Control Costs While Keeping the ValueDecember 13, 2019

Cut Without Compromise By
December 13, 2019

Control Costs While Keeping the Value

Cut Without Compromise
DEPOSITPHOTOS.COM

DEPOSITPHOTOS.COM

Any experienced meeting planner will tell you that no matter what budget you have to work with — large or modest — cutting costs is always top of mind. There’s a reason that cost cutting repeatedly comes up in education sessions across the meetings industry. It’s important, and planners are always devising creative ways to keep costs down while keeping the quality and value of the meeting experience up.

Darci M. Motta, CMP, CITE, CIS, senior conference manager with CSAA Insurance Group in Walnut Creek, California, says there are elements she always considers.

“The three primary meeting elements we look at in terms of cost savings are: destination/venue, food and beverage design and A/V design. We also educate our meeting hosts on how to be more budget-conscious in their meeting design decisions. For meetings that don’t require accommodations and wouldn’t leverage the added benefits of a hotel environment, we transition to conference centers or alternative meeting venues,” she says. “Transitioning small day meetings to conference centers maintains a reasonable per-person price, while still including F&B and basic A/V. For local day meetings, we also innovate to leverage alternative venues such as indoor basketball courts, libraries and community centers.”

“The three primary meeting elements we look at in terms of cost savings are: destination/venue, food and beverage design and A/V design.” Darci M. Motta

For multiday and larger programs, she says, “We carefully consider the added value of a hotel. If our group will be in meetings all day, why send them to a resort, and pay for resort and other ancillary fees that won’t benefit the attendees? Similarly, why host a meeting at a destination that experiences high transient business and charges accordingly, yet guests won’t be able to fully enjoy? Thoughtfully matching programs with the appropriate venue is an eye-opener for our hosts, and opens the door for further cost-saving opportunities.”

Motta says that once the appropriate destination/venue is identified, it’s time to communicate with CSMs and A/V partners to make smart F&B and A/V design choices. “Narrowing buffet choices, asking the chef for alternative protein options that may help reduce per-person pricing, eliminating bottled water and transitioning to large-format water stations are just a few of our tactics.”

Similarly, she says, “When reviewing A/V, we ask lots of questions to make sure we’re down to ‘need-to-haves’ and not paying for ‘nice-to-haves.’ A simple example includes bringing our own slideshow remote controls instead of renting. When compounded over multiple meetings, this small attention to detail can pay big expense-management dividends.”

The trick for planners is to be able to cut costs without compromising the equally important goal of creating successful, memorable meetings with value. Motta says it can be done.

“It’s a balance; a planner can be cost conscious and create memorable experiences. It’s really how we event professionals showcase our true worth and skill. Partnering with our hosts to identify the goals and objectives of their programs and guiding them through thoughtful choices to identify the location, environment and meeting design to best address their needs — without overspending — is where planners shine as strategic business partners.”

When it comes to devising creative cost-cutting tactics, planners are highly skilled. But, sometimes tried-and-true is the best approach, and planners have to know which tactic works best in which situation.

“It may not be the most creative tactic as many planners leverage this approach, but finding out what preceding in-house groups planned for meals and A/V, and mirroring these choices can generate significant savings without sacrificing the experience. In fact, this can be a way to get more for even less than was originally budgeted,” Motta notes.

Of course, negotiating is a critical skill for planners because negotiating can factor in multiple times before contracts are ever signed, particularly with vendors. “Be curious! Ask questions! Be transparent with your CSM about what portions of the buffet you absolutely need and what portions of the buffet you can compromise on,” Motta advises. “It can only help to keep your budget tight. Share your agenda, and clearly articulate the time your attendees will be in meetings, then ask for a corresponding cost reduction on resort fees. Share historical data on outlet usage if it’s impactful to help negotiate other program elements.”

F&B is a major budget expense, especially in this day and age of multiple allergies, preferences and dietary requirements necessary for cultural reasons.

“First and foremost,” Motta says, “you need to know your group. You need to know what the needs are so you’re not trying solve for a demand that doesn’t exist. Once you identify the actual needs of your group, engaging the chef in an honest and frank conversation can be very beneficial. We hosted a meeting with a theme of disruption and a scrappy, curious mindset. I approached the venue with the idea of reducing waste by showcasing ‘imperfect’ produce and using our F&B design to echo some of our atypical, thought-provoking themes.”

