across hundreds of properties, a large branded vacation ownership company was operating within a silo mentality. It had too many departments working independently on owner communications, creating a fractured workflow process. Five departments used different mail/ print vendors at a variety of price points. Proofing materials and getting appropriate approvals was a manual, labor-intensive, and often duplicative process. There were reporting issues, no centralized archive of prior communications, no built-in accountability and no process for getting electronic opt-in from owners to move to money-saving digital communications.

Solution

The solution included a three-part strategy. First, the company identified all of the owner touchpoints and mapped the end-to-end

communications process for the complete customer journey. Then, it used CCM technology to introduce a centralized information workflow process to focus on these customer interactions. This technology organized the information and broke down the siloed approach to provide visibility, empowerment, consistency and accountability across departments.

Results

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Owners benefit from consistent messaging and coordinated outreach, removing potential conflicting, redundant or irrelevant communications and other interactions that can sour the customer experience. At the same time, CCM technology gives vacation ownership companies the ability to track results, such as email open rates, to pinpoint ongoing opportunities for improving the journey. The right system makes it possible to track the owner journey over multiple properties and product types so resorts can quickly detect issues and improve the customer experience.

The Journey from Prospect to Owner

Communications related to this track are crucial because it sets the tone for how the customer feels about the decision to buy. This track also is important because marketing and sales costs typically consume more than 40% of sales revenue, an expensive proposition to create a new owner. Financing also comes into play, with 62.4% of customers financing their vacation purchase in 2016 for an average term of 119.8 months, according to the financial performance study referenced earlier.

So, it’s key to have a positive customer journey from the get-go given the considerable investment companies make during the sales and marketing process with four key touchpoints:

1. Tour Invitation 2. Sales Tour 3. Financing 4. Cancellation

Our Tips to Improve the Journey at this Stage

Don’t go quiet immediately after the owner makes the purchase. We know that companies have already invested considerable resources to get that customer, who now has five to seven days to cancel the sale. As a result, sales teams are hesitant to “rock the boat” or spend more money. But connecting with owners during the rescission period is now more important than ever: Use the first week to make the new owners feel good about the purchase. Jump right in and communicate to get them ready to make their first reservation.

Making the Most of Ownership

The vacation experience offers room for significant improvement in engaging and connecting with the customer. From booking the trip to pre-arrival to on-site activities, companies need to make sure the entire experience is outstanding. This requires anticipating needs and communicating options about meal reservations, pre-stocking groceries or booking tours.

PORTION OF NET ORIGINATED SALES THAT WERE FINANCED BY CONSUMERS, 2016, U.S.

2015 2016

Cash or cash-out within first 90 days 24.6% 22.1%

Cash down payment 17.2% 15.5%

Financed value 58.2% 62.4%

Total 100.0% 100.0%

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No one wants a vacation to be marred by either a lot of setup time or on-site disappointments. For example, if a customer is booking in high season and can’t get into the best restaurants or do certain activities

because they are full, the customer will have a disappointing experience. However, if a customer knew certain activities needed advance booking by receiving a heads-up text or email from the resort, then it’s smooth sailing and the customer has a much more satisfying vacation.

Our Tips to Eliminate Friction Points

Make sure you take advantage of pre-arrival check-in. In advance of arrival, resorts collect credit card info and arrival times to streamline the check-in process. It’s a crucial resort practice at vacation ownership properties because many people check in at the same time for the week. By doing pre-check, you eliminate long lines and let vacationers get to their rooms quickly – a win-win for all parties.

The Financial/Administrative Journey

This part of the customer journey can create many friction points because interactions here are about money and annual homeowner association elections. This part of the owner journey involves three major touchpoints:

1. Mortgage Payments 2. Annual Maintenance Fees 3. HOA Elections and Governance

Keep in mind that even billing statements can be an opportunity to improve customer engagement and create strong relationships. How? Start by including information that educates customers about related products and services including reservation availability or marketing offers. Vacation owners can see beautiful photos displaying options for their dream vacation. Billing statements also can be used to drive electronic delivery and payment opt-in. So, don’t let that prime real estate go to waste.

The best way to engage owners is to meet them where they are. Some want communications mailed while others prefer materials that arrive in their inbox. Some want both: For example, we’ve found that when it comes to HOA-related communications, many owners like to receive hard copies of election materials but prefer the convenience of online voting.

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Text messaging is another capability that owners are looking for – particularly for facility check-ins. Digital wallets, a secure way through a smartphone app to pay for goods and services and store documents like boarding passes and event tickets, are gaining in popularity. Digital wallets could be used during all stages of the ownership experience such as issuing mobile vacation confirmations, displaying virtual membership cards, sending push notifications, and delivering bills that include the ability to submit payments right on smartphones.

Adding choice and convenience in HOA election communications and voting could improve participation by delivering a better overall experience. There are applications, sometimes integrated within the CCM system, to quickly and easily customize election communications and the voting process to comply with the specific requirements of each resort property, such as weighting based on ownership and total number of owners.

