The pendulum is not likely to swing back from the seller’s market in the near future, at least according to CWT Meetings & Events’ 2016 Meetings and Events Forecast. The study predicts a 4.3 percent increase in lodging costs next year in North America, along with higher F&B prices and less flexible hotel attrition and cancellation policies, particularly in high-demand markets. The same study suggests strategies planners can use to cope with this challenge, the first one being “consolidate for control and cost savings” via a strategic meetings management program (SMMP).
Companies that have SMMPs in place are better positioned, even in this seller’s market, to realize savings and more favorable contract terms since they know precisely their meetings history with hoteliers on a company-wide scale.
“If you don’t have an established SMMP with really strong relationships in a seller’s market, how are you going to trust that you’re getting really good deals in a buyer’s market?” — Carolyn Pund, CMP, CMM
“It’s a challenging market now, and having a vision of what meetings we are doing year over year enables me to take multiple meetings to a supplier table and be able to negotiate better dates, rates and terms,” notes Kathy Hastings, CMP, CMM, senior manager events with technology solutions company Teradata, based in Waxhaw, North Carolina. The idea is echoed by third-party planner Deborah Borak, CDS, CMM, SMMC, director of global accounts with ConferenceDirect: “Being able to go back to the same hotels we’ve used in the past and show what we’ve booked with them helps immensely.”
Thus, the slogan “Knowledge is power” certainly describes the value of an SMMP. Especially in today’s market conditions, planners need full knowledge of their company’s meetings activity to optimize negotiating power with suppliers. They need data that is on par with the kind of information travel departments have on transient business travel, and in fact, the combination of both data sets further improves leverage.
Strategic meetings management at Cisco Systems includes that best practice, notes Carolyn Pund, CMP, CMM, global events, strategic meetings management. “Cisco has major chain partnerships for their transients, and we piggyback on that volume to get the best value for Cisco meetings and events.”
Of course, SMM is not merely about knowing what the pattern of supplier use has been, but actually identifying and driving business to preferred suppliers in order to forge and maintain partnerships. Those vendors will usually be happy to partner with the client’s SMMP “because they know that the next program that’s going to come along is going to be steered to them because of the partnership,” Pund explains.
And such partnerships are valuable to planners not only in a seller’s market. “Anybody who has been around in business (long enough) understands that everything is cyclical,” she says. “We’re in a seller’s market now, and in eight months we could be in a buyer’s market,” she says. “But if you don’t have an established SMMP with really strong relationships in a seller’s market, how are you going to trust that you’re getting really good deals in a buyer’s market? So I think it needs to be equally strong in a buyer’s market; the relationship and the business is based on trust either way. And the SMMP should be in it for the long haul.”
The extreme of a buyer’s market took place during the recession when companies were canceling meetings, and during that time, Cisco’s SMMP was valuable in softening the blow of cancellation fees, Pund feels. “We still paid a lot, but not to the point of what we would have paid had we not had those relationships, because as soon as that business came back, it went directly to those partners where we had had cancellations.”
Negotiating leverage and strong supplier partnerships are among the results of a successful SMMP, and they are motivations to engage in the significant amount of data collection needed to start a program. A company first needs to get a handle on the numbers and types of meetings being held across the organization, and the spend in the different categories. For Teradata, it started with a request for the former information: “They wanted one global calendar capturing all the meetings and trade shows,” Hastings recalls. That led to the purchase of an enterprise software solution that included that function, and the SMM journey began from there.
For Cisco, in the early days of the SMM program, there were requests for company-wide meetings spend data, Pund relates. The first step to capturing meeting spend was consolidating the related general ledger meeting codes. “Over a period of about a year we worked with the finance and other stakeholder teams to come up with very tightly defined general ledgers codes to categorize all related spend. So if you were opening a PO, any type of expense that had to do with a meeting or an event, it would align to a meetings GL code. It’s since expanded to about 12 GL codes.” The GLs correspond to all the different types of meetings, from trade shows to sales conferences, advisory boards and much more. “We also established a Global Meetings portal driven by a Global Meetings & Events Policy that requires everyone to register their meetings in the portal, which for a company the size of Cisco is a pretty daunting task,” says Pund. Seven years later, “I would say that we are in a better place than we ever have been at close to 85 percent compliance. SMM is a long journey, especially with a multinational operation.”
A major challenge with any company-wide initiative is getting buy-in from the many stakeholders. Helpful in that regard is to have a high-level “champion” of the SMMP, a “leadership voice,” says Hastings. But given the length of time it takes to get company-wide acceptance of the program and education in its protocols, a planner should not depend on the same champion staying the course throughout. “We had many roadblocks in our journey. Our champion changed jobs, and it was difficult to find a new champion,” Hastings relates.
Thus, anyone involved in backing the SMMP should be capable of making a case for its benefits to various stakeholders. Victoria Johnson, CMP, CMM, global manager, strategic meetings management with safety science company Underwriters Laboratories LLC, currently works with Borak on the sourcing piece of the company’s SMMP. But her role in founding the program goes back to 2006 when she earned her CMM, and designed the program toward completion of the degree. In her view, it’s key to show the distinct value to each different stakeholder in order to get buy-in. “We have a lead-with-carrot vs. beat-with-stick culture, so you have to show people the benefit of why you would use this (program), the ‘what’s in it for me,’ ” she explains.
For example, the legal department should understand the risk mitigation features of the program, with its control over who reviews and signs supplier contracts. The C suite, and particularly the CFO and procurement, should be made aware of the cost savings potential through strategic supplier relationships. Buy-in from leadership also can be furthered by showing them how SMM has benefited similar companies.
“We looked at companies that were even larger than our company, and we were very interested in companies who are in the technology arena, whose portfolio of meetings and trade shows is similar to ours,” says Hastings. “I knew that some of those names would draw attention to our leadership, and mostly they were companies who had mature SMMPs in place.”
