Strategies for Successful Supplier PartnershipsAugust 30, 2018

Planners Appreciate Continuous Outstanding Service By
August 30, 2018

Strategies for Successful Supplier Partnerships

Planners Appreciate Continuous Outstanding Service

Credit: docstockmedia/www.Shutterstock.comThere are many instances of short-term partnerships with suppliers that qualify as a success. A firm running an incentive trip, for example, may partner with a DMC at the destination, receive great service and never work with that supplier again — only because the firm never happened to repeat that destination. But the most salient examples of successful relationships with suppliers are those where the client receives great service over many meetings, i.e., the long-term partnership. In that scenario, the supplier is demonstrating a deeper understanding of the client’s corporate culture, values and general demographics, which are the common denominator across all its programs. Conversely, the client is continually learning more about how the supplier works and is able to both refine the service through constructive feedback and achieve a higher level of confidence with each program.

Planners certainly appreciate the distinctive advantages of a longstanding supplier partnership. “It goes both ways; they get to know you, and you get to know them. You get to know their work ethic and establish a great rapport, a level of trust,” says Wayne M. Robinson, CMP, CMM, assistant vice president at FM Global and incoming chair of FICP. Robinson’s supplier partners range from hotel chains to hotel representation firms to DMCs, and some partnerships have been in place for more than 20 years.

Katrina Kent, director, The Event Group at TD Ameritrade, cites a 10-year partnership with an event logistics company and a five-year relationship with a production agency. These suppliers can “anticipate our needs, and that’s something that takes a while to learn,” says Kent. “It’s really about knowing the right questions to ask coming to a project; they’re able to prepare in a way that they wouldn’t be able to otherwise because there is a history and a common language. We don’t have to spend energy onboarding them every single time.”

Lisa Ramsay, CMP, assistant vice president, event and meeting management at Protective Life Insurance Co., cites an impressive 30-plus-year relationship with an incentive house out of Dallas, Texas. “Because we’ve been doing business with them for so long, they’ve formed long-lasting not only business relationships but also friendships with our producers,” Ramsay explains. “They know the special needs of one couple over a different couple. For example, we have one couple that’s somewhat elderly, and they know we have to put them in a special type of room. They know that the president and CEO’s wife has a severe gluten allergy. When you travel with a partner for 30 years, it just gives you an extra level of service.”

“They get to know you, and you get to know them. You get to know their work ethic and establish a great rapport, a level of trust.”
Wayne M. Robinson, CMP, CMM
Assistant Vice President at FM Global, Incoming Chair of FICP, Johnston, RI

With regard to long-standing hotel chain partnerships, the advantage is not only in terms of service, but also help in navigating the seller’s market. A close connection to a national sales rep can make that individual “your advocate, especially in markets where rates have risen and concessions are a lot harder to come by,” Robinson observes. “That being said, we are well aware that with changing markets, mergers and acquisitions, there are going to be changes in account management — but it provides an opportunity for growth on both the planner and account rep side.”

Ramsay, whose firm has worked extensively with the Four Seasons, Ritz-Carlton and Fairmont brands, can contact her national reps and say, “‘I’m booking something six months out or four months out. Can you help me get into a certain property?’ I think that’s where those long-standing relationships come into play,” she explains. Moreover, these reps stay in touch with the planner and regularly make them aware of new opportunities within their property portfolio that may be a fit with the client’s future programs. “Whether you’re on a webinar with them or an insurance [planners] forum, I think they very much keep you in the loop on what’s the latest and greatest out there for their group of hotels,” Ramsay says.

Whatever the nature of the supplier partner, a long-term relationship will typically have certain distinguishing features. One is robust communication. “We’re not always going to agree on everything, but we sit down and talk through every single aspect of an upcoming program,” Ramsay says. “We do it on the site inspection, we do it after we get back” from the meeting.

Another is honesty and straightforwardness, particularly when it comes to discussing things that didn’t go well. Similarity in the cultures of the respective companies also helps. For example, a client whose attendees are primarily millennials does well to partner with an event company that has at least some staff members who understand the kinds of activities and experiences that demographic typically looks for (perhaps because they are millennials themselves). “It’s nearly impossible to have a long-term vendor or supplier partnership without that personal piece. We have to have complementary cultures,” Kent affirms, “although that’s not saying that every partner that we work with is just like us.”