Our Tips to Eliminate Friction Points Communications

Offer multiple channels for communications and payments of annual maintenance fees or monthly

mortgage statements to enhance engagement and satisfaction. Every time you communicate with an owner, offer an opt-in for digital delivery. Providing digital communications, including mobile-optimized electronic bill presentment and payments, is especially important for millennials or Gen X because younger owners like to do business on their phones.

Payments

Set up an option for monthly payment plans for maintenance fees rather than require a single installment payment due in December when budgets are tight due to holiday spending. Along the same lines, offer the ability to schedule payment reminders via email and text. You’ll reap the benefits of reducing defaults and bad debt and increasing owner satisfaction.

Elections

Add an electronic voting option for annual HOA elections and related communications to increase convenience and participation, making it easier to reach quorum. Vacation ownership companies will find it more convenient and efficient, too, with automatic versus manual ballot tabulation and other cost savings. An analysis of a large Nordis Technologies vacation ownership client showed a reduction in cost of nearly $3.00 per owner per year for every owner who converted to online voting and digital election-related communications.

Leveraging the Customer Journey

Once in place, a single platform for managing communications, payments and elections can do much more than optimize existing owner programs. It’s the essential tool for offering more choice and convenience, such as digital statements, mobile payments and online voting, that makes life easier for owners and improves the journey while boosting internal efficiency, creating more revenue, streamlining operations, and enhancing brand consistency.

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with these systems. Companies from Disney to Virgin Atlantic and Starbucks to Bank of America are raising the bar with omnichannel communications and experiences, according to digital agency Louder.Online. Incorporating omnichannel touchpoints involves developing and delivering personalized interactions and communications across channels—digital, print and agent-assisted. Companies using omnichannel capabilities tailor and target interactions, offers, and communications so they are more meaningful and useful to customer segments or even individuals. It’s a huge step beyond simply putting owner names at the top of a generic letter sent to all owners and calling it customized.

It’s this laser focus on delivering an outstanding customer experience that can make all the difference in the marketplace. It will attract and keep owners and confer competitive advantage.

Mapping and Fixing the Journey

Companies making the transition to a customer journey model will require some cultural shifts and technology investment. Technology can help remove the barriers between departments as well as map and manage the customer journey. But it takes more than tech, and we’ve developed suggestions to jumpstart your focus on the customer journey.

1. Create a cross-functional team with one person responsible for the owner experience.

• The governance role could be assumed by your chief experience officer, chief marketing officer, or someone in a senior role who has a view of the owner journey across the entire organization.

• The team should report directly to the CEO who can authorize resources and rearrange organizational priorities, if necessary, to quickly solve urgent paint points.

2. Map the entire journey from lead to loyalty. The owner journey doesn’t end at sending billing statements.

• Make sure you involve your owners in the process through surveys and focus groups.

• Create an organizational imperative and awareness of the importance of the owner journey along with a sense of shared accountability for getting it right.

• Journey mapping and monitoring are an ongoing process. Organizations are dynamic, and change will affect the owner experience. Re-evaluate the map and conduct research at regular intervals. Rotate new people onto the team for a fresh perspective.

3. Be brutally honest about pain points. Each group must be accountable for service highlights and lowlights.

4. Start with the biggest pain points.

• Pick your top pain point and focus on fixing this one area. Attempting to solve too many pain points at one time may lead to nothing getting solved, weak solutions, or delays. When you’re done solving your first pain point, move to another.

• If the solution to a big pain point is complex, apply project management and break it into smaller

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About the Author

Bryan TenBroek, Vice President, Business Development, joined Nordis Technologies in 2016 to manage

and grow the company’s already-large vacation ownership client base. He also is responsible for business development and market expansion in the healthcare and financial services markets. Before joining Nordis, Bryan spent more than 21 years with Interval International, a leading global provider of vacation ownership services. Bryan graduated from Northwestern University with a bachelor of science in political science. For more information, contact Bryan at btenbroek@nordistechnologies.com

ABOUT US

We’re changing the rules for handling communications and payments

Nordis Technologies is an innovator and leader in offering technology solutions to solve communications and payment challenges. Our Expresso® application for streamlining and managing communications and payments is a game-changer. What started out as a better way for us to manage production and printing for clients has grown into an important leap forward for transforming how businesses communicate and work.

Expresso® places full control of customer communications right at your fingertips. That’s why leading healthcare, financial services and hospitality companies rely on our technology to develop and disseminate their most critical communications and to manage online payments.

We don’t stop there, though. We deliver a complete solution, from planning and development to print and digital production and distribution from our two state-of-the art facilities in Coral Springs, Florida and Las Vegas, Nevada. Coupled with our

Expresso® platform, we offer a turnkey solution for all your print and digital communication needs.

Contact us today at (954) 323-5500, or email sales@nordistechnologies.com, to learn how our end-to-end technology and

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