And as data become available from expense tracking as well as the cost savings through preferred supplier relationships, the C suite can be further “reassured” as to the SMMP’s ROI. “I believe that data reporting that we’ve done in the last 60 days has really opened eyes, and now leadership is very eager for what the next steps are going to be,” says Hastings.
Cost avoidance also should be showcased — for example, where a cancellation penalty at a hotel has been avoided or ameliorated by a rebooking effected through the SMMP’s centralized oversight.
Buy-in from marketing and sales is achieved by focusing more on the improved customer relations and brand representation across meetings. For example, UL’s SMMP will enable an “understanding of what customers have we invited to which events,” Johnson says. “Business unit one might ask a client to go to their golf outing, and the client may say to them, ‘I’m not allowed to accept that.’ Well then along comes business unit two and says to the same client, ‘Hey, would you like to come to our golf outing?’ So it starts to look a little silly when we have no central place for understanding (customer-facing meeting and event data).”
The quality of the meeting experience and branding also can be kept consistent when there is control over who does the planning. “Each and every meeting may look different if we’ve got different planners,” says Johnson, “and furthermore the planners are not professional planners but employees who lack the expertise a professional planner has and do it as a secondary part of their primary role, which we call ad hoc planners.”
Preventing this is clearly of interest to marketing representatives as well as C-level executives who are concerned with the company’s image. In fact, the focus on brand delivery through meetings can be more important to “selling” the concept of SMM than the cost-tracking and savings benefit, says Pund, whose team sits within Cisco’s global marketing organization. The corporate brand and values are not only represented to clients at external events, but also to supplier partners.
“Everything about an event in part represents your brand: The way that you source, contract, show up onsite, treat the convention staff, reconcile your bill and pay them,” she says. Ensuring that valuable supplier partnerships are maintained is not just about identifying them as “preferred” and bringing business to them, but also about how the business is conducted. An SMMP helps to preserve that integrity across all of a company’s meetings by having protocols in place.
Apart from upper management, legal, procurement and marketing, those on the front line of meeting planning clearly must also be on board with the program and its development. That process “includes continual communication, because people forget (the protocols),” Johnson says. “So I’ve done a lot of lunch-and-learns.”
They also may lack the time to do the reporting on each event they plan as dictated by the SMMP, and this is an issue that should also be addressed. “I think the biggest (problem) is that companies don’t take the time to go back in and actually put in what they spend at every meeting, including F&B, AV, etc.,” Borak observes. Resolving such issues needs to be motivated by re-emphasizing the value of the program, the reason these planners bought into it initially. At the lunch-and-learns, for example, Johnson stresses “what’s in it for you, making it relevant to the executive assistants, because they plan a lot of meetings themselves. I ‘sell’ them on the fact that by coming to this process you can report to your boss that you saved a certain amount of money and show your value.”
It’s also important to convey to these planners that they are not relinquishing control over meetings under the SMMP, but rather aligning to protocols of meeting registration, approval, sourcing, reporting and so on.
“Many times the planners don’t want to give away what they’re doing; they think somebody is going to come in and take over and they won’t be needed anymore, and that’s not the case whatsoever,” says Borak.
In certain ways, the SMMP makes their planning work easier. For example, many hotels now want advance deposits in addition to setting up direct billing, and one of the protocols of the SMMP can be that all planners are provided with the appropriate credit forms, Borak suggests.
Internal planners and meeting managers also are important to retain under an SMMP as they are the best advocates for its success and the company overall, Pund maintains. Cisco’s global SMMP, she notes, is directly managed by Cisco employees, no matter the location. “Corporate America respects vendors and consultants, but at the end of the day, they’re not coming from a place of ‘we’re all stakeholders together and doing this because it’s the right thing for our company,’ ” she says. A reason why some SMMPs are struggling, she holds, is that they are being overseen entirely by third parties, as opposed to company employees. Just as a program needs an internal “champion” to get it off the ground, it arguably needs company representatives doing the “maintenance work”: driving adoption, educating on policy compliance, having stakeholder meetings with new acquisitions and so forth.
External partners, including hoteliers, DMCs, transportation and AV companies, also need to be on the same page with regard to the SMMP. “Your external partners are the people who are ‘policing’ and helping you with your policy for all the people that think that the policies don’t apply to them,” says Pund. For example, “when somebody (from the company) calls the hotel and says, ‘I want to do a meeting,’ that hotel partner’s first comment would be, ‘Great, do you know what your Cisco url is for the meetings portal so you can register your meeting and get a meeting ID? Then we can get your program contracted.’ ”
Cisco also conducts biannual reviews with its external partners. “We collect information about how our programs operate and what our volumes look like, how many times RFPs are denied, etc., and we provide feedback as to their hotel performance on our program, what planners liked or didn’t like, and how they can improve in operations,” Pund relates. In turn, the suppliers report on any contracting issues, use of rebookings based on cancellations and so on. That deep level of communication with suppliers comes with their partnership in the company’s SMMP, as opposed to their merely being used for one-off meetings.
While an SMMP may begin with a “champion,” a mature program should not depend on any one catalyst, or even just a few. It should maintain itself through the best practices of all the internal stakeholders and external partners.
“My goal is for the business practices of SMM to become part of the DNA of how Cisco does their meetings and events,” says Pund, “so that if I’m not in the driver’s place in six months everything doesn’t fall apart. The infrastructure needs to be set in place between finance, governance, travel, event marketing and other parties, so that it’s not dependent on a name or personality anymore.”
Such a well-grounded SMMP will preserve the efficiency of a company’s meetings operations through staff changes, new acquisitions and any pendulum swings of the market. C&IT