Meeting Planner Perspective, November 2007

"The Trust Factor", written by Brian Doty

In the meetings industry, we are facing unprecedented budget restrictions.  As organizations begin to comply with the Sarbanes-Oxley Law and are defining “reasonable costs,” planners are watching their meeting budgets get slashed across the board.  This has already occurred in pharmaceutical meetings with PhRMA Guidelines compliance.  Additionally, this pressure is further compounded by stockholders pushing for higher dividends and company executives reviewing every expense to maximize profit.

As you can attest in the hospitality industry, operating costs are rising as well.  Fuel prices and unseasonable freezes throughout the produce farming regions have caused food prices to rise.  The new minimum wage is already increasing wages.  Medical insurance is increasing at record breaking rates each year.  Hoteliers are facing the same pressures from their ownership to maximize profit and minimize expenses. 

The pressures mounting on both suppliers and planners are widening the negotiations gap.  Now, more than ever, is the time for meeting planners and meeting venues to partner to identify solutions that meet the needs of all.  It is time to break the molds of traditional negotiating and find a course that leads to open dialog and trust. 

Let’s start by taking a look at the current request for proposal (RFP) process.  Typically, planners will create the RFP in a wish list format usually asking for more than is needed and rarely revealing any budget figures.  Suppliers create the proposal after much deliberation with the revenue team to determine the best avenue for profit maximization.  You’ve seen these meetings, the sales manager pitches the business and the revenue manager refuses to budge on room rate.  The food and beverage director refuses to budge on revenue minimums and meeting room rental.  So the sales manager, who is driven by making the sale, asks for some negotiating room.  The higher rates are included in the proposal and the sales manager can reduce if need be to secure the business. 

Imagine a world where the planner creates an RFP that identifies exactly what is needed to conduct the meeting.  There are no pads in the room blocks, or space needs and the budget is clearly outlined in the RFP.  The RFP becomes a true picture of the meeting specifications.  There are no hidden negotiation points, just the facts.  Now imagine taking this RFP to the revenue team.  The revenue team responds to the RFP with either a proposal that meets the terms in the RFP or a simple, no thank you, we cannot meet your current needs for this time at our property and identifies other dates or patterns where these terms can be met.

I am sure at this point you are thinking that the process is not that simple.  But this scenario can become the norm if both sides develop trust and maintain an open dialog.  For example, a planner has a tight food and beverage budget for breakfast and lunch and the menus the planner wants to offer the attendees are higher than the budget.  Typically in this scenario, the planner is forced to identify lesser menus and feels that he or she has cheapened the program because they cannot offer menus the attendees have experienced at other meetings.  If the planner opens an honest dialog with the venue and shares these concerns, then the venue contact can discuss alternatives with the venue food and beverage team.  The venue contact needs to lead a discussion with the food and beverage team that creates an open atmosphere all options can be discussed.

By opening an honest dialog the planner is placing trust in the venue contact.  It is crucial at this point for the venue contact to identify truly workable solutions in order to maintain that trust.

Once trust is developed between both parties, open and honest dialog will follow.  When this becomes the norm, winning solutions for all parties involved are created.  When all parties benefit from a solution, the desire to continue the relationship becomes very strong which only maximizes benefit in the form of profits and savings.