Motta says she ended up lowering her overall spend for that meeting by empowering the chef to design menus that maximized the food choices while showcasing to the attendees an example of thinking differently. “The food still looked wonderful and tasted delicious, and this unorthodox approach reinforced the theme for attendees in an unexpected way. Additionally, our behind-the-scenes cost savings further reinforced the value of taking an unexpected approach to events.”

When it comes to transportation, many planners are finding that costs can be cut by leveraging ride-share event codes. “Attendees want the flexibility to move how and when they want, and creating geo-fenced codes provides this flexibility, while ensuring the trips remain event-related,” Motta says. “This is also an important consideration when alcohol may be consumed. Ride-sharing event codes enable attendees to get home safely after a local event and are more cost effective than having to book a guest room.”

As for speakers, it’s always nice to imagine you can book that uber-popular celebrity — the one that comes with a hefty fee — but most expensive is not necessarily best. “It goes back to having a deep understanding of the goals and objectives of your program. You can often find a homegrown talent that provides a new and engaging perspective that won’t break the bank. You can also check out local TEDx events, colleges and speaker series. Engage your C-suite and execs; they may have a connection at another company and an opportunity for a speaker swap may present itself.”

If, however, a celebrity is important to the business or event, Motta advises following the mirroring approach suggested for menus and A/V. “By partnering with a speaker’s bureau to find out if there’s a desirable keynote speaker who’s already scheduled to be in town, it may be possible to negotiate the speaker’s longer stay for your event at a reduced fee.”

Jennifer C. Squeglia, CMP, owner of Warwick, Rhode Island-based RLC Events, puts contract negotiations at the top of the list for cost savings. “Cost savings for a program start here with concessions; the larger your piece of business, the more concessions you can negotiate.”

She has a long list of things that may be negotiable, including complimentary guest room and meeting room Wi-Fi, resort fees and discounts on spa, F&B and A/V — typically at least 10%.

There are also complimentary suite upgrades, discounted staff rooms and discounted or complimentary parking. Even though urban hotels may not be able to offer a deal on parking, Squeglia says it’s always worth asking. In addition, she suggests, “Ask for cumulative attrition and at least 20%, as well as one comp room per 40 utilized.”

Complimentary meeting space with an F&B minimum can also be a negotiated cost savings. “There are times when I’ll increase my F&B minimum if I know I can meet it to avoid room rental costs,” she notes.

When it comes to planning the menus, Squeglia works closely with hotels to customize menus where possible, especially if she has budget limitations. And like Motta, she advises transparency.

“The budget doesn’t have to necessarily be per meal,” she points out. “You can work with the hotel to say that the budget is $250 per person for all three meals and see what they come back with. If you work with the hotel closely, and are transparent with your budget parameters, they can partner with you to provide the best value for your budget.”

Décor also lends itself to cost savings. “It depends on the type of event you’re planning,” Squeglia says. “In some cases, the venue and/or hotels have very nice house linens and centerpieces that may help defray your décor expenses. If you’re hosting a smaller dinner as part of a big program, using a private dining room in one of the hotel’s restaurants may be less expensive and give your guests more food choices vs. having it in a smaller banquet room. Private dining rooms also typically need very little décor.”

Squeglia points out that there are many small personal touches a planner can bring to a program that don’t cost a lot of money. “I try to focus not only on the item, but also the experience and delivery. I planned a small incentive program and we did a ‘flip-flop’ interactive experience for opening night. We had branded flip-flops. Sizes were small, medium and large, so it was easy to guess sizes and have extras in a branded mesh bag, and people picked their size when they arrived at the party. We placed the flip-flops in a branded beach bag, which we personalized with a name tag. As guests were leaving, we gave them the bag to take back to their room so they had a beach bag and flip-flops to use for the rest of the weekend. The total cost was about $40 per couple. People loved it and it wasn’t cost prohibitive.”

Like Motta, Squeglia says that one of her best cost-cutting tactics isn’t necessarily creative, but it’s effective. “This may sound obvious, but I think the key to lowering costs is to pay attention to every detail on price, don’t be afraid to question a cost or fee and ask for discounts. I also think being transparent about your budget expectations from the beginning is very helpful for both sides of the partnership, supplier and planner.”

Transparency, in fact, comes into play throughout the planning process, as does communicating with respect. “It’s a partnership,” Squeglia emphasizes. “It’s impossible for a planner to be successful without our hospitality colleagues, including DMCs, hotels, speaker bureaus and so on. A collaborative approach will always benefit you in all aspects, including managing costs.”

