“Way back in 2008”, the Vice President of our analytics group spoke at a corporate meeting about marketing strategies for 2014. He said “We were all continuously saying”, he continues, “it’s all good”. “Today, we no longer use the 2008 phrase, but we continuously compliment every action taken by anyone inside our companies no matter how insignificant. We see emails back and forth about how amazing everyone is and how hard we all work, then we sit in long budget meetings to talk about how we are not making our numbers”. He concluded.
How does that happen and who is to blame if anyone?
Is it marketing’s fault? Did sales mess it up for us? Was it the economy, more inventory on the market, price cutting by our competitors, or can we simply blame it on Obama’s new Affordable Care Act? The answer is nobody inside our company really knows. The reason we don’t know is because we spend little time analyzing failure and all of our time commending each other for a job well done. While we do not suggest stopping the flow of emails regarding a job well done, we also suggest investigation into the continuous crisis discounting and the number of incidences of these types of activities.
We created an Incidence Index to help guide our marketing and sales efforts. The index is a chart that details the number of times in one year that we have crisis discounting and track increases in these activities. We have noted a considerable increase in the use of crisis discounting or pricing over the last three-year period to the point where crisis discounting has become part of daily life at hotels and resorts.
The Valorem team tries to understand why bad things happen and how often they happen. Is it normal to have crisis discounts across Online Travel Agents 24-48 hours prior? If so, should the meeting atmosphere about not making our numbers really be a nice meeting about what has become standard operating procedure? If sales are down, then automatically open the flood gates by reducing prices. Cant we put this into our Pallisades program and let it run without holding continuous meetings to scold sales for their inability to make good on their plans?
What we have noticed over the last five years is that while marketing creates those beautiful and amazing marketing plans, which we all praise, with amazing strategies to grow and increase revenue embedded, the effectiveness of the plan is low.
In our Valorem Group offices we have two camps of thought, one that believes that it is the process of writing a marketing plan and the other that believes that it is the use of a plan in a flexible age. The first camp simply states that little time has been put into thinking about the best plan while the latter is concerned with the inflexibility of the plan.
While we wont bore you with a discussion about these two, we do want to go back to measuring failure as a path to success. We have measured the incidences of price decreases within 24-48 hours across a three-year period and have noted considerable increases in most of the companies analyzed [see, we used the word increases which is a positive word, to refer to the rate of failure, which we think you should send us a kudos for].
So to get down to the grain of it all, we take existing marketing plans with elaborate calendars and match it to the incidences of price decreases in a crisis mode. We analyze the cost of the marketing action, whether advertising, email campaigns, etc., and then identify those marketing practices which have had no impact on reducing the number of crisis events. We identify the weakness in the marketing plan and come up with solutions that will work. That doesn’t mean throwing solutions that have always been thrown at a problem in the past, it means giving some long and serious thought to activities and results based on your company’s Incidence Index. If you set as a goal to reduce the incidence of crisis discounting, you would be better off than setting the goal to increase revenue.
We then help marketing gurus get their groove back on by opening the doors to a broader look at the market and competitive set. The competitive strategy of price cutting is standard and we should plan on it, not use it as the excuse after plans fail. We need to prevent and establish countermeasures without competing on a lower price point. We stop and consider increased room inventory counts in our areas, competitive new market entry strategies, new airline lift in or away from your area and other market components that will always affect your plan, but are considered with less frequency.
We suggest you start your own incidence index at your property and gauge the effectiveness of your planning. If you want some ideas, reach out to us at any time. If you would like to see more tips about marketing, please click here https://valoremgroup.com/tips-news/
How to sell outbound group meeting and incentive travel
Improving your group and incentive sales
Improving your group and incentive sales to the U.S. Meeting Planner and Incentive Houses is as simple as it is difficult. We have been the liaison between international hotels, their sales teams, and the U.S. Planner for nearly one quarter of a century and understand the gap between cultures, expectations and deliverables that impede effective sales efforts to outbound group and incentive programs from the United States.
Most sales people are always in continuous touch with their accounts, but we ask why then do they lose the business? How much business are you losing without even being aware of the reasons why?
Here are a few pointers that may help you and your international hotel or resort.
Acknowledge receipt of all Request For Proposals [RFPs].
I can’t tell you how many times meeting planners tell me that they don’t know if they should even expect a response because the hotel they sent the RFP to never even acknowledges the receipt of their RFP.
It is very commonplace for hotels that CANNOT accommodate the group because of date availability, size of group, lack of meeting space or inadequate function space to simply not respond to the Planner at all. Not even a “courtesy email” thanking the planner for thinking of them and advising them that they cannot accommodate their request. Communication, courtesy & hospitality should always be part of the sales process even if the hotel/resort cannot accept the group.
2. Late responses.
Let us start by saying that while a great many hotels already respond to RFPs in a timely manner, many do not and the General Management is unaware of this occurrence. While we understand that hotel and resort sales people are very busy traveling, in long meetings, taking care of customer requests as well as the needs of General Managers and other Executive Committee members, they must understand that the U.S. meeting planner is pressed by a variety of other requirements, including time. A standard response is a maximum of 48 hours and of course after acknowledging the receipt of the planner’s proposal.
3. Incomplete & Unformatted RFP’s.
In many cases sending an incomplete response in many cases is even worse than not responding. It takes Planners time to read the partial replies only to have to make further requests that more often than not, go unanswered. If a Meeting Planner requests information about meeting space specs, banquet menus, and for the hotel to complete a specific RFP questionnaire, the least the Sales Manager MUST do is to provide the full and accurate information, fill in the questionnaire, and return it within the specified 48 hours! Planners will not consider a hotel’s standard proposal formats if they have sent you a specific questionnaire and your hotel will not be presented to their client. Many planners use specialty software that scans these FORM responses and sorts them for simple and quick presentation to their clients. Sales personnel may think they are providing the Planners with at least some of the details needed, yet they are not.
4. Language and customs.
While many international hotels have been hiring English-speaking sales managers, there remain many idiosyncrasies and literal translations from Spanish, Portuguese, French or other languages that simply do not make sense in English. It is very important that each hotel have a native English-speaking professional read through their current proposal templates for accuracy and clarity so that Meeting Planners do not have to decipher the offer being presented, often requesting clarification. Planners are not ignorant, they are just confused by unclear English templates and different customs in countries where they may not be as well-versed as in the US.
Since the downturn in the economy, the ability for companies to plan and budget for a meeting or conference is left to a late priority. The decisions on the venue are based on a series of factors:
Convenience for attendees
5. Room to negotiate.
It is a common misconception among international hotels that there is always room to negotiate. Many times hotels start off quoting rates that are way higher than the client’s stated budget, and/or they do not provide most of the concessions/value added items requested by the planners. Later, upon follow up with the planner, they find out their property has been ruled out because of some of the above reasons, when it is already too late! Please, if your proposal is your “best offer”, by all means go ahead and present it, but if you know that you have room to negotiate, please be forthright and extend what you can offer from the beginning…don’t wait until it is too late and your property has been already ruled out to react!
Make sure your proposals, contracts and documents explain succinctly what you can and cannot offer. We recently had a client contract with a property, plan all meals, activities, work on BEO’s, and two days before group check in found out that the hotel DID NOT accept credit cards for master account payments, only payments via wire transfer or personal/company checks. Can you imagine? To say the least, this situation certainly put the meeting planner in a pickle! All because within the contract, it never stated that ONLY wire transfers or checks were accepted and that credit cards were not.
This article was written by Michelle Anseeuw- MBA, CMP, CHSP, Vice President Global Sales, Valorem Group.