A fourth characteristic of long-term partnerships is an ongoing commitment to quality and improvement, that is, a lack of complacency. “We challenge our partners to continually reinvent themselves. Along with challenging ourselves, we challenge them, as well,” Kent says. “We want to make sure that our partners are pushing us forward. I think that the key is that neither party takes the relationship for granted, as it can all change on a dime.”

In Robinson’s considerable experience, suppliers are generally not taking long-time client relationships for granted and do seek to regularly deliver the best service they can. “Because of the level of competition right now, even established suppliers in our industry have pretty much revamped and upgraded their services and technology offerings,” he says. “For example, imagine the level of competition between Florida DMCs. There are more of them, and they have to really go outside of the box to find venues or services or activities that will make them stand apart. So I think that complacency has really gone out the window right now, because the competition is so stiff. If it hasn’t, it would be very difficult to compete.”

Indeed, Kent cites a case of a long-term partnership that did not evolve as her team expected. “The business was put out to bid, and the incumbent was superseded by a new partner. We had to make that change.”

Thanks to reliable vendor relationships, many firms are not often in the position of having to vet and hire new suppliers often, and may only do so because of internal requirements to send out RFIs and RFPs every three to five years. Insurance and financial firms are “risk averse by nature,” says Robinson, and that constrains their willingness to venture out and try new suppliers when there are already reliable options. In addition, “we’re in a better economy, and there’s a level of comfort in that my hand’s not pressed on the fire to look to save money and risk a long-term relationship. Instead, I go to my established vendor and ask for a better rate or better concessions, or ask them what opportunities do I have to save money or upgrade the experience so I can satisfy our internal organizations that are looking at the bottom line or want to offer something new and different” he adds.

However, Kent does find value in having “exploratory conversations” with vendors that appear promising. “We do many of those every year. It’s helpful, but it’s really important to set the expectation ahead of time with the supplier that this is just an exploratory conversation, potentially a building block of what could be a relationship, but not a guarantee by any means that there is any business up for bid,” she explains. “We look for suppliers that are willing to do that and want to showcase what they can bring, who want to share case studies and so on. That’s going to put them in my mind the next time that I have business that does open up, instead of a supplier who’s calling me every two months asking if anything is ready to RFP. There is this extended getting-to-know-you period where you can really assess capabilities and the fit, and it’s hard to do that when you have a supplier that’s pressing for business every time you talk to them.”

The transparency and honesty that characterizes a successful partnership begins at the familiarization stage, where the supplier must own up to any limitations of what they can deliver. Those qualities are also important at the RFP stage, particularly with regard to clarity on costs. “Whenever I’m asking for a proposal, if we don’t receive a line item budget when we get that proposal back from them — if I just have a per person price or an overall program price — that makes me wonder,” says Ramsay. “I want a line item budget so I can see every single thing they’re pricing out.”

Also lacking in transparency is the vendor who under-charges in order to get the business and then raises rates to market value later on in the relationship. “If you come in far lower than you can sustain, that’s not going to work,” says Kent. “I feel like many times suppliers undercut in order to get into the relationship, and then a year or two later, they want to substantially increase their pricing. That’s not an authentic transparent partnership.”

In the initial stages, then, a supplier must be patient with the familiarization process and fully transparent regarding their rate needs and structure. But these qualities are clearly insufficient to land the account if they lack the kind of experience the client desires. While an insurance or financial firm will clearly prefer or even require experience with corporate meetings, planners differ somewhat on whether the supplier must have worked with the insurance or financial segment in particular. That specific experience may not be needed if the supplier is a ground transportation company, for example, but it does come into play for DMCs and third-party event companies. For Ramsay, it’s helpful if that third party “knows many of the ins and outs and likes and dislikes with insurance or financial companies. My two colleagues and I are members of FICP, and we really try to source and buy from other FICP members, because anyone that’s in that organization is very familiar with how insurance and financial institutions work,” she explains.