Planning well ahead of time will also help. “It’s so important to plan as much as you can in advance and anticipate situations as much as possible,” Squeglia says. “When you have a lot of last-minute requests, that’s when costs start adding up and you put yourself in a position that you have no choice but to pay the expense.”

Squeglia also believes ride sharing is a good way to save on transportation costs. “I worked with a client on a large-scale broker forum. The total guest count was 350; 250 brokers and 100 internal employees. In planning the round-trip airport transfer, we arranged sedan service for the top company executives and brokers. For the internal employees, we set up a corporate account with Uber and it was a significant savings.”

What happens when a planner really feels a larger budget is important? Is asking a client or CEO an option? That depends. “Your argument for a larger budget typically directly aligns with the goals and objectives of the meeting,” Squeglia says. “If you can show the value of the additional expense and how it will enhance the outcome of the program, most of the time it will get approved.”

Most planners are in agreement when it comes to the top ways to cut costs without impacting quality. Like the planners above, one CMP and an FICP board member names A/V, meeting-room rentals and F&B among the areas to negotiate, and suggests that sustainability and cost savings align with choices such as eliminating bottled water and ‘going green’ with water stations.

“Meeting room rentals are generally negotiable with an F&B minimum and A/V is negotiable whether with the in-house provider or a third-party provider,” he says. “Food and beverage savings are possible if you’re agreeable to some flexibility in your menu selections — possibly by offering to overlap food requirements with another group or allowing the chef to make suggestions based on a certain price point”

In addition, he says, being flexible with dates can be a good way to save. “You’re often able to get lower rates if you have some flexibility around pattern or the ability to shift dates to fill a hole. Sometimes you may be able to negotiate additional concessions as well.”

As for keeping costs down while maintaining quality, he says, “I think planners just have to think a little bit differently and not get stuck in the ‘that’s how we’ve always done it’ rut. By doing many of the things mentioned above, they can still have a very successful program while reducing costs.”

As an example of thinking a little differently, he cites an upcoming event. “We’re doing a CSR activity at the event and our CR department is going to pay a portion of the expense because the activity ties in with their mission. It’s not a savings to the company but it’s allocating the expense across multiple cost centers so the impact to the meeting budget is not negative.”

Another creative tactic he used is related to an incentive dinner. “We gave each attendee a stipend to enjoy dinner at their leisure. It gave the attendees the freedom to customize what they were going to do, and it saved on décor and entertainment expenses. We provided a concierge-style service to assist in making arrangements as well as transportation to a central area in the city.”

Another dining tactic: “When it comes to things like food stations, we guarantee based upon a number that’s lower than the full head count. Not every attendee is going to eat from every station, so it’s pretty safe to provide lower numbers on things like a crudité, seafood station; etc.”

Not surprisingly, he emphasizes that planning ahead is almost always best. “We plan far ahead for our incentive programs, more for availability than for cost savings, although planning further ahead can certainly have benefits from a cost perspective as well. Hotels are looking to build a base of groups and then layer in their transient business, so there are benefits to being early in the booking window. Often times with smaller groups, however, hotels won’t take the business too far in advance as they don’t want to risk having to turn away a more profitable piece of business. In these cases, it’s sometimes more financially beneficial to book shorter term.”

Echoing the others, he notes that providing ride sharing is a good alternative to traditional group transportation. “For some of our internal meetings, we encourage the use of ride-share services. For others, we group arrivals together within a certain ‘window’ of time that we feel is reasonable, based on the location that they’re flying into. And utilization of airport properties helps eliminate the need for ground transportation for those meetings where easy in/out access is desired.”

Which speaker to choose is relative to the goals of the meeting, but he says there are some really great speakers who come at a lower price point.

“You sometimes have to pay a bit more if you’re looking for someone who has name recognition/cachet; however, even those higher-priced speaker fees are also negotiable. If you’re able to find speakers within the meeting destination, for example, they may be more agreeable to a lower fee because they can get in and out in the same day.”

As for asking for a larger budget, he says that, too, is possible. “Very often I’m successful if the ask is related to an expense that will enhance the program. It just needs to be presented properly.”

At the end of the day, he’s clear on his best advice to new planners on one important way to cut costs. “Don’t be afraid to ask/negotiate. Hotels are generally eager to earn the business and don’t want to lose out to a competitor.”

Bottom line: There are many ways to cut costs if planners are willing to negotiate, be transparent and think creatively — but keeping the goals of each meeting in mind is the framework for every decision. I&FMM

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