While Kent agrees that experience with that segment is helpful, “it’s more important to see what the experience is that they’ve been delivering, not necessarily that it has been for a financial or insurance company,” she says. “So for us, it’s not a deal-breaker if someone doesn’t have a financial services client, as long as they’re really able to show that they deliver on the kind of program needs that we’re talking about.”

The references that a supplier provides should be to clients with similar program needs. As Robinson describes, a supplier may say, “‘Hey, I want you to call a random planner to talk about his or her association meeting.’ I’m not going to do it, because that’s a completely different type of meeting from an insurance or financial incentive or business meeting in most cases. I learned that the hard way, because I would take references and pick the phone up and call these people [who said the supplier] did a phenomenal job. But when I look behind the curtain in some cases, [that client] spent 40 percent of what we spend on a meeting, and it was a completely different level of expectation.”

A key ingredient in ensuring that suppliers continue to live up to expectations is the post-event review process. “We will sit down and do a recap of what we thought went well, what we can improve on, what we may want to change or tweak for the next time,” says Ramsay.

That includes sharing the results of agent surveys with the hotelier.
For long-term partners, Kent’s team also conducts annual and quarterly performance reviews, and the feedback goes both ways. “We welcome any suggestions or lessons learned on their side to help us on future programs. Many times some of the best ideas are coming from those suppliers in a post-con situation,” she says. The program-to-program improvements that result from post-event reviews are often fairly minor, and arguably, they should be minor. If there is too much room for improvement, the vendor may not have been the best choice initially. According to Robinson, a good planner’s vendor choices should be 90 percent on target, thanks to a careful vetting process that includes reliable references. “Do your homework!”

Assuming that the supplier continues to deliver meeting after meeting, eventually a rate increase will be justified. At that point, both parties must be reasonable in order to preserve the relationship. Kent has seen that her long-term suppliers are very conservative when it comes to increases, which typically occur approximately every three years. “They’re looking at the business from a holistic standpoint, not so much program to program,” she points out. It also helps when the vendor can provide an explanation for the increase, so that the planner can, in turn, explain the rise in cost to upper management.

As Ramsay relates, “I find that our hotel partners are very transparent with that; they’ll say food cost is up 5 percent [for example]. So that just helps us on our end when we’re doing our budgeting for an event and [explaining] that pricing to our bosses.” And if the vendor is not immediately forthcoming, a planner can certainly ask for justification, especially if the rate increase is more than expected. “If it’s five years [into the partnership], I don’t expect to get the same rates,” says Robinson. “But if I included them in an RFP two or three years ago, I don’t expect a 20 percent increase. If this is a trusted strategic partner, someone that I have developed a history with, I have a tendency to say, ‘Just be honest with me and tell me why the rates are 20 percent more,’ whether it be my floral or linens, my activities, rentals, etc. I do realize there are additional costs on the backend but don’t just drop it into the proposal without an explanation. Therein lies the value of the relationship.”

Getting the most out of a supplier partnership can go beyond receiving a great product or service at a fair rate. Added value can come from the vendor’s own relationships in the industry, whether that means a referral to another supplier (usually a non-competitor) or an idea from their work with another client. “Part of what’s really great about working with suppliers is that they can cross-pollinate ideas that work across their entire client portfolio to benefit each client,” says Kent. “We even have a production partner who helps us and another client leverage each other’s buy. The other client is in the home goods business, and they will work with us because our shows are relatively in the same time period. So if you’ve got another client that has a show within a certain number of weeks of ours and they’re using that type of curved LED screens, and you can get us both a deal, then why wouldn’t we consider that? It’s a great idea.”

Thus, planners do well to encourage their suppliers to leverage their industry connections. And if the project requires the supplier to partner with other vendors for the same client, it is best to clarify the nature of that collaboration at the outset. The logistics and creative/production agencies that work with Kent’s team also work with each other, and do so seamlessly. “We have two different logistics companies working on different pieces of a single project, and they were able to effectively partner together to meet what we needed to have done for the incentive program,” she relates. “So while they may be competitors, they really have to be open to fulfilling the client’s needs at the end of the day.” Along with communication, transparency, cultural compatibility and lack of complacency, “works well with others” must be added to the list of ideal supplier qualities in that scenario. I&FMM

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